The Equity Grant Term Reference, Each Clause Keyed to a Written Ask

This reference is for anyone holding an offer with stock options or RSUs who needs to know what each grant term means before signing. Each entry defines one clause, names the document where the binding version lives, gives the market default where a published one exists, says how the term fails, and supplies the written question to send the recruiter. Find the entry you need, check it, and move on.

Which document binds each equity term?

The equity plan, the grant notice, and the award agreement bind almost every equity term. The offer letter only recommends a grant to the board, and it binds only where it states the terms that should govern the award. Knowing which document holds a term tells you where a promise has to be written down to survive.

Filed offer letters are blunt about this. One says the equity promise "is not a promise of compensation and is not intended to create any obligation on the part of the Board to approve the grant." Another makes the grant subject to the company obtaining a 409A valuation and the board approving it. Grant notices then fold the plan in by reference and supersede what came before. Iridium's filed notice says the notice, agreement, and plan supersede prior agreements, except an offer letter "specifying the terms that should govern this Award."

One thing is not publicly established: which terms a company officer can change for a single hire without going back to the board. It depends on the delegation clause in each company's plan. If a recruiter says "we can do that for you", find the delegation language in the plan before you rely on it.

Size, type, and price terms

Four terms set what the grant is worth on day one: the share count, the denominator it sits against, the option type, and the strike price. Read them together, because a correct share count against the wrong denominator, or an ISO label that the tax code overrides, gives you a number that looks right and isn't.

Share count

• Means: the number of options or RSUs the company will recommend the board grant you.
• Binds in: the grant notice. The offer letter states the number the company intends to recommend.
• Default: none. A share count means nothing without a denominator.
• Fails when: it is quoted without a denominator, or against shares outstanding only, which makes your percentage look larger than it is.
• Ask in writing: "Please confirm the share count that will be recommended to the board and that the grant notice will state the same number as the offer letter."

Fully diluted denominator

• Means: the company's total share count including issued stock, outstanding options, warrants, and the unallocated option pool (shares reserved for future grants but not yet granted).
• Binds in: no grant document. It is a company figure that changes with every round, so the only record you get is the one you ask for.
• Default: the standard to insist on is a total that includes options, warrants, and the unallocated pool, measured as of a stated date.
• Fails when: the company quotes shares outstanding, or gives a fully diluted figure with no date.
• Ask in writing: "What is the fully diluted share count, including outstanding options, warrants, and the unallocated pool, and as of what date was it measured?"

ISO or NSO type

• Means: an ISO (incentive stock option) is an option that meets IRC section 422 and gets preferential tax treatment. An NSO (non-qualified stock option) is any option that does not.
• Binds in: the grant notice checkbox states the intent. The tax code decides the outcome.
• Default: three rules from section 422 apply to every ISO:
  • ISO status is lost on exercise more than 3 months after employment ends, or 1 year for disability.
  • Value above $100,000 that first becomes exercisable in a calendar year, across all of the employer's plans, is treated as NSO.
  • To keep ISO treatment on sale, shares cannot be sold before the later of 2 years from grant and 1 year from transfer. The regulation text I worked from is fragmentary on this point, so read the full section 422 regulation before you rely on the exact dates.
• Fails when: the notice says ISO, but the $100,000 limit or a late exit exercise turns part of the grant into NSOs.
• Ask in writing: "Will the grant be ISO, NSO, or split? At the current 409A price, how many shares exceed the $100,000 first-exercisable limit in any calendar year?"

Share count (from offer letter): ______
Fully diluted total: ______  measured as of: ______
Includes options / warrants / unallocated pool? Y / N / N
Ownership = share count / fully diluted total = ______%

Option type stated: ISO / NSO / split
409A price per share: $______  409A valuation date: ______
Shares first exercisable in calendar year 1: ______
Year 1 value = shares x 409A price = $______
Amount above $100,000 (treated as NSO): $______
Repeat for each later calendar year: ______

Strike price and 409A date

• Means: the strike price is what you pay per share to exercise. It is set at the fair market value of common stock, usually from a 409A valuation, which is an independent appraisal of the common stock.
• Binds in: the board's grant approval, recorded in the grant notice. Filed letters grant at the first board meeting after the start date, so the strike is fixed after you sign.
• Default: under the independent-appraisal safe harbor, the valuation must be dated no more than 12 months before the grant. A value that is "more than 12 months old or no longer reflects material later information" is treated as unreasonable, so a priced round can make it stale sooner.
• Fails when: the letter quotes a strike from an old 409A, and the grant is actually priced after your start date and after a new round.
• Ask in writing: "What is the date of the 409A valuation the strike will be based on, and is a priced round expected to close before my grant date?"

