Scheme & Grant Status Lifecycle

This document explains all the statuses used in Capsense to track your ESOP scheme and individual grants. Understanding these statuses helps you know what actions are available and what to communicate to your team.

Scheme Statuses

Capsense uses four statuses to describe where your ESOP sits in its journey:

Need the full story? The step-by-step playbook for each stage lives in docs/guides/esop-lifecycle-guide.md. Use it to plan your rollout and ongoing operations.

Exit Events

Exit events (like acquisitions or secondary sales) are tracked via the exitEventAt field. When you set an exit date, Capsense applies acceleration rules based on the accelerateOnExit flag (and optionally accelerateTerminatedGoodLeavers for terminated grants—remember this still requires the restore (and, for exit-only schemes, reopen) policies to release the balance). The system limits actions to exit-related tasks until the event is cleared.

Grant Statuses

Individual option grants move through seven possible statuses during their lifecycle:

PENDING_BOARD_APPROVAL

What it means:

• Grant has been created by company admin
• All grants require board approval - this is a universal requirement for governance and compliance
• Awaiting board resolution signatures from all active board members
• Resolution content varies based on valuation methodology (standard or with valuation override explanation)

What happens:

• Board members receive notification to review and sign the approval resolution
• Employee does not receive any communication during this phase
• Typically takes 1-3 days depending on board availability

Admin actions available:

• Edit grant details (before board signs)
• Cancel/delete grant
• View board approval progress

Employee visibility: None (employee cannot see the grant yet)

AWAITING_ACCEPTANCE_SIGNATURE

What it means:

• All board members have approved the grant
• System is preparing personalized offer letter
• Automated document generation in progress

What happens:

• Offer letter is automatically generated with grant details
• System transitions grant to OFFERED status
• This phase is very brief (typically minutes)

Admin actions available:

• Monitor document generation
• Cannot edit grant details (board already approved)

Employee visibility: None (employee doesn't see grant until OFFERED status)

OFFERED

What it means:

• Offer letter has been sent to employee's email
• Employee has received grant invitation
• Grant is awaiting employee acceptance signature
• Employee has limited time to accept (default: 30 days, configurable via INVITE_DEFAULT_DAYS or company-level inviteDefaultDays)

What happens:

• Employee receives email with secure link to view and sign offer letter
• Employee reviews grant details (number of options, exercise price, vesting schedule, etc.)
• Employee must sign acceptance before expiry date
• If employee doesn't accept before expiry, grant transitions to EXPIRED status

Admin actions available:

• View offer status
• Resend offer email
• Cancel grant (before employee accepts)
• Monitor time remaining before expiry

Employee visibility: Full grant details visible, "Accept Offer" action available

Typical expiry: 30 days from offer date (check spam folder if not received!)

ACTIVE

What it means:

• Employee has accepted the offer - grant is now active!
• Options are vesting according to the schedule
• Employee can track vesting progress and estimated value
• Grant is subject to termination/exercise based on employment status

What happens:

• Options vest over time (monthly, quarterly, or annually)
• Employee receives vesting notifications (cliff vesting, annual vesting, etc.)
• Vested options become available for exercise (depending on scheme type):
  • RESTRICTED (exit-only): Can only exercise at company exit
  • UNRESTRICTED (anytime exercise): Can exercise anytime after vesting
• Admin can track vesting progress and process exercises

Admin actions available:

• View vesting schedule and progress
• Process exercise requests (for RESTRICTED schemes at exit)
• Terminate grant (if employment ends)
• View grant details and history

Employee visibility: Full grant details, vesting progress, estimated value, exercise actions (if applicable)

TERMINATED

What it means:

• Employment has ended
• Post-termination exercise window is active
• Termination type determines what happens to vested/unvested options:
  • GOOD_LEAVER: Retains vested options, can exercise within window (default: 90 days)
  • BAD_LEAVER: Forfeits all options (vested and unvested)
  • FOR_CAUSE: Forfeits all options immediately

What happens:

• Good Leaver:

  • Vested options remain exercisable for post-termination window (typically 90 days)
  • Unvested options are forfeited
  • Employee receives notification with exercise deadline
  • After window expires, unexercised options transition to EXPIRED status

• Bad Leaver / For Cause:

  • All options (vested and unvested) are forfeited immediately
  • No exercise window is provided
  • Grant transitions to EXPIRED status

Admin actions available:

• Set termination type (GOOD_LEAVER, BAD_LEAVER, FOR_CAUSE)
• Set termination date and post-termination exercise window
• Process exercises during window
• Restore terminated grants (if needed - e.g., employee rehired)

Employee visibility:

• Good leaver: Vested options visible, exercise actions available during window
• Bad leaver/For cause: Notification that grant has been forfeited

Exit event behavior:

• At exit, terminated good leaver grants can be accelerated if accelerateTerminatedGoodLeavers is enabled
• Still requires restore policy (and, for exit-only schemes, reopen policy) to release the balance

EXPIRED

What it means:

• Grant has passed its expiry date without being exercised or accepted
• Two scenarios:
  1. Offer expired: Employee didn't accept offer within the invitation period (typically 30 days)
  2. Post-termination expiry: Good leaver didn't exercise within post-termination window

What happens:

• All options (vested and unvested) are forfeited
• No further actions possible on the grant
• Options return to the pool (if pool tracking is enabled)
• Grant is archived for compliance records

Admin actions available:

• View grant history
• Cannot reactivate (must create new grant if needed)

Employee visibility:

• If offer expired: Employee may not have seen the grant
• If post-termination expired: Employee sees that exercise window has closed

FULLY_EXERCISED

What it means:

• All vested options have been successfully exercised into shares
• Grant has completed its lifecycle successfully
• Employee now owns shares in the company

What happens:

• All options converted to shares
• Exercise records created for compliance (Section 8C reporting)
• Tax withholding processed (if applicable)
• Shares issued to employee
• Grant archived for compliance records

Admin actions available:

• View exercise history
• View share issuance records
• Generate compliance reports

Employee visibility:

• Grant marked as fully exercised
• Can view exercise history and share ownership
• Can download exercise confirmations

Grant Lifecycle Flow

Here's the typical flow for a successful grant:

1. PENDING_BOARD_APPROVAL
   ↓ (Board signs resolution)

2. AWAITING_ACCEPTANCE_SIGNATURE
   ↓ (System generates offer letter - automatic)

3. OFFERED
   ↓ (Employee signs acceptance within 30 days)

4. ACTIVE
   ↓ (Options vest over time)
   ├─→ (Employment continues, options exercised) → FULLY_EXERCISED
   ├─→ (Employment ends) → TERMINATED
   └─→ (Offer not accepted in time) → EXPIRED

5a. TERMINATED (Good Leaver)
    ↓ (Exercise within post-termination window)
    → FULLY_EXERCISED or EXPIRED (if window lapses)

5b. TERMINATED (Bad Leaver / For Cause)
    → EXPIRED (immediate forfeiture)

Grant Status Summary Table

Related Documentation

• Detailed lifecycle guide: See esop-lifecycle-guide.md for step-by-step playbook
• Termination policies: See esop-policies.md for leaver classification and post-termination rules
• Member perspective: See member-guide.md for employee-facing explanations
• Glossary: See glossary.md for quick reference definitions