3 ms·

NSOs – After Leaving Employment

4 points by omfgwtfbbq 5y ago

Clever people of HN, please provide your feedback. I recently left a startup where I was issued NSOs over 2.5 years of working with them. This made up part of my salary. After leaving I have 3 months to purchase the options. Prior to leaving I tried to purchase the options and was told the window was closed, I have followed up again and have received no feedback just yet, I assume the window is still closed. Before leaving i received clarification that the window being closed would not lengthen the period I had to purchase. What can I do if the window is closed through the duration of the 3 months after leaving? Do I have any leg to stand on?

JSeymourATL 5y ago
Do you have any paperwork with specific definition on the terms/conditions of your exercise period? Is it substantially different than what you’ve been told? A compensation and benefits attorney would love this case, for a ‘modest’ fee.
- omfgwtfbbq 5y ago
  It states I must exercise within 3 months of leaving, or before the option expiration date, whichever is sooner. It has a 'no rights to damages' portion which states something along the lines of they will not accept damages claims if options aren't exercised within the time frame even if it is because of the company. Seems really shady to be honest (but probably standard), I am not sure what I can do if nobody responds or the window is closed, they could just ignore me for 3 months. I hope that doesn't happen... but it seems like they are well covered.
toast0 5y ago
This is a trading window that's apparently closed right? Check your employment agreement, stock trading policy and options agreement. I would expect the trading policy to apply to employees only, and may not apply to you after you leave employment. Also, a trading policy probably prohibits buying or selling shares during a closed window, but exercising options for cash (well usually a check) isn't really buying shares. The trading window protects the company from having to investigate (some) insider trading incidents and exercising options with inside information might affect taxes, but wouldn't affect other investors. Your options agreement should indicate how to exercise them; if the amount you think this is worth isn't enough to justify a lawyer, you should follow the exercise instructions and document thoroughly. Something like mailing a check, addressed to the Tresurer, certified return receipt. Then they've got to do something with the check. To be clear, have you left yet?
- omfgwtfbbq 5y ago
  I left mid-August. I have a form that I would need to fill in, but the feedback was the window was closed and I needed to wait - I first inquired mid-July whilst still at the company. This sounds like it doesn't apply to me this now I've left. I don't want to get to this point of being a pain, but it's already been 2 weeks after leaving with no feedback at all (2 chases) and the window is 3 months. I will allow up to 1 month before starting to up the effort even further.

4 points by omfgwtfbbq 5y ago

JSeymourATL 5y ago

Do you have any paperwork with specific definition on the terms/conditions of your exercise period? Is it substantially different than what you’ve been told? A compensation and benefits attorney would love this case, for a ‘modest’ fee.

omfgwtfbbq 5y ago
It states I must exercise within 3 months of leaving, or before the option expiration date, whichever is sooner. It has a 'no rights to damages' portion which states something along the lines of they will not accept damages claims if options aren't exercised within the time frame even if it is because of the company. Seems really shady to be honest (but probably standard), I am not sure what I can do if nobody responds or the window is closed, they could just ignore me for 3 months. I hope that doesn't happen... but it seems like they are well covered.

toast0 5y ago

This is a trading window that's apparently closed right? Check your employment agreement, stock trading policy and options agreement. I would expect the trading policy to apply to employees only, and may not apply to you after you leave employment. Also, a trading policy probably prohibits buying or selling shares during a closed window, but exercising options for cash (well usually a check) isn't really buying shares. The trading window protects the company from having to investigate (some) insider trading incidents and exercising options with inside information might affect taxes, but wouldn't affect other investors. Your options agreement should indicate how to exercise them; if the amount you think this is worth isn't enough to justify a lawyer, you should follow the exercise instructions and document thoroughly. Something like mailing a check, addressed to the Tresurer, certified return receipt. Then they've got to do something with the check. To be clear, have you left yet?

omfgwtfbbq 5y ago
I left mid-August. I have a form that I would need to fill in, but the feedback was the window was closed and I needed to wait - I first inquired mid-July whilst still at the company. This sounds like it doesn't apply to me this now I've left. I don't want to get to this point of being a pain, but it's already been 2 weeks after leaving with no feedback at all (2 chases) and the window is 3 months. I will allow up to 1 month before starting to up the effort even further.