The right to purchase company stock at a specific price over a stated option term. Upon exercise, U.S. participants will recognize ordinary income (W-2) equal to the difference between the fair market value and the grant price on the date of exercise. This income is subject to immediate tax withholding at the point of exercise with any appreciation in value above the exercise price treated as a capital gain. In non-U.S. locations, tax implications may vary; consult your employer or tax advisor.