[kentonv]

Weird, what is the reason to do that instead of restricted stock? It sounds functionally identical except more complicated and with possibly worse tax implications.

I'm sure there's some silly accounting reason having to do with option pools and cap tables.

[jalonso510]

Well since it's an option, the recipient has the choice to either exercise or not exercise, and they can early exercise at any time they'd like, not just on day one, so it's more flexible for the recipient.

On a restricted stock grant, the recipient has to either pay for the shares on day one, or the company gives them to the recipient for free and the recipient incurs a tax liability for the value of the stock on day one.