Common stock is usually valued below the last preferred price, which is why your strike sits under the headline round price. Published ranges for that gap conflict, and none of the sources publishes a methodology.

These are common price as a percentage of the last preferred price, from a law firm and two valuation practitioners. At Series A the ranges differ by up to about 2x. Use them to see why the strike is lower than the round price, not to argue that your strike is wrong.

Vesting, acceleration, and repurchase terms

Vesting decides when you earn the grant, acceleration decides whether a sale speeds that up, and repurchase rights decide whether the company can take earned shares back. All three bind in the agreement and grant notice, not the letter, and none has a published market default in the sources behind this reference.

Vesting schedule and cliff

• Means: vesting is the schedule on which you earn the grant. A cliff is an opening period in which nothing vests, followed by a lump at its end.
• Binds in: the grant notice (vesting commencement date and schedule) and the agreement.
• Default: not established in the published data I rely on here. I will not state one. Read the grant notice.
• Fails when: the letter describes a schedule the notice does not match. Because the grant is made at a board meeting after you start, check whether the notice dates vesting from your start date or from the later grant date.
• Ask in writing: "Will vesting commence on my start date? What is the cliff length, and how often does vesting occur after it?"

Acceleration

• Means: single-trigger acceleration speeds up vesting on one event, such as a sale of the company. Double-trigger acceleration needs two events, usually a sale and a qualifying termination.
• Binds in: the award agreement or the plan. A recruiter's statement does not bind.
• Default: not publicly established.
• Fails when: a recruiter promises acceleration that appears nowhere in the letter, and the grant notice supersedes the conversation.
• Ask in writing: "Does this grant carry any acceleration on a change in control, single or double trigger? If yes, please state the trigger events and the percentage that accelerates in the offer letter."

Repurchase rights

• Means: the company's right to buy back shares you hold, under conditions and at a price the agreement sets. Unvested shares from early exercise are the common case.
• Binds in: the award agreement and the plan.
• Default: not publicly established.
• Fails when: you read the right as covering only unvested shares and the agreement reaches further. Read for two things: which shares it covers and what price applies.
• Ask in writing: "Does the company hold any repurchase right over vested or exercised shares? If so, which shares, triggered by what, and at what price?"

Exit and expiration terms

Exit terms decide whether vested equity survives your departure or the company's slow road to liquidity. For options, the term is the post-termination exercise period. For RSUs, it is the double-trigger liquidity condition and the expiration date. These are the clauses most likely to quietly zero out a grant.

Post-termination exercise period

• Means: the post-termination exercise period (PTEP) is how long you have after leaving to exercise vested options before they lapse.
• Binds in: the plan and the option agreement.
• Default: 90 days. Longer windows exist: Pinterest gives up to seven years to exercise vested options, and Carta's own window scales with tenure.
• Fails when: a 90-day window forces you to find cash to exercise on a timeline you did not choose, or an extended window makes you think your ISOs are safe when any exercise after month 3 is taxed as NSO.
• Ask in writing: "What is the post-termination exercise period for vested options, and how will the company treat ISOs exercised more than 3 months after termination?"

Extended windows rise and fall with layoffs, not hiring policy. Carta's figures count terminated options, not companies, and come from Carta customers only.

The thresholds differ (90 against 95 days), so the rows are not strictly comparable. Carta read the drop from 25% to 12.5% as exceptions made for laid-off staff, not a policy change. Don't assume an extension will be offered when you leave. Ask for it at hire.

The window matters more as exercise gets harder. Carta reports employees exercised 32.2% of vested in-the-money options in Q4 2024, against 54.2% three years earlier, and attributes the slide to lower valuations reducing both the motivation and the cash to exercise.

Double-trigger liquidity condition

• Means: a double-trigger RSU vests only when two conditions are met: time-based vesting, and a liquidity event such as an IPO or a sale.
• Binds in: the RSU agreement's definitions and the grant notice.
• Default: no published default definition. Filed examples show how narrow the binding text can be:
  • Syntiant: the condition is met six months after an IPO or on the following March 15, whichever comes first, or at a change in control.
  • CarGurus: settlement comes 180 days after an IPO.
  • Klaviyo: a sale counts only if prior holders do not keep 75% of the voting securities.
  • NASPP reports that most companies keep double-trigger RSUs out of liquidity programs "due to 409A issues", so a tender offer may not count.
• Fails when: the offer letter says "acquisition or IPO" and the binding definition is narrower.
• Ask in writing: "Please send the exact definition of the liquidity event for these RSUs. Does a tender offer or secondary sale count, and are there any continuity or timing conditions?"

