Stock Trading and Other Things

How Do I Take Advantage of Stock Options From My Last Job?

I received stock options at my last job and in July they are supposed to "vest". Problem is, I don;t work there anymore and I am out of contact with them. I have the signed document from the CEO and CFO granting me the publicly traded options, but I just don't know what to do with it now. Obviously, this is my first time with this sort of thing.

Could anyone give me an idea as to what I can/should do with this document?

Public Comments

1. There is often confusion between publicly traded options, which you buy on the secondary market at a price and represent the right to buy shares at a set price until a certain period of time, and options which are granted to employees. It sounds like you have the latter.

Most employee stock options terminate if the employee ceases working prior to the date that the options vest. There are a limited number of exceptions, including if the reason that you no longer work there is that you were fired after a merger or sale of the company and you were not fired for cause and your option plan and option have what is commonly known as a "double trigger."

What I'd do is call your old company and ask to speak to the stock plan administration department and ask whether your options vest even though you no longer work there. Its pretty unlikely though -- I've seen literally hundreds of stock plans in my working career and I've never seen one that allows someone who leaves the company to have their options vest some period after leaving unless its in connection with a change in control or its a specially negotiated package with a high level or important hire. I'm sorry -- I hope I'm wrong and that they do.

If you don't trust your old company, you could also ask a friend of yours who is a corporate lawyer to look at the document.

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2. Generally, if you weren't vested at the time your employment ceased, then you don't have those options - you lose them. So I'm puzzled by the information you gave concerning public options - did they convert them for you?

If you have options to buy stock, you can either exercise the option (in which case you first have to find the money to pay for the stock at the option price) or you can just let them run out - in which case, they cost you nothing.

In the case of employee stock options, most companies have an arrangement where you can sell sufficient stock to cover the price of purchasing the whole option - this allows you without using any cash walk away with some of the shares, if you want to hold them longer.