I have some stock options from my (nonpublic) company. Those options are in the money now. My company tolds me that those options will be forfeited, if I leave my job. Is that true? The company don’t need to buy back the ITM options?
look in the option agreements you signed when they issued them to you. that should tell you. i would imagine they would vest at some time though, so maybe you wouldn’t forfeit them all.
It’s true - that’s a problem with vesting in employee stock options. If you aren’t vested, they keep them when you leave.
Thanks for reply. I am vested those stock options and the problem is that the agreement does not mention this situation at all. What can I do to ask the company to buy back?
so you’re saying that you are vested and they are saying you forfeit them anyway? if that’s the case, again, i’d say look at the agreement. it might say something about when you forfeit options. if its silent, i’d ask hr *why* you forfeit them if their vested.
If you’re vested you don’t forfeit them…
Last quarter meeting, the company owner said that the share of company is about 8.50, which is higher than my strike price 6.00. But, HR told me that there is no market to exercise the options, because we haven’t public yet.
I think your HR is wrong. You don’t need a market to exercise the option. When you exercise the option, you pay your company $6 cash per option in exchange for one company stock. Another thing is even if company says each share is about $8.5, it is just a rough guess. There is no public market, so you can’t be sure at all.
HR is absolutely wrong - the company is obligated to sell you shares of the company for $6.00 if you are vested in the options. Whether or not it’s worth $6.00/share is another matter… Edit: So I know this guy who had stock (not options) in a hedge fund. He left the hedge fund and some guy called him and told him he should forfeit the stock because the company wasn’t public and it wasn’t worth anything anyway blah blah. He told them to get bent, held on, and when the fund was bought by a major bank a few years later he was $350K richer…
Another thing about options is that they usually have a expiry date. If you believe the BS from HR and don’t exercise it b4 expiry date, then you are as good as forfeiting the options…
Another thing about options is that they usually have a expiry date. If you believe the BS from HR and don’t exercise it b4 expiry date, then you are as good as forfeiting the options…
It seems that I can ask to exercise my options and become the stock holder and quit my job? So, I can wait for the company be public. Then, the risk is the company goes to bankruptcy. Now, the challenge is how can I ask the HR to allow me to exercise the options.
i’ve tried to say it before, but you need to look at the agreement. it will probably tell you exactly how to exercise your options, when you can exercise your options, and even whether or not you can even hold onto the shares if you leave the company. i’ve seen some agreements that force you to sell the shares back in the event you leave. maybe the question is whether or not you have a copy of the agreement. if not, i’d suggest you obtain one.
^ That’s certainly right. Maybe it’s not even you that should look at the agreement, but your lawyer.