Current and former employees can exercise their stock options electronically through Pulley. The platform supports ACH payments via Stripe and Plaid for seamless transactions, and you'll have full visibility into costs and documentation before submitting your request.
Former employees must be within their post-termination exercise timeframes to access the exercise function. If you don't see the "Exercise Options" button on your account, contact your company admin to confirm the feature is enabled.
Before You Begin
Check your eligibility:
Your options must be vested (or eligible for early exercise)
You must be within any applicable exercise windows
Former employees must be within post-termination exercise periods
Understand the commitment: Exercising options means purchasing shares of company stock at your strike price. You'll pay real money for these shares, so make sure you understand the costs and tax implications before proceeding.
Submitting Your Exercise Request
Exercise requests require review and approval from your company's admin before they're finalized. Once approved, you'll receive instructions for completing payment and accessing your share certificates.
Step 1: Navigate to your option grant
Log into Pulley and select your company's portfolio. From your holdings, click on the option grant you want to exercise. This opens the grant detail view where you can see your vested options, strike price, and other grant information.
Step 2: Start the exercise request
Click Exercise Options in the top right corner of the grant detail page. This launches the exercise request workflow.
Step 3: Review the exercise overview
Pulley provides a breakdown of the exercise process, including what happens at each stage:
You submit your request with payment details
Your company admin reviews and approves
Payment processes (either through Pulley or offline)
Share certificates are generated
You receive documentation and confirmation
This overview helps you understand what to expect throughout the exercise. Press Get Started to proceed to the options exercise.
Step 4: Choose how many options to exercise
Now you'll specify the quantity of options you want to exercise. Depending on your grant structure, you may see one or two quantity fields.
If your grant includes both ISOs and NSOs:
Some option grants are split between Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NSOs) due to IRS regulations. The IRS limits ISOs to $100,000 worth of stock vesting per calendar year (based on fair market value at grant date). When your vesting schedule exceeds this limit, the excess automatically becomes NSOs.
When this applies to your grant, you'll see separate input fields:
ISO quantity: The number of ISOs you want to exercise
NSO quantity: The number of NSOs you want to exercise
You can exercise any combination you choose: some of each, all of one type, or the full available amount of both.
Understanding the cost difference:
The two option types have different tax treatment when you exercise:
ISOs: When exercising with cash, ISOs typically don't trigger immediate income tax withholding. However, they may have Alternative Minimum Tax implications depending on your situation. The cost you see for ISOs is primarily the strike price multiplied by the number of shares.
NSOs: NSOs are taxed as ordinary income on the spread between the fair market value at the time of exercise and the strike price. You'll see an estimated tax withholding amount included in the NSO exercise cost. This withholding is an estimate based on federal tax rates and may not cover your full tax liability (it doesn't include state taxes, Medicare, or Social Security).
The exercise form displays a cost breakdown for each type, so you understand exactly what you're paying before you commit.
If you only see one quantity field:
Your grant may not exceed the $100,000 limit, or it might be structured entirely as one type. Simply enter the total number of options you want to exercise. The process works the same way, you'll just see a single cost calculation instead of separate ISO and NSO amounts.
Adjusting your quantities:
As you enter quantities, the form recalculates costs in real-time. You can adjust the numbers to see how different exercise amounts affect your total cost. This helps you make an informed decision about how many options to exercise based on your budget and tax considerations.
Step 5: Enter required information
Complete the required fields in the exercise form. These typically include your contact information, tax details, and confirmation that you understand the terms of the exercise.
Tax withholding information:
Estimated tax withholding will automatically be entered for your exercise. This amount will be included in your total exercise cost.
If you're unsure about the entered amount, consult with a tax advisor or contact your company admin for guidance. The appropriate withholding depends on your individual tax situation and the type of options you're exercising.
Step 6: Review transaction and payment details
Before finalizing your request, review the complete cost breakdown. The summary shows:
For single-type grants:
Total exercise cost (strike price × quantity)
Any applicable tax withholding
Final amount due
For grants with ISO/NSO splits:
ISO exercise cost (strike price × ISO quantity)
NSO exercise cost (strike price × NSO quantity + estimated withholding)
Total amount you'll pay
Payment method selection:
Choose how you'll pay for the exercise:
ACH Payment (if available): If your company has connected their bank account through Pulley, you can pay directly via ACH using Stripe. This option processes automatically after admin approval, making the transaction seamless.
Manual Payment: If ACH isn't available, you'll select manual payment. Your company will communicate payment details directly to you (wire transfer instructions, check procedures, etc.). You'll complete payment outside Pulley, and your admin will mark the exercise as paid once they receive your funds.
Note that manual payment is required for international stakeholders, as integrated ACH payment currently supports US bank accounts only.
Step 7: Review exercise agreements
Before submitting your request, you can preview the exercise agreement(s) that will govern your share purchase. Take time to read through these documents carefully, they outline the terms and conditions of your exercise.
For ISO/NSO split exercises: You'll see two separate exercise agreements, one for the ISO portion and one for the NSO portion. Having separate agreements ensures proper documentation for tax purposes, as ISOs and NSOs are treated differently by the IRS.
If no agreements appear: Your company may handle exercise agreements offline or may not have uploaded templates to Pulley yet. If you don't see agreements in this preview, your company will provide them separately.
Signatures
Before submitting, you will need to electronically sign for the exercise. It is also required to designate your marriage status and have your spouse electronically sign, if applicable. If designating a spouse, you will need to add your spouse's email address for facilitating their requirements.
