"options are incentives for employees, those shares are already set aside from the outstanding shares at whatever price was the agreement...."

Yes. These shares have been set aside in the company's treasury until the employee or officer decides to exercise their option. When they are set aside, no cash is received; but when the employee exercise the option, he or she has to pay for the shares at the exercise price and the money goes to the company. The employee or officer does not receive these shares for free!