Can an Option Grant Notice be e-signed?

Yes. Electronic signatures satisfy federal ESIGN Act (15 U.S.C. ch. 96) and state UETA laws in most jurisdictions; New York accepts ESRA-compliant e-signatures. Exceptions apply for categories explicitly excluded from ESIGN/UETA.

Who must sign the notice?

Typically the authorized company representative and the recipient. Ensure the signer listed has authority under the company’s bylaws or board resolution to bind the issuer.

Is notarization required?

Not usually for standard option grants. Notarization is rare unless required by the plan or specific state law; when required, follow state notary or RON rules and retain notarization evidence.

What if the recipient’s name differs on tax records?

Correct name mismatches before reporting. Incorrect names or TINs can trigger IRS backup withholding and delays in issuing Form 1099 or other tax reporting.

How do I document acceptance?

Capture a signed notice or an explicit electronic acknowledgment with timestamp, signer identity, and IP address to create a verifiable audit trail for future compliance or disputes.

Can I amend a notice after issuance?

Yes, but amendments should be documented in a written amendment or replacement notice signed by the same authorized parties; retain both original and amendment for the record.

Electronic Signature
Templates
Legal
Option Grant Notice

Option Grant Notice

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OPTION GRANT NOTICE

This Option Grant Notice (the "Notice") is made as of Grant Date: by and between Company Name: a corporation organized under State of Incorporation: ("Company"), and Optionee Name: ("Optionee"). Plan Name: .

RECITALS

WHEREAS, the Company's board of directors (the "Board") has adopted the Plan and has the authority to grant options and to establish the terms and conditions of such grants; and

WHEREAS, the Board has authorized the grant of a Stock Option to Optionee on the terms set forth herein and subject to the Plan and the Stock Option Agreement; and

WHEREAS, Optionee is a service provider to the Company and the grant is intended to provide Optionee with an equity inducement and incentive consistent with the Plan.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and in the Plan, the Company grants the Option on the terms and conditions set forth below.

1. GRANT OF OPTION

Subject to the terms of this Notice and the Plan, the Company hereby grants to Optionee an option to purchase up to shares of the Company's common stock (the "Option"). The Option is designated as: Incentive Stock Option (ISO) Nonstatutory Stock Option (NQSO). The terms of this grant are subject to the Company's Equity Incentive Plan and a separate Stock Option Agreement executed by Optionee (the "Agreement").

2. EXERCISE PRICE; PAYMENT

The per share exercise price for the Option shall be (the "Exercise Price"). Payment of the Exercise Price upon exercise shall be made in cash or by certified check, by payment through a broker-assisted cashless exercise (if permitted by the Plan and applicable law), by delivery of previously acquired shares of the Company's common stock having a fair market value equal to the aggregate Exercise Price, or by any other method permitted by the Plan and approved by the Committee.

3. VESTING

The Option shall vest and become exercisable in accordance with the following schedule, subject to Optionee's continuous service with the Company through each applicable vesting date:

Vesting Schedule (describe precise triggering events and percentages)

Notwithstanding the foregoing, the Committee may, in its discretion, accelerate vesting in whole or in part upon the occurrence of certain events, including a change in control, termination without cause, or death or disability, as expressly provided in the Agreement.

4. TERM AND EXPIRATION

The Option will expire on the earlier of (a) the Expiration Date: , or (b) the date specified in the Agreement upon termination of Optionee's service. If Optionee's service terminates for reasons other than death or disability, Optionee's right to exercise vested Options shall be limited to the post-termination exercise period of days, unless otherwise provided in the Agreement. If service terminates by reason of death or disability, the post-termination exercise period shall be .

5. METHOD OF EXERCISE

An exercise of the Option shall be effected by delivery to the Company of a written Notice of Exercise in the form required by the Company, together with payment of the Exercise Price and applicable withholding taxes. The Company may, in its discretion and to the extent permitted by the Plan and applicable law, permit payment by net exercise, broker-assisted cashless exercise, or other method acceptable to the Company.

6. TRANSFERABILITY

The Option shall not be transferable except by will or by the laws of descent and distribution, and during Optionee's lifetime shall be exercisable only by Optionee, unless a transfer is expressly permitted by the Plan and approved in writing by the Committee. Any purported transfer in violation of this Section shall be null and void.

7. TAX WITHHOLDING

Optionee acknowledges that the exercise, vesting or disposition of the Option may give rise to tax withholding obligations. The Company shall have the authority to require satisfaction of all federal, state, local and foreign tax withholding obligations in cash or by deduction from compensation or by other means acceptable to the Company, and to withhold or refuse to deliver any certificate evidencing shares or to register transfers until such obligations are satisfied.

8. ADJUSTMENTS

The number and kind of shares subject to the Option and the Exercise Price shall be adjusted as provided in the Plan in the event of any change in the outstanding shares of the Company by reason of recapitalization, stock split, reverse stock split, reclassification, combination, consolidation, or similar change or corporate transaction. Any adjustments shall be binding and conclusive for all purposes.

