Alisa J. Baker
You may find a gap between what you expect from your equity compensation and what you receive. Often the problem stems from the complexity of the related documents and rules. Learn about them, and understand why you must focus on conflicting or inconsistent provisions.
Richard Friedman
UPDATED! Get a sense of what you should, and should not, expect in the terms of your stock option grant. This survey of 300 companies in 2007 looks at trends in vesting schedules, post-termination exercise rules, and other plan features (includes some details on restricted stock grants).
Kathleen Pender
San Francisco Chronicle
Companies are not required to tell departing employees how many vested options they have and how long they have to exercise them. Along with rules for your other employee benefits, you need to know post-termination option-exercise rules.
Sandra Block
USA Today
Whatever route you choose when you're laid off, some tasks can't wait, such as developing a strategy to exercise your stock options.
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If your option was granted with a graded vesting schedule, you are allowed to exercise the vested portion of the option grant, but most commonly you forfeit the remainder...
Yes. You forfeit whatever stock has not vested...
No law requires this. It is your obligation to know your...
Most companies' stock plans focus on the date of termination, meaning the actual...
No law gives you special rights in your stock options. Under most stock option plans and grant agreements, an employee whose termination stems from unfavorable economic conditions generally has...
Generally, yes, assuming this termination is made for good-faith reasons, such as business downsizing. Most employees are "at will," which means...
Former employees' transactions, regardless of the reason for termination, follow the same withholding and reporting requirements that apply to...
Former employees' transactions, regardless of the reason for termination, follow the same withholding and reporting requirements that apply to...
You can try for it. Companies occasionally do this for all employees in special situations. But...
The period for option exercise depends on both your employer's plan design and the reason for your termination. If the options are not exercised by the specified date, they...
While being rehired is great news, the bad news is that the unvested options were canceled or forfeited when you were laid off, regardless of the reason for termination. As for the vested options...
Usually, you will have time after you leave the company to exercise your options. However, some companies...
Usually the stock plan rules override other agreements made under that...
With approval from the board, and perhaps also shareholders, your company can modify outstanding grants in a way that is consistent with its stock plan. However, it should avoid tax pitfalls for you and the company, such as...
Yes. Stock plans often have different provisions on post-termination exercise periods for vested options, on any acceleration of vesting, and on the treatment of...
In its
2007 Domestic Stock Plan Design & Administration Survey, the National Association of Stock Plan Professionals found that the following treatments of options at termination are prevalent...
Not usually. The post-termination exercise period starts when you...
Not unilaterally. Although no specific law exists on this question, courts have examined this situation and provided some guidance...
Dividends and the shareholder voting rights that go with restricted stock do not...
You could mistakenly let the options expire without exercising them. You do not have your vested options for life...
Yes. Under the Internal Revenue Code, you must exercise an ISO within...
For ISO purposes, a
bona fide leave of absence greater than three months can constitute a termination of employment if...
The Internal Revenue Code is very clear on the requirements of favorable tax treatment for ISOs. Among other conditions...
You will continue to own stock purchased during your employment, but your eligibility for participation in the plan ends. Any funds withheld from your salary will be...
The rules do not apply only to trades in your company stock while you are working for the company...
The Section 16 rules, including the requirements of Form 4, apply for up to six months after...
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