Can an option agreement be signed electronically?

Yes. Under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, electronic signatures satisfy signature requirements for most commercial agreements; confirm exceptions that bar e-signatures for a given matter.

When is notarization required?

Not commonly required for option grants; notarization or RON may be used for added authentication or for related corporate filings. Check state notary rules and your company’s charter or plan requirements.

How do I correct a signed agreement?

Execute a written amendment signed by all parties or a mutual rescission and re-issue. Record approvals and updated signatures to preserve a clear audit trail.

What authentication should I use?

Use email with optional SMS code or stronger methods for high-value grants; retain signer metadata and an audit trail to support attribution.

Is board approval necessary?

Yes. Documented board or committee approval is standard; include the approval reference in the grant notice and retain a copy with corporate minutes.

Which retention rules apply?

Retain executed grants per tax and corporate record rules: generally a minimum of 3 years for IRS purposes and longer where state, SEC, or industry rules require it.

Electronic Signature
Templates
HR
Employee Option Grant Agreement

Employee Option Grant Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

EMPLOYEE OPTION GRANT AGREEMENT

This Employee Option Grant Agreement (the Agreement) is made effective as of (the Effective Date), by and between Company Name: , a corporation organized under the laws of (the Company), and Grantee Name: (the Grantee).

RECITALS

WHEREAS, the Company has adopted an equity incentive plan (the Plan) under which the Company may grant stock options and other equity awards; and

WHEREAS, the Company desires to grant to the Grantee, and the Grantee desires to accept, the option described below on the terms and conditions set forth in this Agreement and the Plan, which by this reference is incorporated herein and made a part hereof.

GRANT SUMMARY

Number of Shares Subject to Option Exercise Price per Share

Option Type: Incentive Stock Option (ISO) Nonstatutory Stock Option (NSO)

Vesting Commencement Date

VESTING SCHEDULE

Vesting shall occur in accordance with the following schedule unless otherwise provided in the Plan or this Agreement. The number of Options that become exercisable shall be determined by multiplying the total number of Options by the applicable vesting percentage.

Cliff Vesting Standard Schedule After Cliff Acceleration Provisions (if any)

EXERCISE AND TERMINATION

Exercise Period After Termination: Unless otherwise provided in the Plan, the Grantee shall have days following termination of employment to exercise any vested Options; provided that a termination on account of death, disability or other specified reasons shall be governed by the Plan.

Method of Exercise Transferability and Restrictions

TAX WITHHOLDING AND REPORTING

The Grantee acknowledges that the Company may require payment or withholding of any applicable taxes in connection with the grant, vesting, exercise or disposition of the Options. The Grantee authorizes the Company to withhold amounts from salary or other payments, or to require a cash payment, to satisfy federal, state or local tax withholding obligations.

Tax Withholding Instructions or Agreements (if any)

REPRESENTATIONS, COVENANTS AND AGREEMENTS

The Grantee represents that the Grantee is acquiring the Options for investment for the Grantee's own account and not with a view to distribution. The Grantee covenants to comply with all applicable securities laws and the terms of the Plan and this Agreement. The Company represents that the grant of the Options is authorized under the Plan and corporate authority.

Additional Representations or Conditions

NOTICE AND DELIVERY

Company Notice Address Grantee Notice Address

MISCELLANEOUS

Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to conflicts of law principles.

Entire Agreement: This Agreement and the Plan constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, written or oral, relating thereto.

Amendments

PERSONAL INFORMATION & HR SECTIONS

Full Legal Name Home Address

Phone:

Email:

POSITION INFORMATION

Job Title Department Reporting Manager

Start Date: Salary/Annual Rate:

EMPLOYMENT HISTORY

Most Recent Employer Prior Employer

EDUCATION

Highest Degree

REFERENCES

Reference 1 Reference 2 Reference 3

LEGAL DISCLOSURES

At-Will Employment: The Grantee acknowledges that the option grant does not alter the at-will nature of employment, and either the Grantee or the Company may terminate employment at any time, subject to the terms of this Agreement and the Plan.

Equal Opportunity: The Company is an equal opportunity employer and does not discriminate on any protected basis. The Grantee acknowledges that the grant was made without regard to such protected characteristics.

