You can process exercise transactions for specific grantholders in Carta.
Equity Awards (Options and Warrants) can be exercised in three ways:
- Register offline exercise - you can use this feature when the signing process has taken place or will be signed outside Carta
- Create exercise window - you can use this feature to allow your stakeholder to exercise any vested options up to date (please note, this will not cancel the unvested options)
- Terminate Grant (Exercise) - you can use this feature to create an exercise window and terminate a grant once the exercise window is completed
For the purposes of this guide, we will use option grants as an example but the process is the same for warrants.
Register Offline Exercise
1. Go to Equity Awards > Options > Grants.
2. Locate the grant that needs to be exercised and click the Actions Button on the right-hand side of the grant.
3. Click Register offline exercise.
4. Add the Exercise date and select one of the three options for the exercise:
- Convert vested options - cancels only the vested portion.
- Convert all outstanding options including any options yet to vest - cancels the entire grant.
- Specify a number of options to exercise - this option allows you to input the number of options to be cancelled
5. If applicable, add a funding round in the Advanced section or add documents in the Documents section.
6. Click Save draft or Publish exercise and notify.
Create Exercise Window
Before creating an exercise window you will need to:
- Add the relevant exercise notice template on Carta.
- Select the default signatory (the person who will publish the exercises on behalf of the company)
1. Go to Equity Awards > Options > Grants.
2. Locate the grant that needs to be exercised and click the Actions button on the right-hand side of the grant.
3. Click Open exercise window.
4. Add exercise window Start and End Dates and select the relevant Document set, if applicable.
5. Add Payment instructions.
6. Click Open exercise window.
Terminate Grant (Exercise)
Before terminating a grant you will need to:
- Add the relevant exercise notice template on Carta.
- Select the default signatory (the person who will publish the exercises on behalf of the company)
1. Go to Equity Awards > Options > Grants.
2. Locate the grant that needs to be exercised and click the Actions Button on the right-hand side of the grant.
3. Click Terminate grant (Exercise).
4. Complete the required fields:
- Exercise window start / end date- select the dates for the exercise window
- Securities on termination date- select if you want to cancel only the unvested options (Cancel all unvested) or cancel all unvested options plus vested options (Cancel unvested and more)
- Document set- if there are multiple exercise document sets under the same option plan, you can select the relevant one.
- Cancel all vested grants once the grant termination is completed- If this box is ticked, the grantholder will lose all their vested grant securities that they did not exercise after the termination is completed. If this box is blank, the grantholder will retain vested grant securities that they did not exercise after the termination.
5. Add Payment instructions.
6. Click Start grant termination.
7. Once the grantholder requested their exercise and signed the documentation, mark the transaction as Paid. Go to Equity Awards > Options > Online exercises > click the Action button > select Mark as paid.
Publishing an exercise
Online exercises and terminations need to be published for the transaction to be completed.
1. Go to Equity Awards > Options > Online exercises.
2. Locate the exercise that needs to be published and click the Actions Button on the right-hand side of the grant.
3. Click Publish.
4. Review the exercise details and click Publish.