1. If the manager ends his employment relationship with the company, the stock options may expire early, Stock option plans generally have special provisions for this. For example, most companies in the United States stipulate that if a manager voluntarily resigns and terminates his employment relationship with the company, the manager can still exercise the exercisable portion of the stock options held within a certain period of time starting from his last working day. exercise rights. Basically, the period specified by all companies is between one month and one year, with a period of three months being more common. For stock options that are still within the grant period and cannot be exercised, the resigning manager may not exercise the options. If the options have been exercised in advance according to the company's special regulations before leaving the company, the company has the right to repurchase this part of the stock at the exercise price. In Hong Kong, it is generally stipulated that if the recipient (including the manager) is adjudicated for any reason other than death, illness or retirement under the employment contract (such as serious neglect of duty, bankruptcy or insolvency) before the option is fully exercised, Criminal liability) Upon termination of employment, any unexercised options owned by the employee shall be void on the date of termination and may not be exercised under any circumstances.
2. If a manager leaves due to retirement, he can enjoy certain preferential rights. For example, the grant schedule and validity period of all stock options held by him are different. Change and enjoy the same rights as before leaving the company. However, if the stock options are not exercised within a certain period of time after retirement (usually 3 months), they become non-statutory stock options and do not enjoy tax benefits.
3. If a manager is permanently and completely incapacitated in an accident and thus terminates his employment relationship with the company, he can enjoy corresponding preferential rights. If the stock options held by the manager expire before they normally expire, the manager or his or her spouse can freely exercise the exercisable portion at a time of his or her choice. However, if the options are not exercised within a certain period of time (usually 12 months) after leaving the company, the stock options will become non-statutory stock options. In response to this situation, the board of directors has the right, when donating shares or when the manager ends his work due to incapacity, to provide him with the grant schedule to continue to be implemented as if the employee is still working for the company, to grant vesting rights in installments and to accelerate Preferential terms for the speed of award of the award schedule.
4. If the manager dies during his tenure, the stock options can be transferred to the heirs as an inheritance. Different companies have inconsistent regulations regarding the validity period of inherited stock options. Some companies stipulate that before the normal expiration of stock options, heirs can freely choose the exercise time. There are also some company regulations that within 12 months after the death of the manager, the heirs can exercise the rights freely. After 12 months, the stock optionsAutomatically invalid. If a manager dies within 30 days of leaving the company, most companies treat the situation as if the employee died during their tenure. In addition, the board of directors has the authority, when making a gift of stock or when the employee ends employment due to death, to provide the employee with continued vesting schedules, vesting vesting rights in installments, and accelerated vesting schedules as if the employee were still employed by the company. Speed concessions.
When the following circumstances occur to the granting company, the outstanding and unexercised options should be adjusted accordingly. 1. If a merger or acquisition occurs in the company, the grant schedule in the stock option plan may be automatically accelerated so that all stock options can be exercised immediately, or the parent company may take over the stock option plan or convert the stock option plan to a basic Cash incentive plan of equal value. In Hong Kong, once a company is acquired, the company will use all reasonable efforts to cause the acquisition proposal to be submitted to all recipients on the same terms. If the acquisition proposal becomes or is declared unconditional, the recipients may submit the acquisition proposal (or any acquisition proposal) to all recipients. ) before the deadline, fully exercise its options (to the extent that they have not yet been exercised) or exercise the options specified in the notice given by the recipient to the company.
Subject to the above circumstances, the options (to the extent that they have not yet been exercised) expire on the acquisition proposal (or the revised acquisition proposal, as the case may be) automatically invalidated.