RSU expiration date

• Means: the date by which the liquidity condition must be met. If it isn't, the RSUs are forfeited.
• Binds in: the grant notice. Syntiant sets its expiration there.
• Default: NASPP describes the term as "usually 6-7 year term from the time of grant." CarGurus says the liquidity event "must occur within seven years following the grant date", and ACELYRIN's unvested RSUs expire on the seventh anniversary of grant. How often terms run to 10 years or more is not published.
• Fails when: time vesting completes but no qualifying event happens before expiry. Syntiant's RSUs are then "forfeited in their entirety."
• Ask in writing: "What expiration date will the grant notice state, and has the company extended RSU expiration for earlier grants that reached it without a liquidity event?"

Early exercise, transfer, and refresh terms

These three terms decide what you can do with equity before a liquidity event. Can you buy shares early to start the tax clocks? Can you sell or pledge anything? Will you get more equity later? Only early exercise has a published default, and refresh policy lives in no grant document at all.

Early exercise and 83(b)

• Means: early exercise is buying options before they vest, which gives you shares the company can repurchase if you leave. An 83(b) election is an IRS filing that elects to be taxed when the shares are transferred to you rather than as they vest.
• Binds in: the plan and the option agreement.
• Default: about 15% of options on Carta can be early exercised, a share unchanged since 2010. How many eligible employees actually early exercise is not established publicly.
• Fails when: the 83(b) is counted from the offer date instead of the exercise date, or never filed.
• Ask in writing: "Does the plan allow early exercise of unvested options? If so, what repurchase terms apply to unvested shares, and will the company provide the transfer date in writing for my 83(b)?"

Filing mechanics: the election must be filed no later than 30 days after the property is transferred. The IRS accepts Form 15620 online, and paper Form 15620 or a letter election is still valid. The online tool caps each submission at 999,999 securities. For ISOs, the holding period begins on the date of exercise rather than the date of vesting, which is part of why early exercise is attractive.

Transfer limits

• Means: restrictions on selling, pledging, or transferring your options or shares while the company is private.
• Binds in: the plan and the award agreement.
• Default: not published in the sources behind this reference.
• Fails when: you plan around a secondary sale or tender offer that the agreement forbids, or that excludes your instrument. Recall NASPP's note that double-trigger RSUs are usually kept out of liquidity programs.
• Ask in writing: "Can vested options or exercised shares be sold in a company-approved tender or secondary sale? Does the company hold a right of first refusal, meaning it can match any outside offer?"

Refresh policy

• Means: additional equity grants after hire, whether at review time, on promotion, or once the initial grant is mostly vested.
• Binds in: nowhere, unless written into the offer letter. Grant documents cover only the grant they describe.
• Default: not published.
• Fails when: a recruiter describes a refresh program that is not in the letter, and you weigh it in your decision.
• Ask in writing: "Is there a refresh grant policy? If a refresh is part of this offer, please state the timing and target size in the offer letter."

How equity grant terms fail

Grant terms fail in a small number of repeatable ways, and almost each one comes with a false positive: a document or label that looks like confirmation but isn't. Check this list before you sign, because each failure is cheap to catch in writing and expensive to discover at exit.

1. Share count without a denominator. Your percentage looks right but uses shares outstanding only. False positive: a confident percentage on a recruiter call. Check: ask whether the total includes options, warrants, and the unallocated pool, measured as of a specific date.
2. ISO label on the offer. The grant is labelled ISO, but the $100,000 limit or an exercise after month 3 turns part of it into NSOs. False positive: the ISO checkbox on the grant notice. Check: compare shares vesting per year times the 409A price against $100,000.
3. Extended PTEP. A seven-year window exists, but options exercised after month 3 are taxed as NSOs. False positive: "you have years to exercise." Check: ask for the PTEP and how the company treats ISO conversion.
4. Double-trigger RSUs. Time vesting completes, no liquidity event happens before the seven-year expiry, and everything is forfeited, as in Syntiant's language. False positive: a fully time-vested balance on the equity portal. Check: get the expiration date and the liquidity definition, and confirm whether a tender offer counts.
5. Strike quoted in the offer letter. The letter quotes a stale 409A, but the grant is priced after your start date and after a new round. False positive: a specific dollar strike in the letter. Check: ask for the 409A valuation date and whether a priced round is pending.
6. Early exercise without a filed 83(b). The election is counted from the offer date, or never filed. False positive: an exercise receipt with no IRS confirmation. Check: keep the IRS confirmation, dated within 30 days of transfer.
7. Oral promises. A recruiter promises acceleration or a refresh that is not in the letter, and the grant notice supersedes it. False positive: a friendly email summarising the call. Check: insist the term is written into the offer letter.

