It states that employees can't receive more than $100,000 worth of exercisable ISOs in a given calendar year. Any amount beyond that will be taxed as if the ISOs are NSOs.
The short answer is yes. However, you have to ensure that your offering is compliant with all the relevant regulations in both your and your contractor's country. In some regions, for instance, your contractor may be eligible to receive non-qualifying stock options, but your contractors in other countries may not.
However, there are some downsides: Options being worthless if the stock value of the company doesn't grow. The possible dilution of other shareholders' equity when option-holders exercise their stock options. Complex tax implications for ISOs, especially the concept of AMT.
Size of the option pool A typical employee stock option pool at pre-seed round is about 12-15%, diluted to 10% at series A. Michael Houck adds that the employee option pool at Launch House sits at 10%. "We have an employee option pool as part of our equity structure. It's 10%, which we recommend to be pretty standard.
N. (also exhibitions policy) a directive governing borrowing, lending, and/or exhibiting archival holdings (View Citations)