Applicant Certification and Authorization

By checking the box below the Grantee authorizes the Company to contact prior employers and references and to conduct background and identity checks necessary to confirm eligibility for equity awards and tax reporting.

I authorize the Company to contact prior employers and references and to conduct background checks.

ACKNOWLEDGMENT

The Grantee acknowledges receipt of a copy of the Plan and this Agreement, understands the terms and restrictions contained herein (including restrictions on transferability of the Options), and accepts the grant subject to the terms of the Plan and this Agreement. The Grantee further acknowledges that tax consequences may arise from the grant, vesting or exercise of Options and that the Grantee has had the opportunity to consult legal and tax advisors.

Grantee Additional Acknowledgements (if any)

Company (Issuer) — Printed Name:

By (Authorized Signature):

Date:

Title:

Grantee — Printed Name:

By (Signature):

Date:

Employee ID (if applicable):

What the Employee Option Grant Agreement Is

An Employee Option Grant Agreement documents the company’s grant of stock options to an employee or consultant, describing quantity, exercise price, vesting schedule, term, transfer restrictions, and related rights and obligations. It establishes the legal mechanics for how the option can be exercised, conditions for vesting and forfeiture, any performance or service milestones, and what happens on termination or change of control. The agreement is usually accompanied by a stock plan, board resolution, and grant notice and should be retained with corporate records for tax and compliance purposes.

Why a Clear Agreement Matters

A precise Employee Option Grant Agreement reduces ambiguity about ownership, tax treatment, and exercise mechanics, protects both the company and grantee, and supports consistent administration across hires and terminations while aiding audit readiness and regulatory compliance.

Who Typically Prepares or Signs This Agreement

Depending on company size, a company secretary or corporate administrator often records grant approvals in corporate minutes and retains final executed agreements.

Human resources and compensation teams — prepare grant paperwork, coordinate approvals, and manage onboarding communications with concise vesting and exercise details.
Corporate counsel or outside securities counsel — review terms for securities compliance, Board resolutions, and plan consistency before grant execution.
Founders, executives, and employees — sign as the company counterparty and the grantee; founders may also confirm board approvals where required.

Primary Roles Involved

HR Manager

HR or compensation specialists administer grants, provide offer documentation to employees, track vesting schedules, and coordinate with payroll for withholding and tax reporting; they also house the executed agreements in centralized personnel records.

Corporate Counsel

In-house or external counsel confirms securities compliance, drafts or reviews grant language and plan exhibits, prepares board resolutions and grant notices, and advises on tax classification and change-of-control provisions.

Key Security and Compliance Facts

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest

Audit Trail: Timestamped action logs and signer metadata

HIPAA Support: BAA available where applicable

Regulatory Standards: ESIGN and UETA recognition

Certifications: SOC 2 Type II and ISO 27001

Accessibility: WCAG 2.0 Level AA compliance

Primary Risks and Consequences

Tax Misclassification: Incorrect ISO/NSO treatment can trigger unexpected tax liabilities

409A Exposure: Noncompliant deferred compensation may incur penalties and interest

Missing Board Approval: Unauthorised grants may be voidable or unenforceable

Failure to Withhold: Improper payroll withholding can create employer liabilities

Invalid Signatures: Improper execution can jeopardize enforceability

Expired Exercise: Lapsed exercise windows may forfeit employee rights

Step-by-Step: Completing an Employee Option Grant Agreement

Follow these sequential steps to prepare, approve, sign, and record a standard Employee Option Grant Agreement.

01

Prepare Grant: Define option count, price, and vesting.
02

Obtain Approvals: Record board or committee authorization.
03

Add Signatories: List company officer and grantee signatures.
04

Execute and Store: Collect signatures and save final copies.

How to Configure an Electronic Grant Workflow

Typical electronic workflows reduce errors and centralize approvals; configure fields and authentications before sending.

Field	Configuration
Grant Date Field	Set MM/DD/YYYY format, prefill from board resolution
Vesting Schedule Field	Use repeating rows or table for cliff and periodic vesting
Signature Blocks	Require signer name, signature, and date fields
Authentication	Enable email plus optional SMS code or KBA

Technical Considerations for eSigning and Integration

Confirm chosen integrations and authentication meet your internal controls and any industry-specific regulatory requirements before executing grants.

