8/27/2014 When laid off, can I get my unvested options vested?

| Sklover Working Wisdom

http://skloverworkingwisdom.com/blog/when-laid-off-can-i-get-my-unvested-options-vested/ 1/12
Blog When laid off, can I
get my unvested options
vested?
When laid off, can I get my unvested options
vested?
Published on January 5th, 2013 by Alan Sklover
Question: Hi, Alan. I am currently employed by a large tech company and I have received equity compensation
throughout my tenure. Some of this equity has yet to vest.
I have recently been informed that my position is being eliminated and I have been encouraged to find a new
position, either in or out of the company. I have identified a position in a different industry and, if I do not find
another position in my company, I will likely take the position in the new company.
Should I approach my current employer and try to get my unvested options vested? Can you suggest a strategy
to do this? Thanks.
Lori
Merrick, New York
Answer: Dear Lori: Sorry to hear of your impending job elimination. Your positive attitude is good to see, and
will surely help in your upcoming transition, whatever it may entail. Im glad youve written in. Here are my best
thoughts:
1. First, are you certain that you will lose your unvested options if you depart the company? I say this
because I have found that many of my clients have wrongly presumed that unvested options are simply lost upon
termination of employment. Whether or not you lose your unvested options at this time should be clearly set forth
in your employers Stock Option Plan. Request a copy of that Plan from your Human Resources representative,
and read it over carefully. Be aware that many companies change their Stock Option Plans periodically, and so
you may have more than one Stock Option Plan applicable to your options that might require review.
2. My experience is that a great many equity plans provide for continued vesting so long as the
employee is terminated without cause, and the employee does not compete directly or share
confidential information. By equity I refer to stock, stock options and other securities of a company. Over
the decades I have reviewed many, many employee participation equity plans, and have found many of them to
provide for continued vesting of stock options where (a) the employee is terminated without cause, (b) the
former employee does not go to work for a direct competitor, and (c) the former employee does not engage in
any other misconduct, such as sharing or using the former employers confidential information. Some Plans, but
only a few, provide for accelerated vesting in the event of a termination without cause. (By accelerated I
Home Model Letters Videos Earn $$ Speak with Alan Inquiries
8/27/2014 When laid off, can I get my unvested options vested? | Sklover Working Wisdom
http://skloverworkingwisdom.com/blog/when-laid-off-can-i-get-my-unvested-options-vested/ 2/12
mean all vesting takes place now, at one time, and not over an extended period of time.) Look for these things,
especially, when you review your stock option plan(s).
While most stock option plans contain an awful lot of legal mumbo-jumbo language, I think you can probably
review your employers Stock Option Plan by yourself looking for what happens upon a termination without
cause, without having to pay an attorney to do so for you.
3. It is also likely that your employer has a Severance Plan most large employers do which might,
on its own, provide for continued or accelerated vesting of your unvested stock options. At large
employers, it is most common indeed, almost universal to provide some kind of severance to employees who
are laid off, restructured or downsized due to no fault of their own. A severance agreement provides for (a) the
employer to get certain advantages it seeks but does not legally deserve, including the employers waiver of
claims, and an agreement to keep confidential matters secret, and for (b) the employee to get certain payments
and/or benefits, as well, including continued salary and continued health insurance. You may find that your
employers Severance Plan provides for continued or accelerated vesting of your stock options if you read the
Severance Plan, or what is commonly called the Summary Plan Description, or SPD for short.
While most severance plans also contain an awful lot of legal mumbo-jumbo language, I think you can
probably review your employers Severance Plan by yourself looking for what happens to your unvested options
upon a termination without cause, without having to pay an attorney to do so for you.
