Understanding Stock Option Grants and ISO Limits

This topic provides an overview of stock option grants and discusses the validation of ISO limits.

A stock option grant typically enables the optionee to purchase a specified number of shares of stock for a specified price over a specified period of time. Usually the right to purchase shares is detailed in the grant agreement and is contingent on the employee's continued service or other contribution to the organization for a specific period of time.

The most common types of stock options do not require a cash investment until the optionee purchases (exercises) the option shares.