Note: Option exercise transactions are only available to companies on the Growth and Scale plans.
To enable option exercises through the app, navigate to Equity > Equity Plans and select the plan you'd like to enable option exercises for. Select the Actions (...) button and click Configure options. In the pop up form, you can click to toggle allowing exercises on or off.
If you didn't configure the option exercise agreement when you set up your option grant template, you'll also need to update the grant template to include a configured exercise agreement here.
If in-app exercises are enabled, optionees will see an Exercise Options button in their dashboards. From there, they can navigate to the option grant they want to exercise and click 'Exercise Options'.
This takes them to the exercise page, where they can select how many options to exercise, confirm personal information, and see details about the exercise price and estimated tax withholdings.
Submitting an exercise request navigates the exercising grantee to a confirmation page:
From there, company admins receive the exercise request and review details such as tax withholding amounts, employee address, and ISO/NSO status. Company admins address any issues and approve (or reject) the request.
Once approved, the exercising optionee receives an email notification letting them know that their request was approved and that they can now pay for their exercise:
Payment information is made available in the app for the optionee. If the exercise payment is <$10k, the optionee can pay via Plaid ACH transfer:
Option holders: Please check with your company for company-specific requirements for exercising your grants.
For any technical assistance navigating the platform, please contact email@example.com.
Navigate to the option page for the exercised option from Securities > Options.
From the option page, navigate to the Transactions tab and select "Add existing exercise".
Complete the form with the relevant details. A draft share security will be created automatically upon completing the recording of the exercise.
Transactions (option exercises, share repurchases, share transfers, and conversions) appear in the Transactions tab:
You may also view the details of an exercise, create and store 83(b)s, and generate and share Forms 3921 from the exercise detail page:
You may also download various reports that contain exercise-related information from the Reports tab:
Company admins can either generate or upload and share a Form 3921 with option holders who have exercised their options during a tax year.
To generate Form 3921 and share it with option holders, navigate to the Transactions tab, visit the individual exercise's detail page, and scroll to the bottom of the page to find the Form 3921 section of the Exercise transaction page:
Sharing Form 3921 with option holder will make the form available on the option holder's stakeholder dashboard: Employee's dashboard with Form 3921:
Form 3921 can be submitted either electronically (due by April 1) or through mail (due by February 28). Three distinct copies of the form are necessary:
- Copy A should be submitted to the IRS, either online or via mail.
- Copy B must be provided to the employee who exercised stock options by January 31.
- Copy C should be retained for your company's records.
From the year 2024 onwards, if you need to submit 10 or more Form 3921s or other similar returns, you are required to file them electronically by April 1, for the tax year. To prepare for filing, you should gather:
- A roster of employees who exercised incentive stock options in the last year.
- Their tax ID numbers, complete names, and addresses.
- Your company’s transmitter control code (TCC).
- For online filing, access to the IRS’ FIRE (Filing Information Returns Electronically) system is needed.
For Online Filing: If this is your first time filing online, you must file Form 4419 electronically to obtain a TCC from the IRS, which is necessary to create a FIRE account. This process could take several weeks, so it's advisable to begin at least a month before the deadline (by March 1, 2024).
For Filing by Mail: If filing by mail, remember that forms printed at home are not acceptable. The IRS uses specialized machines that only read forms printed on IRS-provided paper. This paper can be ordered from the IRS website.