A Stock Option Plan is a program that allows employees to purchase shares of their company's stock at a predetermined price, known as the exercise price. This plan is often used as an incentive to attract and retain talent, aligning employees' interests with the company's performance. When the company's stock price rises above the exercise price, employees can buy shares at a lower cost, potentially benefiting from the difference. Typically, these options come with a vesting schedule, meaning employees must work for a certain period before they can exercise their options. This encourages long-term commitment and helps ensure that employees are invested in the company's success.