Exercising Employee Stock Options

An employee stock option is a contract between the employer and employee to purchase the common shares of the company at a pre-defined and agreed-upon rate within a particular time period. The employee stock options have become a popular benefit given to valuable and new employees as an incentive to join a company and work hard to make the company a success. Exercising a stock option means purchasing the shares of stock as per the stock option agreement. An employee gets the stock options as a part of their compensation plan in their company. The benefit of the options is that it comes at a lower price than the FMV of the shares at the time the option is exercised (that is, at the time the employee buys the shares from the company and becomes the owner of the shares).

To know more about exercising employee stock options or other kinds of stock option plans available, check out our blog or knowledge center here. And if you have not yet started using Eqvista as your cap table application, it’s time to do so. Check out our cap table software here & contact us today!