File Formats: PDF and DOCX supported
Integrations: Salesforce, NetSuite, Google Workspace
Advanced Fields: Conditional and formula fields

Typical Electronic Signing Flow for an Option Grant

A standard online signing workflow captures intent, attribution, and a reproducible record while streamlining approvals.

Upload Document: Add the finalized agreement PDF to the platform
Place Fields: Insert name, signature, date, and vesting fields
Add Signers: Assign roles and authentication methods
Execute: Signers complete signatures and receive signed copies

Important Timing and Reporting Items

Track grant dates, board approvals, vesting commencement, exercise windows, and required tax reporting to remain compliant and preserve tax benefits.

Grant Date:

Record on approval; determines vesting and tax start

Board Approval Window:

Approve before issuance to ensure authorization

Vesting Commencement:

Specify when service period begins

Exercise Period:

Note post-termination exercise windows (e.g., 90 days)

Tax Reporting:

Provide required IRS reporting and employee statements

Common Preparation Pitfalls

Using ambiguous vesting language that creates differing interpretations among grantees or administrators.
Failing to document board or committee approval before delivering option grant notices to employees.
Omitting transfer restrictions or lock-up provisions that are required under the company’s equity plan.
Not aligning the exercise price calculation with the plan and proper fair market value determinations.

Essential Components to Include in the Agreement

A professionally drafted Employee Option Grant Agreement should clearly set out grant mechanics, vesting, exercise terms, restrictions, tax treatment, and dispute resolution provisions.

Grant Clause

Specify the number of options, class of stock, type (ISO or NSO), and the effective grant date with precision to avoid ambiguity.

Vesting Schedule

Describe cliff periods, periodic vesting intervals, acceleration triggers on change of control, and conditions for forfeiture in clear, actionable terms.

Exercise Price

State the per-share exercise price calculation, how FMV is determined, and any adjustments for stock splits or corporate actions.

Term & Expiration

Define the option term, expiration triggers including post-termination windows, and consequences of termination for cause versus resignation.

Transfer Restrictions

Include nontransferability clauses, permitted transferees (e.g., family), and any right of first refusal or repurchase provisions.

Tax & Withholding

Explain tax treatment at grant, vesting, and exercise, employer withholding obligations, and responsibility for tax advice and reporting.

Real-World Use Examples

Sample customer scenarios show how different organizations use electronic execution and standardized templates for consistency.

Optica Ventures (COO)

The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers.

Board approvals were tracked electronically to speed issuance.
Executed option grants were automatically archived with audit trails so the company maintained consistent records for audits and subsequent equity rounds.

Tech Data (CEO)

Tech Data uses airSlate SignNow to improve our internal and external customer service while increasing our speed to revenue.

Integration with existing systems streamlined approvals.
The company consolidated signed grants in its records system and reduced manual handling during grant cycles.

Frequently Asked Questions and Practical Answers

Answers to common execution, validity, and administration questions for Employee Option Grant Agreements.

Need help? Contact support

Can an option agreement be signed electronically?
Yes. Under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, electronic signatures satisfy signature requirements for most commercial agreements; confirm exceptions that bar e-signatures for a given matter.
When is notarization required?
Not commonly required for option grants; notarization or RON may be used for added authentication or for related corporate filings. Check state notary rules and your company’s charter or plan requirements.
How do I correct a signed agreement?
Execute a written amendment signed by all parties or a mutual rescission and re-issue. Record approvals and updated signatures to preserve a clear audit trail.
What authentication should I use?
Use email with optional SMS code or stronger methods for high-value grants; retain signer metadata and an audit trail to support attribution.
Is board approval necessary?
Yes. Documented board or committee approval is standard; include the approval reference in the grant notice and retain a copy with corporate minutes.
Which retention rules apply?
Retain executed grants per tax and corporate record rules: generally a minimum of 3 years for IRS purposes and longer where state, SEC, or industry rules require it.

be ready to get more

Join over 28 million airSlate SignNow users

Sign Now