Net exercise provides a convenient method for employees to exercise their stock options without needing to pay the entire exercise price or tax immediately. In this approach, either a portion of the shares is sold, or the company withholds some shares to cover the exercise price and taxes. This option is particularly beneficial for employees who wish to exercise their options but lack the necessary funds.
To make this option available to your employees, follow these steps: Go to Settings > Configurations > Exercise Configuration, and then access the Payment Configuration tab.
Activate the Net Exercise Configuration setting. Additionally, decide if you wish the quantity of shares withheld to be reincorporated into the available pool.
When Net Exercise is activated, employees can choose between using "Own Funds" or "Net Exercise" when they exercise their options.
Employee Process:
- Initiate the process by clicking the 'exercise options' button and providing the required information.
- Choose between “Own Funds” or “Net Exercise” to proceed with exercising the options.
- Review the calculations for the Quantity Withheld and the number of Shares to be issued.
- Finalize by clicking 'next' and submitting your exercise request.
Admin Procedure:
- An employee initiates an exercise request and selects “Net Exercise” as the payment mode.
- As an admin, review all the provided details and approve the request by clicking the approval button.
- Verify the calculations for “Quantity Withheld” and “Shares to be Issued.” Based on these, approve or disapprove the exercise request.
- Following approval or disapproval, the total quantity available in the pool will adjust according to the “Net Withheld” configuration.
For any further clarifications contact us at: support@qapita.com