The Exercise of Incentive Stock Options Procedure summarizes the steps needed for exercising options. Employees that are granted options to purchase stock in the company may exercise their right to purchase the shares according to the terms of the Option Plan. This procedure applies to any past or present employee with vested options. (6 pages, 744 words)
An option exercise letter or notice should be written by the employee to the Chief Financial Officer along with payment in full for the number of shares to be purchased, pursuant to the exercise agreement. As an alternative, employees may exercise their options for purchase of the company’s stock through a payroll deduction plan.
Exercise of Incentive Stock Options Definitions:
Optionee – Participant in a company’s stock option plan who has been granted the right to purchase shares of the company or a subsidiary of the company at a specific price for a set period of time.
Restrictive legend – Caption or inscription on a document stating that its use is restricted, usually by statute or regulation.