Legal Question in Family Law in California

Un-vested Stock Options

I am planning to file a divorce from my wife soon. What is the law regarding to the un-vested Stock Options?

I have 24,000 shares of the Stock Options which will be exercisable as follows:

6000 shares to be excercised on 5-14-99

500 shares to be excercised on every month afterward that I'm still employed with my current employer.

Thanks,


Asked on 9/21/99, 4:21 pm

1 Answer from Attorneys

Jed Somit Jed Somit, Attorney at Law

Re: Un-vested Stock Options

There are several approaches to treatment. The most common is

to compare the amount of time from the grant to the vesting for each

vesting. The portion during the marriage and before separation (the date

the spouses stopped living together with no intent to return to live

together as husband and wife) is usually considered community property, and

the remainder the separate property of the employed spouse. However, in

some circumstances it is possible to argue that each succeeding grant was

meant only as a reward for employment the preceding month, so that all vestings

after separation should be treated as separate property.

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Answered on 9/22/99, 11:57 am


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