Option grant notice templates by jurisdiction

About this template

An option grant notice is the document that formally grants stock options to a recipient (typically an employee, but also contractors, advisors, and directors). It accompanies the equity incentive plan (which sets the framework for options) and the option agreement (which sets the specific terms of this grant). The grant notice identifies the recipient, the number of options, the strike price, the vesting schedule, and the grant date. Each grant is authorized by a board resolution and tracked against the option pool.

When you need it

• When hiring a new employee or contractor with an equity component
• When promoting an existing employee with a supplemental grant
• When granting equity to a new advisor or board member
• When refreshing a long-tenured employee's equity
• When ratifying historical grants that lacked contemporaneous documentation

What it should cover

• Recipient identification (name, address, employee/contractor status)
• Number of options granted
• Strike price (typically equal to the most recent 409A fair market value)
• Vesting schedule (typically four years with a one-year cliff, monthly thereafter)
• Grant date (the date the board authorized the grant)
• Option type: incentive stock option (ISO) or non-qualified stock option (NSO)
• Expiration date (typically 10 years from grant, shorter for terminated employees)
• Exercise procedures and any restrictions on transfer
• Reference to the equity incentive plan and option agreement that govern