Stock option plans give employees the right to purchase_____.
A) an unlimited number of shares of company stock at a specified exercise price for a limited period of time
B) an unlimited number of shares of company stock at a specified exercise price for an unlimited period of time
C) a fixed number of shares of company stock at a specified exercise price for a limited period of time
D) a fixed number of shares of company stock at a specified exercise price for an unlimited period of time

Question

Quizplus · Accepted Answer

Stock option plans typically give employees the right to purchase a fixed number of shares of company stock at a specified exercise price for a limited period of time, generally up to 10 years. Option plans typically have vesting periods, and the exercise price is usually set at the current market price of the stock at the time the option is granted. Option plans can be a valuable tool for companies to incentivize and retain employees, as well as align their interests with those of the company's shareholders. However, there are risks and complexities associated with option plans, and they are not a suitable compensation tool for all companies or employees.

Stock Option Plans Give Employees the Right to Purchase_____