9. RESTRICTED STOCK; NO RIGHTS AS SHAREHOLDER

Optionee shall have no rights as a stockholder with respect to any shares subject to the Option until: (a) the Option has been duly exercised in accordance with its terms, and (b) the shares have been issued to Optionee and recorded on the books of the Company. All shares issued upon exercise of the Option shall be subject to such restrictions and legends as the Company deems appropriate.

10. REPRESENTATIONS AND COVENANTS

Optionee represents and warrants that Optionee has received and reviewed a copy of the Plan and the Agreement and understands that the grant is subject to all terms, conditions and provisions thereof. Optionee agrees to comply with all transfer restrictions and other terms imposed by the Company or required by applicable securities laws.

11. NOTICES

Company Notice Address Optionee Notice Address

12. GOVERNING LAW

This Notice and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the State of , without regard to its principles of conflicts of law.

13. ENTIRE AGREEMENT

This Notice, together with the Plan and the Agreement, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral, relating to the grant of the Option.

14. SEVERABILITY

If any provision of this Notice is held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not affect any other provision hereof, and this Notice shall be reformed to reflect the parties' intent to the fullest extent permitted by law.

15. AMENDMENT; WAIVER; COUNTERPARTS

This Notice may be amended only by a written instrument signed by both the Company and Optionee. No failure or delay by either party in exercising any right under this Notice shall operate as a waiver of that right. This Notice may be executed in counterparts and delivered by electronic transmission, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

ACCEPTANCE

Optionee must accept this Option by signing this Notice and returning a signed copy to the Company within days of the grant date. Acceptance is conditioned upon Optionee's execution of the Agreement and compliance with the Plan.

Company:

By:

Date:

Optionee:

By:

Date:

What an Option Grant Notice is and when it’s used

An Option Grant Notice is a written communication that documents the grant of equity options to an individual or entity, specifying the number of options, exercise price, vesting schedule, and expiration. It accompanies or references the governing stock option plan and often requires the recipient’s acknowledgment or acceptance. The notice creates notice-level evidence of terms and deadlines and triggers administrative steps such as tax withholding, recordkeeping, and plan reporting. Option Grant Notices are commonly used for employee stock options, consultant awards, and board-authorized grants.

Why a clear Option Grant Notice matters

A precise notice reduces ambiguity about grant terms, protects corporate governance, and documents timing for vesting, exercise, and tax reporting. Clear notices support enforceability and simplify administrative processes across payroll, equity administration, and legal review.

Who prepares and who receives an Option Grant Notice

Typical preparers and recipients are listed below to clarify responsibilities during grant processing.

Equity administrators and HR teams managing option programs for employees and contractors.
General counsel or outside counsel drafting plan-compliant language and reviewing tax consequences.
Recipients (employees, consultants, advisors) who must confirm acceptance and provide tax data.

Assign clear roles for preparation, review, and signature to reduce errors and processing delays.

Primary signers and stakeholders

Company Administrator

The equity or HR administrator prepares the notice, ensures alignment with the stock plan, records grant details in the equity management system, and coordinates signature and tax reporting with payroll and legal teams.

Option Recipient

The employee, contractor, or advisor who receives the notice must review the terms, confirm acceptance if required, and provide accurate legal name and tax identification information for withholding and reporting.

Core components to include in a professional Option Grant Notice

A complete notice states precise grant mechanics, timelines, and references to the controlling plan and agreement so recipients and administrators can act without further clarification.

Grant specifics

Number of options, class (ISO vs nonstatutory), exercise price, and any share class limitations; reference the governing plan document.

Vesting schedule

Exact vesting triggers and dates, including cliff provisions and accelerated vesting events, to avoid ambiguity in future disputes.

Exercise window

Expiration date and any post-termination exercise period measured in days; specify time zone for deadlines where relevant.

Tax treatment

State and federal tax characterizations, withholding responsibilities, and any recipient actions required for ISO or Section 83(b) elections.

Acceptance terms

How a recipient accepts (signature, electronic acknowledgment), any deadline to accept, and consequences of non-acceptance.

Reference materials

Cite the stock option plan, award agreement, and plan documents with version dates to avoid interpretive conflicts.

Step-by-step: preparing and issuing an Option Grant Notice

Follow this sequential checklist to issue a legally consistent and administrable notice.

01

Confirm plan authority: Verify board approval and available option pool.
02

Draft notice: Populate grant fields and attach governing plan.
03

Legal review: Validate tax language and enforceability.
04

Deliver and track: Send to recipient and record acceptance and audit data.

How electronic delivery and acceptance typically flow

Standard e-delivery follows a predictable sequence that creates an audit trail and supports compliance with ESIGN/UETA.

Upload document: Add the notice to the e-sign platform.
Place fields: Add signature, date, and required data fields.
Send to recipient: Use email or secure link with authentication.
Capture completion: Store signed copy and audit trail.