Once you have signed in the signature field, ensure that you review and agree to the Pulley Terms of Services and the "I agree to electronically sign to accept this grant" checkboxes. Consent and check both boxes before submitting your request.
Step 8: Submit your request
When you're satisfied with all the details (quantities, costs, payment method, and agreements) click Submit Exercise Request to send your exercise request for admin review.
The request moves to your company admin's queue, and you'll receive a confirmation that your submission was approved.
From the confirmation screen you can:
Review your exercise request details
Press Cancel Exercise Request button to cancel your request
Access your Signed Agreements for the exercise.
Download your Notice of Exercise
For your records, be sure to download the generated Notice of Exercise for your request. This can be found in the Signed Agreements section.
Step 9: Wait for admin approval
Your company administrator reviews your exercise request to verify all details before approving. They check:
The quantities you're exercising are available
Payment method and amounts are correct
Tax withholding (for NSOs) is appropriate for your situation
All required documentation is in order
During this review period, your admin may adjust the tax withholding rate if they determine the default estimate doesn't match your circumstances. If they make changes, you'll be notified and asked to re-confirm the updated total cost.
Step 10: Complete payment and receive confirmation
Once your admin approves the request:
If you selected ACH payment: The funds will process automatically through Stripe/Plaid from your linked bank account to your company's account. You'll receive confirmation when the payment clears, usually within 3-5 business days.
If you selected manual payment: Your company provides payment instructions directly to you. Complete the payment according to their guidance (wire transfer, check, etc.), and notify your admin when done. They'll mark the exercise as paid in Pulley once they receive your funds.
After payment clears:
Pulley generates your share certificates. For ISO/NSO split exercises, you'll receive two separate certificates, one for the ISO shares and one for the NSO shares. Both certificates appear in your Documents section and are available for download.
Your portfolio updates to reflect:
Reduced option holdings (by the amount exercised)
Increased common stock holdings (the shares you now own)
Complete exercise history and documentation
Step 11: File 83(b) election (if applicable)
For early exercises of unvested options, you may choose to file an 83(b) election with the IRS. This election can have significant tax benefits but must be filed within 30 days of exercise.
To file your 83(b):
Click on your Tasks icon in the top right of Pulley
Select Upload Form if prompted
Complete your 83(b) election form
Pulley generates the form with your exercise details pre-filled
Follow the instructions for mailing to the IRS
Not sure if you need to file an 83(b)? Consult with your tax advisor. The requirement depends on the type of exercise and your individual tax situation.
Common Questions
Q: Why does my grant have both ISOs and NSOs?
Q: Why does my grant have both ISOs and NSOs?
A: The IRS limits ISOs to $100,000 worth per year based on the fair market value at grant date and your vesting schedule. When your vesting exceeds this limit in any calendar year, the excess automatically becomes NSOs. This split is calculated at grant time and displayed in your grant details.
Q: Can I exercise only ISOs or only NSOs, not both?
Q: Can I exercise only ISOs or only NSOs, not both?
A: Yes. When submitting your exercise request, you have complete flexibility to choose quantities. You can exercise only ISOs (leave NSO quantity at zero), only NSOs (leave ISO quantity at zero), or any combination of both. The choice is yours based on your financial situation and tax strategy.
Q: Why did I receive two separate exercise agreements?
Q: Why did I receive two separate exercise agreements?
A: When you exercise both ISOs and NSOs in a single request, federal tax regulations require separate documentation for each type. This ensures proper reporting to the IRS and clear records of how your exercise was structured. Both agreements will appear in your Documents section after your admin approves the exercise.
Q: What if I don't see the "Exercise Options" button?
Q: What if I don't see the "Exercise Options" button?
A: Your company may not have enabled electronic exercise requests through Pulley yet. Contact your company admin (listed at the bottom of your portal) to ask about exercise procedures. They may handle exercises offline or can enable the feature if it's available on their Pulley plan.
Q: Can I cancel my exercise request after submitting?
Q: Can I cancel my exercise request after submitting?
A: Before your admin approves the request, you may cancel the request directly in Pulley. Contact your admin immediately if you need to cancel an approved request. Once payment has processed, the exercise cannot be reversed, you've now purchased the shares and own them.
Q: What happens to my options after I exercise?
Q: What happens to my options after I exercise?
A: The options you exercise are converted to common stock shares. Your option holdings decrease by the exercised amount, and your common stock holdings increase by the same amount. You now own actual shares of company stock rather than the right to purchase them.
Q: Do I still have options left after exercising?
Q: Do I still have options left after exercising?
A: If you exercised only a portion of your available options, yes, the remaining options stay on your grant and continue vesting according to the original schedule. If you exercised your entire available balance, you have no remaining options from that grant (though you may have other grants).
Q: Why is the tax withholding estimate different from what I expected?
Q: Why is the tax withholding estimate different from what I expected?
A: The estimate is based on federal income tax rates only. It doesn't include state taxes, Medicare, Social Security, or adjustments for your specific income bracket. Your actual tax liability may be higher or lower than the estimate. Your admin can adjust the withholding rate if needed, but you should consult a tax advisor to understand your full tax obligation.
Q: Where can I find my exercise agreements after the exercise is complete?
Q: Where can I find my exercise agreements after the exercise is complete?
A: If you did not download the agreements during the submission process, please reach out to your Pulely Administrator for a copy of the desired documents.