Employee Stock Option Plan

Employee Stock Option Plan

Many companies use employee stock options plans to compensate, retain, and attract employees. These plans are contracts between a company and its employees that give employees the right to buy a specific number of the company's shares at a fixed price within a certain period of time. The fixed price is often called the grant or exercise price. Employees who are granted stock options hope to profit by exercising their options to buy shares at the exercise price when the shares are trading at a price that is higher than the exercise price. Your options will have a vesting date and an expiration date. You cannot exercise your options before the vesting date or after the expiration date. Your options are considered to be in the money when the current market price of the stock is greater than the grant price.