I worked for a company for 1.5yrs & during that time I earned ‘vested share options’ based on my length of service.

The company let me go a month ago & is now ignoring my exercise request for those vested shares. What can I do? These are options I’m entitled to. Yet, I can’t purchase them without my previous company's cooperation.

Do I need to seek legal advice?

  • 2
    "What can I do?" - Stop asking the internet for legal advice and call an attorney. Any answers you get here (or on any other site) are anecdotal at best. You need real, honest to goodness legal counsel.
    – joeqwerty
    Aug 22, 2022 at 0:41
  • Check your contract. Usually you have to stay longer until you get share options, even if they are "vested".
    – gnasher729
    Aug 22, 2022 at 17:37
  • Checked all paperwork & have an account set up specifically for the shareholdings, confirmed they are based on length of service & I do have vested options I can purchase. Went through all this when exercising the stock options. The issue is that I'm not getting any response from my previous company in relation to my exercise request, after 5 days they should have reached out to offer a method of payment for me...it's been nearly a month & that is also half way from their 2 month 'use it or lose it' policy...which is ultimately my concern here. Aug 23, 2022 at 19:16
  • @joeqwerty I never asked for legal advice on the internet, sir. I asked if it was a situation folks felt warranted some legal advice. As I'm sure you'll know, that type of advice might be printed on paper but it does not grow on trees. Try not to be so condescending when giving out your own advice, the answers I received here were actually helpful. Thanks for your input. Aug 23, 2022 at 19:36
  • Upon contacting the companies CFO I have been informed they are revising their '409a' price which will ultimately benefit me whilst exercising now. They will reach out to me once the FMV is updated so I can proceed accordingly. Aug 24, 2022 at 15:55

3 Answers 3

  1. Find and read your paperwork. Somehow the fact that you are part of a stock arrangement must have been communicated to you.
  2. That's often part of your employment contract and offer letter. There is general an document or agreement that spells out the exact rules of the plan. You should have gotten a copy and may have had to sign for it
  3. In many case the employee stock plan is not managed by the company itself but by a third party (Morgan Stanley, Fidelity, etcc.). These management parties handle all the nitty gritty of versting, exercising, keeping track of tax liabilities, etc. If that's the case you should already have account where you can simply log in do initiate all transactions yourself.

Once you have done all of this, you can assess what's happening here: Either the company is following all the rules and you have either misunderstood the plan or are talking to the wrong people OR the company is violating some rules and you have found some evidence that they do.

If the company isn't following the rules or you don't understand the paperwork, you can consider engaging legal help.

  • Thank you, my next step is to reach out to the company's CFO directly to confirm what is going on here. Aug 23, 2022 at 19:17
  • What does your paperwork say ? The discussion with the CFO will be a lot easier if you can point to contracts, e-mails, accounts etc.
    – Hilmar
    Aug 25, 2022 at 5:56
  • Upon contacting the companies CFO I have been informed they are revising their '409a' price which will ultimately benefit me whilst exercising now. They will reach out to me once the FMV is updated so I can proceed accordingly. Aug 26, 2022 at 12:01
  • Personally I wouldn't believe any of this, at least not without a detailed written explanation of rules and timelines. READ YOUR PAPERWORK and follow what it says. Get a lawyer if the company is NOT doing what your paperwork says. Otherwise proceed at your own risk.
    – Hilmar
    Aug 27, 2022 at 13:54

Do I need to seek legal advice?

Yes. Tell the company that you will seek legal advice, and they will hear from your lawyer if they ignore your request.

At the very least, the company should contact you and explain to you the reason they have not allowed you to purchase the shares.

Note: Did the company agree that you can exercise those stock options if you worked for them for only 1.5 years ? Did they allow you to buy these shares under the circumstance that you were let go ?

You may want to read the employment contract to understand everything first, and then talk to a lawyer who can probably help you tremendously in this case.

  • I agree...some form of communication would be ideal & I will be firm with my direct communication to the company CFO. Yes, after 12months I was eligible to purchase the vested options at a fixed price. Yes, the end of my employment has no bearing on the options which are available to be exercised up to 2 months after leaving, I submitted the request well within this timeframe. Thanks Aug 23, 2022 at 19:23
  1. Consult a lawyer

You should also read the paperwork (employment contract, shares certification etc) you have regarding the shares and your entitlement for them.

From what i remember from my brief encounter with this type of situation, as soon as your employment end, so does your entitlement for the shares not yet purchased.

Keep us posted, it is interesting to see how the things would turn out

  • 1
    I will make one final shot at communicating with the companies CFO & if i hear nothing within 7 days I will speak to a legal advisor for sure. Thanks Aug 23, 2022 at 19:24

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