3 ms·

It is detailed in the Employee Stock Plan. I believe it is often the share price on the date of grant (yes, when you started; yes, it is a good deal for the com

It is detailed in the Employee Stock Plan. I believe it is often the share price on the date of grant (yes, when you started; yes, it is a good deal for the company). Nobody reads the Employee Stock Plan however, and companies can behave pretty poorly (but legally) as a result. For the curious, you will commonly see such onerous terms in YC startups: https://www.clerky.com/yc-stock-plan-forms https://www.clerky.com/yc-stock-plan-forms

xiaolingxiao 7y ago
hmm... so just to be absolutely clear: employees who purchased shares before the excercise date will actually lose money if the company forcefully repurchase it back
- munk-a 7y ago
  There are some terminology confusions here possibly. Usually options have three associated dates: grant, vest and exercise. The grant date is when stock options are granted to an employee - this is usually the first time the employee will have heard of their access to the options but if they are fore-warned of the options before a formal grant and schedule is release then they may be ineligible for any immediate vesting (generally immediate vesting triggers must happen after the grant date). The vesting date is when an option becomes eligible to exercise - on that date the grantee receives the ability to purchase shares in the company according to the strike price laid out in the options grant. Lastly you have the exercise date, that's the date on which you actually exchange some cash for some real shares in the company - after this point those shares are you personal property and are fully owned by you with no obligations to sale (though obligations around the manner of sale usually remain) - a company could declare bankruptcy but you can retain those shares forever. Just as a note - I'm not a lawyer or an accountant, none of the information above should be construed as financial or legal advice and might just be wrong... if you're actually dealing with an options grant speak to a lawyer.
- bweitzman 7y ago
  From the Clerky docs: > The company shall ... for a period of three months from such date to repurchase all or any portion of the Unvested Shares (as defined below) held by Purchaser as of the Termination Date at the original purchase price per Share (adjusted for any stock splits, stock dividends and the like) You wouldn't lose any money, they'd basically reverse the early exercise.

xiaolingxiao 7y ago

hmm... so just to be absolutely clear: employees who purchased shares before the excercise date will actually lose money if the company forcefully repurchase it back

munk-a 7y ago
There are some terminology confusions here possibly. Usually options have three associated dates: grant, vest and exercise. The grant date is when stock options are granted to an employee - this is usually the first time the employee will have heard of their access to the options but if they are fore-warned of the options before a formal grant and schedule is release then they may be ineligible for any immediate vesting (generally immediate vesting triggers must happen after the grant date). The vesting date is when an option becomes eligible to exercise - on that date the grantee receives the ability to purchase shares in the company according to the strike price laid out in the options grant. Lastly you have the exercise date, that's the date on which you actually exchange some cash for some real shares in the company - after this point those shares are you personal property and are fully owned by you with no obligations to sale (though obligations around the manner of sale usually remain) - a company could declare bankruptcy but you can retain those shares forever. Just as a note - I'm not a lawyer or an accountant, none of the information above should be construed as financial or legal advice and might just be wrong... if you're actually dealing with an options grant speak to a lawyer.
bweitzman 7y ago
From the Clerky docs: > The company shall ... for a period of three months from such date to repurchase all or any portion of the Unvested Shares (as defined below) held by Purchaser as of the Termination Date at the original purchase price per Share (adjusted for any stock splits, stock dividends and the like) You wouldn't lose any money, they'd basically reverse the early exercise.