Can an option grant be signed electronically?

Yes. Electronic signatures are enforceable under the ESIGN Act and UETA when parties demonstrate intent, consent, attribution, and reliable record retention.

Do grants need to be notarized?

Generally no for routine option grants; notarization is uncommon. Check state or corporate requirements if the notice is part of a transfer or property deed.

What happens if the exercise price is wrong?

An incorrect exercise price can jeopardize ISO status and trigger tax liabilities; correct errors promptly and document board approvals.

How should signed notices be stored?

Store signed records in a secure document repository with audit trails, retain for tax and corporate recordkeeping periods, and ensure regular backups.

Who should review the notice before sending?

Have equity administrators, HR, and legal counsel verify terms, consistency with the equity plan, and tax implications prior to distribution.

Can the grant be revoked after acceptance?

Revocation depends on the notice terms and board actions; unilateral revocation after acceptance may create liability unless reserved in the plan or agreement.

Electronic Signature
Templates
HR
Employee Option Grant Notice

Employee Option Grant Notice

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

EMPLOYEE OPTION GRANT NOTICE

Company Name: Plan Name:

Grant Number: Grant Date:

Personal Information

Full legal name Home address Phone Email

Position & Employment

Job title Department Reporting manager

Employment start date: Current annual salary:

Option Grant Summary

Grantee:

Option type: Incentive Stock Option (ISO) Nonqualified Stock Option (NQSO)

Number of shares subject to option: Exercise price per share:

Vesting commencement date: Option expiration date:

Vesting schedule and conditions

Cliff: Subsequent vesting frequency:

Exercise, Termination & Transfer Restrictions

Exercise method and payment:

Termination of service: vesting upon termination shall be governed by the terms of the Plan and any applicable option agreement. Post-termination exercise period (days):

Transferability: The option is non-transferable except as permitted by the Plan. By accepting this grant, the grantee acknowledges the securities law and transfer restrictions set forth in the Plan and any accompanying agreement.

Tax Withholding & Section 409A

Tax withholding: The Company has the right to require payment, or to withhold from any payment otherwise due to the grantee, any federal, state or local taxes required by law to be withheld in connection with this grant. The grantee acknowledges responsibility for any tax liability arising from the grant, vesting or exercise of the option.

Section 409A: To the extent applicable, the terms of this grant and any associated agreement are intended to comply with or be exempt from Section 409A of the Internal Revenue Code. Any ambiguities shall be interpreted consistent with such intent.

Material Terms & Acknowledgments

This Notice is subject in all respects to the terms of the Company’s Plan, the Option Agreement and any applicable award agreements. The grant described herein does not confer on the grantee any rights to continued employment or service. Employment is at-will unless expressly provided otherwise in a separate written agreement.

By signing below, the grantee acknowledges receipt of this Notice and that they have read, understand and accept the terms and conditions of the Plan and any Option Agreement controlling this grant.

Acknowledgement (check to accept) I accept the terms of this Option Grant Notice and agree to be bound by the Plan and Option Agreement.

Employment History

Previous employer #1 - Company name Responsibilities Previous employer #2 - Company name Responsibilities

Education

Highest degree

References

Reference 1 Reference 2 Reference 3

Legal Disclosures

At-Will Employment: The grant of this option does not create a contract of employment for any specific period. Employment or service with the Company, if any, is on an at-will basis unless a written agreement signed by an authorized Company representative states otherwise.

Equal Opportunity Statement: The Company is an equal opportunity employer. Employment and advancement are based solely on individual merit and business needs.

Authorization

I authorize the Company to contact prior employers and references and to conduct background checks as necessary for employment or compliance in connection with this grant.

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

Applicant / Grantee Certification

I certify that all information provided in connection with this Option Grant Notice and any attached employment forms is true and complete to the best of my knowledge. I understand that any material misstatement or omission may be grounds for rescission of the grant or termination of employment.

I certify that all information provided is true and complete.
I consent to the terms of the Plan and Option Agreement and acknowledge that I have received copies of those documents.

Employee:

Signature:

Date:

Company (Authorized Representative):

By:

Date:

What the Employee Option Grant Notice Is and When It’s Used

An Employee Option Grant Notice documents the grant of equity-based compensation—commonly stock options or stock appreciation rights—to an employee. It states the number of options, exercise price, vesting schedule, grant date, expiration, and any transfer or forfeiture conditions. The notice may be accompanied by a stock option agreement and plan documents that describe tax treatment, acceleration on termination, change of control provisions, and exercise procedures. Employers use it to create a clear, written record of the grant offer and the employee’s rights and obligations under corporate and tax rules.

Why a Clear Grant Notice Matters for Employers and Employees

A written Employee Option Grant Notice reduces ambiguity about vesting, taxation, and exercise rights, supporting enforceability and consistent recordkeeping.

Who Prepares and Who Receives the Grant Notice

Each party should retain a signed copy for payroll, tax reporting, and future disputes.

HR and equity administrators responsible for issuing grants and keeping corporate records.
General counsel or outside securities counsel who review terms for compliance with securities and tax law.
Employees and new hires who receive, sign, and return the notice to accept or acknowledge the grant.

Core Elements to Include in a Professional Grant Notice

A complete Employee Option Grant Notice reduces future disputes by stating essential commercial and legal terms clearly.

