You are an executive or senior employee who has just received a verbal or written job offer.Perhaps the company is an emerging technology company, possibly venture capital-funded. Whether you are coming from a similar company, or a large, more traditional employer, the Offer Letter may come as a bit of a let-down. It may be only a few pages long. It may read like a form letter, with your name, title, salary and stock option information filled-in.
This Offer Letter sets forth what you and your family will receive in return for your blood, sweat and tears for the next untold number of years. For stock options, the amount is usually 100 shares. Each option contract has a buyer, called the holder, and a seller, known as the writer. If the option contract is exercised, the writer is responsible for fulfilling the terms of the contract by delivering the shares to the appropriate party.
In the case of a security that cannot be delivered such as an index, the contract is settled in cash. For the holder, the potential loss is limited to the price paid to acquire the option. When an option is not exercised, it expires. No shares change hands and the money spent to purchase the option is lost. For the buyer, the upside is unlimited. The verbal offer has been made and the salary negotiation has ended.
Skipping the written offer can lead to confusion later on. Interv.
Sample option call job option offer put letter