Legal Question in Business Law in Massachusetts
stock options being denied
My company (in MA) was public but went private several years ago. Then they gave us all stock options with a 4 year window to vest in, 25% per year.
When they lay people off they let them optionally buy their vested options and take them with them.
When people quit on their own they have been stating that it is their policy to refuse to allow them to purchase the vested options and take them with them.
Is this refusal legal, or are they required to allow the purchase of vested stock options to happen?
1 Answer from Attorneys
Re: stock options being denied
It depends on what is set forth in the written document creating option rights. It is not unusual for option rights to vest upon a "not for cause" or merger related termination, or for them to be forfeited when the option recipient quits. What the rights of the option holder are under these circumstances cannot be determined without review of the underlying documents.
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