# Understand stock option plans

> Understand pools, offers, participants, vesting, and exercises.

- Category: Stock option plans
- Type: concept
- Audience: All users
- Last reviewed: 2026-08-25
- Canonical HTML: https://tekorax.com/help/stock-options/option-plan-basics/
- Content version: c1a866eed3295e45

## What a Stock Option Plan represents

Eqdeal connects the approved option capacity, common offer terms, each participant’s position, vesting events, and the resulting equity records. Keeping those layers separate prevents a vested option from being mistaken for an issued share.

## How the plan is organized

- **Pool** — the approved option capacity reserved for one plan or program, including its dilution treatment.
- **Offer** — a reusable set of economic and vesting terms applied to one or more participants.
- **Participant** — the identified beneficiary and quantity governed by the offer.
- **Vesting event** — the schedule or condition through which a quantity becomes eligible under the plan.
- **Exercise** — the controlled action on eligible vested options under the applicable price, dates, and approvals.

## Read the quantities correctly

Pool capacity, offered options, vested options, exercised options, and remaining availability answer different questions. Reconcile all five before approving a new grant or reporting plan dilution.

**Options are not automatically issued shares**

An option can be offered or vested without becoming issued equity. Review the participant status, exercise conditions, resulting reserve or share position, and issuance history separately.

## Before configuring a plan

- Confirm the approved pool size and eligible share class.
- Confirm how allocated and unallocated capacity affects dilution.
- Record the vesting policy, cliff, duration, and goal conditions from approved sources.
- Separate exercise price from any premium or additional economic term.
- Define pause, acceleration, termination, transfer, and exercise treatment.

## Recommended working order

1. Create and verify the pool.
2. Create the offer terms.
3. Add and verify participants.
4. Review the generated schedules and total allocation.
5. Record lifecycle events only from approved evidence.
6. Reconcile exercised positions with the cap table.