Recommended eSignature workflow settings for Option Grant Notices

Configure the following settings to balance ease of signing with authentication and recordkeeping requirements.

Field	Configuration
Authentication	Email link plus optional SMS or ID verification
Access expiration	Set link to expire after 30–90 days
Audit trail	Enable IP, timestamp, and action log capture
Document retention	Store signed PDF with certificate of completion

Technical considerations when choosing e-delivery

Ensure the platform supports legal, security, and integration needs for equity administration.

Integrations: CRM, HRIS, and equity platforms supported
Formats: PDF, DOCX, and audit-friendly exports
Security: Encryption and compliance certifications

Confirm platform integrations (Salesforce, NetSuite, Google Workspace, Microsoft 365) and output formats to automate recordkeeping and reporting.

Key dates typically included or triggered by an Option Grant Notice

Identify and communicate each deadline clearly to prevent forfeiture, tax consequences, or administrative disputes.

Grant effective date:

The date the grant takes effect and starts vesting computations.

Acceptance deadline:

Timeframe for recipient to accept or return signed notice if required.

Vesting milestones:

Scheduled dates when portions of the grant vest.

Exercise expiration:

Final date to exercise vested options before lapse.

Section 83(b) window:

If applicable, the 30-day filing period for 83(b) election with the IRS.

Processing milestones from grant to recordation

Track these sequential milestones so each administrative team knows its responsibilities and deadlines.

01

Board authorization

Board or compensation committee approval recorded and documented.

02

Issuance of notice

Notice prepared and distributed to recipient.

03

Recipient response

Acceptance or queries resolved, signatures captured.

04

Equity ledger update

Grant recorded in cap table and equity management system.

Common mistakes when preparing Option Grant Notices

Using informal language that contradicts the controlling stock plan, which can create interpretive disputes in enforcement.
Failing to specify time zones for expiration or exercise deadlines, leading to missed deadlines and contested exercises.
Omitting reference to the governing plan version and date, which can create uncertainty over applicable plan provisions.
Not collecting accurate tax identification or TIN information, triggering backup withholding or reporting delays.

Risks and potential consequences of incorrect notices

Tax exposure: Incorrect treatment can create unexpected withholding or reporting obligations.

Enforceability risk: Ambiguous terms may be challenged in dispute resolution.

Forfeiture: Missed acceptance or exercise deadlines can cause loss of rights.

Recordkeeping gaps: Poor documentation complicates audits and compliance reviews.

Data errors: Wrong legal names or TINs trigger IRS backup withholding.

Authentication failures: Weak signer verification may weaken evidentiary value.

Security and compliance elements to preserve evidentiary value

Encryption: TLS 1.2/1.3 in transit

Data at rest: AES-256 encrypted storage

Certifications: SOC 2 Type II and ISO 27001

Regulatory compliance: ESIGN and UETA adherence

HIPAA support: BAA available where required

Audit trail: Timestamps, IP, and action logs

How an Option Grant Notice compares with related equity documents

A concise comparison helps determine whether to use a simple notice or a more detailed agreement for the grant.

Document	Option Grant Notice	Stock Option Agreement
Purpose	notice of terms	detailed contractual terms
Signatures required	often recipient	yes, parties and company
Legal detail	summary-level	full legal provisions
Typical use	mass grants and notices	individual negotiated grants

eSignature vendor pricing and feature overview for signing Option Grant Notices

Compare basic starting prices and capability signals for common eSignature vendors when choosing a platform for Option Grant Notices. SignNow is listed first per comparisons.

	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 by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
Envelope Cap	No envelope cap	100 envelopes/user/year	Varies	Varies	Varies

Common questions about Option Grant Notices and electronic signing

Answers to frequent practical and legal questions about issuing, signing, and storing Option Grant Notices.

Need help? Contact support

Can an Option Grant Notice be e-signed?
Yes. Electronic signatures satisfy federal ESIGN Act (15 U.S.C. ch. 96) and state UETA laws in most jurisdictions; New York accepts ESRA-compliant e-signatures. Exceptions apply for categories explicitly excluded from ESIGN/UETA.
Who must sign the notice?
Typically the authorized company representative and the recipient. Ensure the signer listed has authority under the company’s bylaws or board resolution to bind the issuer.
Is notarization required?
Not usually for standard option grants. Notarization is rare unless required by the plan or specific state law; when required, follow state notary or RON rules and retain notarization evidence.
What if the recipient’s name differs on tax records?
Correct name mismatches before reporting. Incorrect names or TINs can trigger IRS backup withholding and delays in issuing Form 1099 or other tax reporting.
How do I document acceptance?
Capture a signed notice or an explicit electronic acknowledgment with timestamp, signer identity, and IP address to create a verifiable audit trail for future compliance or disputes.
Can I amend a notice after issuance?
Yes, but amendments should be documented in a written amendment or replacement notice signed by the same authorized parties; retain both original and amendment for the record.

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