Grant Details

Number of options, option type (ISO/NQSO), grant date, and grant serial or award ID so the grant is uniquely identifiable in company records.

Exercise Price

Per-share exercise price and currency, how it was determined, and confirmation that price meets applicable tax and corporate valuation requirements.

Vesting Schedule

Exact vesting commencement date, cliff provisions, periodic vesting increments, and conditions that accelerate or suspend vesting.

Expiration and Exercise

Option expiration date, post-termination exercise windows, and any special rules after leave, disability, or death.

Transfer Restrictions

Limits on transferability, rights of first refusal, repurchase rights, and restrictions required by the equity plan or securities laws.

Tax Notice

Summary of tax consequences, withholding obligations, and requirement to consult tax counsel; note that employer reporting and withholding will follow applicable law.

Step-by-Step: Issuing and Executing a Grant Notice

Follow these steps to issue, accept, and record an employee option grant.

01

Prepare Notice: Draft terms consistent with equity plan and board approval.
02

Send to Employee: Deliver notice by secure email or eSignature platform.
03

Employee Signs: Employee reviews, signs, and returns the notice.
04

Record Grant: Add to cap table and payroll records; update option ledger.

Configuring an Online Completion and Approval Workflow

Design a workflow that secures approval, collects signatures, and records the grant in corporate systems.

Field	Configuration
Grant Document Template	Use a master template with placeholders for name, date, quantity, and price.
Signer Order	Set employee signature first, then HR or equity administrator countersign.
Authentication	Use email link plus optional SMS or SSO for stronger signer identity.
Storage	Automatically attach signed PDF to employee record and option ledger.

Where to Send or File a Signed Grant Notice

Routing depends on company processes; typical destinations are listed below.

Employee Copy: Deliver a signed PDF to the employee for their tax records.
HR Records: Store signed notice in the employee’s personnel file and benefits records.
Equity Ledger: Update the company’s option ledger and cap table with grant details.
Legal File: Retain countersigned copy with corporate secretary or counsel for governance.

Digital Signing and Technical Requirements

Ensure the chosen solution meets ESIGN/UETA rules and any industry compliance requirements before relying on electronic records for tax or securities purposes.

Document Formats: PDF | DOCX
Integrations: HRIS and cap table systems
Security: AES-256 at rest

Key Timing Considerations and Deadlines

Certain dates affect tax treatment and exercise rights; maintain consistency across documents.

Grant Date Effective:

Date used to set exercise price and tax measurement.

Vesting Commencement:

Start date for vesting schedule; impacts cliff and accrual.

ISO Holding Period:

Two-year grant/one-year exercise rule for favorable ISO tax treatment.

Post-Termination Exercise:

Deadline for exercising vested options after employment ends.

Tax Reporting:

Employer reports option-related compensation per IRS rules and plan terms.

Common Mistakes to Avoid When Preparing the Notice

Using an incorrect grant date or exercise price that conflicts with board resolution and valuation documents, creating tax and ISO eligibility problems.
Failing to specify vesting triggers or acceleration events, which leads to disputes at termination or change of control.
Neglecting to record the grant in the option ledger and cap table, causing mismatches in outstanding equity and shareholder dilution calculations.
Omitting or providing incorrect tax guidance or withholding instructions, resulting in employee surprise and potential reporting errors.

Legal and Tax Risks from Incomplete or Incorrect Notices

Tax Issues: Incorrect reporting can trigger IRS penalties and retroactive tax liabilities.

Securities Risk: Noncompliant grants may violate state or federal securities rules.

Contract Disputes: Ambiguous terms can lead to litigation over vesting or exercise rights.

Accounting Impact: Improperly documented grants affect ASC 718 expense recognition.

Recordkeeping Failures: Missing ledgers can impair audits and investor diligence.

Employee Relations: Miscommunication undermines retention and trust.

eSignature Pricing and Feature Snapshot for Grant Notices

Compare per-user starting price and key commercial features when selecting an eSignature provider. signNow is listed first for parity with platform references.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies	Varies	Varies	Varies
Bulk Send	Yes (Business Premium)	Yes	Yes	Yes	Varies
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes (BAA available)	Varies	Varies	Varies	Varies
Envelope Cap	No cap	100 envelopes/user/year	Varies	Varies	Varies

Frequently Asked Questions About Employee Option Grant Notices

Answers to common questions about execution, tax treatment, and electronic handling of option grant notices.

Need help? Contact support

Can an option grant be signed electronically?
Yes. Electronic signatures are enforceable under the ESIGN Act and UETA when parties demonstrate intent, consent, attribution, and reliable record retention.
Do grants need to be notarized?
Generally no for routine option grants; notarization is uncommon. Check state or corporate requirements if the notice is part of a transfer or property deed.
What happens if the exercise price is wrong?
An incorrect exercise price can jeopardize ISO status and trigger tax liabilities; correct errors promptly and document board approvals.
How should signed notices be stored?
Store signed records in a secure document repository with audit trails, retain for tax and corporate recordkeeping periods, and ensure regular backups.
Who should review the notice before sending?
Have equity administrators, HR, and legal counsel verify terms, consistency with the equity plan, and tax implications prior to distribution.
Can the grant be revoked after acceptance?
Revocation depends on the notice terms and board actions; unilateral revocation after acceptance may create liability unless reserved in the plan or agreement.

be ready to get more

Join over 28 million airSlate SignNow users

Sign Now