How to read a grant before you sign, step by step

The procedure runs from collecting four documents to checking the board-approved grant against your letter, and it takes a few days, most of it waiting on answers. Steps 4 and 9 cannot fully happen before acceptance, because the grant is priced and issued after you start. That is why step 8, getting the terms into the letter, carries the weight.

Send the asks as one message so the answers come back as one record. Delete the lines that do not apply to your instrument.

Hi [Name],

Thank you for the offer. Before I sign, could you confirm the following equity terms in writing, and include them in an amended offer letter where they differ from the plan defaults?

1. Share count to be recommended to the board, and confirmation the grant notice will match it.
2. Fully diluted share count, including outstanding options, warrants and the unallocated pool, and the date it was measured.
3. Option type (ISO, NSO, or split), and how many shares exceed the $100,000 first-exercisable limit in any calendar year at the current 409A price.
4. Date of the 409A valuation the strike will use, and whether a priced round is expected before my grant date.
5. Vesting commencement date, cliff length, and vesting frequency after the cliff.
6. Any acceleration on a change in control, single or double trigger, with trigger events and percentage.
7. Any repurchase right over vested or exercised shares, and at what price.
8. Options: the post-termination exercise period, and how ISOs exercised more than 3 months after termination are treated.
9. RSUs: the expiration date in the grant notice, and the exact liquidity event definition, including whether a tender offer counts.
10. Whether early exercise is allowed, and the repurchase terms on unvested shares.
11. Whether vested equity can be sold in a tender or secondary sale, and any right of first refusal.
12. Any refresh grant policy that applies to this role.

Could you also send the equity plan, the form grant notice, and the award agreement?

Thanks,
[Your name]

If the answers come back weak and you want a comparison offer while you negotiate, Refolk tailors your resume to each new posting from your own history and drafts the cover letter, so applications go out the same week instead of after you have already signed.

Who can answer equity questions at the company?

At a private startup, you will usually get equity answers relayed through a recruiter, not from a dedicated equity specialist. Specialist titles are rare and cluster at public companies, so written answers matter more than who gave them.

In Refolk's index of professional profiles, US employers in the sample include Apple (2), UBS (2), Upwork, and Instructure. UK employers include Tesco (2) and Arm (1). Adding a Director or VP seniority filter to the US query returned zero results. That is probably a tagging artifact, not proof that no senior equity leaders exist, so don't read it as one.

What this means in practice:

• At a public company, you may be able to ask the recruiter to route plan questions to stock plan administration.
• At a private startup, expect the recruiter to relay answers from finance or company counsel. Ask for the answer to be quoted from the plan or agreement, not paraphrased.
• For your own side, an employment lawyer who advises individual employees on option and RSU offers, or a financial planner who works on ISO exercise and pre-IPO RSUs, can read the four documents with you. They work from the same documents this reference lists.

Checking the grant after you start, and keeping this current

The work isn't done when you sign. It's done when the board-approved grant notice matches your amended letter and any 83(b) confirmation is filed. Run the checklist below the week the grant notice arrives.

To keep this reference current for your own use:

• PTEP data: Carta republishes extended-window shares in its private markets data. Before you negotiate, check whether the latest share of terminated options above 90 days has moved from the roughly 20% shown above.
• 83(b) filing: check the IRS Form 15620 page for the current filing channels and any change to the online tool's per-submission cap.
• 409A: re-ask for the valuation date on every new grant, including refreshes. The 12-month safe harbor applies per grant, not per employee.
• RSU terms: read the expiration date in each new grant notice. Don't assume it matches your first grant.

If a grant fails these checks and you decide to keep looking, Refolk scores how well you fit each posting before you apply, so you can spend your time on the roles worth negotiating.