What is a stock option grant letter?
Equity is one of the most valuable things a growing company can offer, and one of the most misunderstood. An employee who was told about "some options" in an interview deserves a letter that sets out the numbers: how many options, the price per share, when the grant was made and how long it lasts. A clear letter also helps the company keep its cap table and its promises in line.
This template summarises a grant made under your existing equity plan. It lists the options, share class, exercise price and expiry, then explains vesting in everyday words: the total period, an optional cliff, and whether the rest vest monthly, quarterly or yearly. You can add acceleration terms on a sale. It covers how long vested options can be exercised after the employee leaves, and makes clear that the plan governs and tax advice is worth getting. The employee signs an acceptance section.
- Best for
- Startups and private companies granting options under an existing plan
- Signed by
- A company officer, and the employee to accept
- Covers
- Options, exercise price, grant date, vesting and cliff, expiry, leaving rules
- Length
- About 2 pages
When to use a stock option grant letter
- A new hire's options, approved at the next board meeting after they join
- A refresh grant for a long-serving employee whose first grant has vested
- A promotion that comes with additional equity
- Options for an early employee joining before the first funding round
- Summarising a grant in plain language alongside the formal plan documents
What you fill in
19 blanks, then the name and email of each person who signs: company, employee.
1 The grant
- Date of the letter*
- Company name*
- Employee's full name*
- Plan name*
- Date the board approved the grant
- Grant date*
- Number of options*
- Class of shares*
- Currency*
- Exercise price per share*
- Type of option (if any)
2 Vesting
- Vesting start date*
- Total vesting period (years)*
- Cliff (months)
- After the cliff, options vest* monthly · quarterly · annually
- Acceleration on a sale (optional)
3 Expiry and leaving
- Options expire after (years)*
- Time to exercise after leaving*
- Accept by
4 Who signs
- Company signature and date, job title · An officer or director authorised to sign equity grants.
- Employee signature and date · The employee receiving the options.
What the stock option grant letter covers
- Your grant
- Vesting
- Exercising your options
- If your employment ends
- The Plan
- Acceptance
Using the stock option grant letter, step by step
1 Name the plan and the grant
Enter the plan name, the grant date and, if you like, the date the board approved it. Add the number of options, the share class and the exercise price per share.
2 Set the vesting
Enter the vesting start date, the total years and the cliff in months, or leave the cliff empty for none. Choose how often the rest vest, and add any acceleration on a sale.
3 Expiry and leaving
Set how many years the options last and how long the employee has to exercise vested options after leaving. Add an accept-by date if you need the signature back by a deadline.
4 Sign and accept
Send it for signing. The company officer signs the letter, the employee signs the acceptance, and the signed copy is filed in your vault, ready for the next funding round's due diligence.
Tips before you send it
- Make sure the board has actually approved the grant and the exercise price before you send the letter.
- Double-check the numbers against your cap table. Typos in an equity letter are painful to fix later.
- Tax rules for options vary a lot between countries and option types. Point the employee to the plan and suggest they take advice.
- A longer exercise window after leaving is more generous but can change the tax treatment of some option types.
Sign it online in minutes
- Fill in the blanks. Names, dates and amounts go straight into the agreement — the preview shows exactly where.
- Name who signs. Tick “This is me” for your own part. FileIt builds the PDF with every signature, date box on the right line, and you can check or move anything before sending.
- Send it. Each signer gets a secure link and signs from any device — no account needed. The signed PDF, with an audit trail and a Certificate of Completion, is filed in your vault and emailed to everyone.
Stock option grant letter: frequently asked questions
Does this letter replace our equity plan or option agreement?
No. It summarises a grant made under your plan, and says that the plan wins if anything differs. Use it alongside the plan documents, not instead of them.
What is a vesting cliff?
A period, often 12 months, before any options vest at all. When it ends, the options for those months vest together, and the rest vest gradually after that. Leave the cliff empty if there isn't one.
What happens to options when someone leaves?
Unvested options lapse on the last day. Vested options can be exercised within the window you set, such as 90 days, or until expiry if that is sooner. The plan may set special rules for death, disability or dismissal for cause.
Can a stock option grant be accepted by e-signature?
Electronic signatures are widely used for equity documents. Check whether your plan or your company's articles ask for anything specific. FileIt keeps the signed PDF with an audit trail and a Certificate of Completion.