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Option grant template

The short answer

A stock option grant notice and agreement: the terms a grant has to state, the vesting schedule, the exercise mechanics and signature blocks for the company and the optionee.
  • Grant notice and agreement in one document
  • ISO and NSO both handled
  • The post-termination window stated, not assumed
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See it before you download it

Preview of the option grant template, marked SAMPLE
Both pages of the option grant notice and agreement. The download has no watermark.

What you get

PDF: grant notice and agreement, every field blank
  • Guidancethe three things that make a grant real
  • Grant noticeoptionee, shares, price, type, dates and vesting
  • Agreementexercise, termination, transfer restrictions and tax notices
  • Signature blocks for the company and the optionee

Get the grant template

The template arrives by email, and you can download it here now.

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Before you send it

Board approval first

The grant date is the approval date. Sending an agreement before the board has approved it creates a document the company cannot honour as written.

Price at or above the 409A

An exercise price below fair market value can put the option under Section 409A: tax as it vests, plus a 20% federal penalty on the holder.

ISO limits apply automatically

Only $100,000 of ISOs may first become exercisable in a calendar year, measured at grant-date value. The excess is an NSO whatever the document says.

Say the exercise window

90 days is the common default and the reason most leavers never exercise. Whatever you choose, put it in the plan and say it out loud at the offer.

Questions

Is an offer letter enough to grant equity?+

No. An offer letter is a promise. A grant needs board approval, an exercise price at or above fair market value, and a signed agreement.

Can I use this for advisors?+

Yes, but advisors and contractors cannot receive ISOs. Mark the grant as an NSO; ISOs are only for employees.

What vesting should I use?+

Four years with a one-year cliff and monthly vesting after it is the usual startup schedule. The template leaves it blank so you can state whatever the board approved.

Is this legal advice?+

No. It is a starting document modeled on standard forms. Have your counsel approve the version you use.

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