4. If your Stock Option Plan provides for loss of unvested stock options upon termination, and your
Severance Plan does not say differently, then you have nothing to lose, and everything to gain, by
requesting vesting either over time or accelerated now of your unvested stock options. I believe
strongly that a departing employee and especially a departing employee who has been terminated without
cause is unwise, perhaps even foolish, not to request that unvested equity whether stock, stock options, or
other forms of equity be vested immediately or over time. As I often say to clients who are reluctant to ask for
vesting, If you dont want to request the vesting of those stock options, then simply have your employer send
them to me.
And as I also often say, There is generally no downside to any request that incorporate the Three Magic Rs,
that is, (a) is presented with Respectful, (b) is Reasonable in amount or degree of request, and (c) is
accompanied by a solid and convincing Rationale. So long as these three Rs are incorporated into your
request, then I would not expect any kind of downside to making the request.
5. The best Rationale to accompany your request for vesting of unvested stock options upon
termination without cause is that loss of what you earned in the past is simply Punishment for No
Crime. By punishment for no crime I mean that you are having something taken away from you, that you
earned, without any good reason. It seems so odd, and out of place, to hurt a departing employee in the
pocketbook when he or she least deserves it and most needs it. Such a request can be made either before
termination takes place, or during the process of your severance negotiations. It should not be directed to anyone
in Human Resources, but instead to a senior executive who knows you, who can intervene on your behalf, if he
or she is motivated by your request to do so.
6. If you have any valid and credible claim against your employer just as examples, that you were
chosen for position elimination because of your age, gender or race then when you raise that in
severance negotiation this is the remedy you might consider requesting as a resolution. In the
8/27/2014 When laid off, can I get my unvested options vested? | Sklover Working Wisdom
http://skloverworkingwisdom.com/blog/when-laid-off-can-i-get-my-unvested-options-vested/ 3/12
previous section, above, I mentioned the Punishment for No Crime rationale, which is really an appeal for
fairness, as well as a mention of need. While they are both good rationales for any request, a stronger
rationale is I have a legal claim; can we resolve by vesting, instead of heading to Court? Is this threatening a
lawsuit? Some would say so. I would not say so: I would say it is simply resolving all matters, including waiving
claims, when ending a relationship, which is precisely what is supposed to happen in the severance process.
By the way, other claims you might raise at this time could be for non-payment of this past years bonus (either
full year or partial year), or unfulfilled past promises to you or either raises or promotions, or both.
For more information about severance negotiating at time of termination, see our Blogsite Resource Center
Section on Severance Negotiating.
Remember, though, that if you resign to take a different job for another employer before you are officially
terminated then you will not be entitled to any severance whatsoever.
7. In case you hear We cant do that; the Plan does not allow it, dont forget the Doctrine of
Financial Equivalents. What the heck is that? you might be asking. It is simply this: while the employer may
be prevented from vesting your unvested stock options (at this time or in the future) by the terms of its Stock
Option Plan, nothing in the world prevents your employer from paying you a sum of money that approximates the
value of what you are now losing. That is, the financial equivalent of the lost equity. There is no rule against
that, and is a rationale that often overcomes the we cant do that defense when raised by Human Resources
representatives.
8. With these things in mind, I hope you will seriously consider making a request for your unvested
options to be vested (immediately or over time), or that you be paid for the value of what you are
losing. Its hard enough to make a living, and even more difficult to attain a position and do good work such that
you are awarded stock options. It would be a shame to now lose what you worked so hard to attain. This is the
time to make this request, not years later when you will probably wish you did. I dont really have a vote in
this, but if I did Id surely say Go for it.
If you would like to obtain a model letter to assist you in making a request that your unvested options be vested,
simply [click here].
Lori, thanks for writing in. Good luck in relocating yourself in a position that provides support for you and your
family, as well as purpose and meaning in your life. Have faith that you will, and, I am certain, that you will.
My best to you,
Al Sklover
P.S.: One of our most popular Ideal Packages of forms, letters and checklists is entitled Ultimate Severance
Package consisting of four Model Letters/Memos for severance negotiation, as well as our 94-Point
Severance Negotiation Checklist. To obtain a complete set, just [ click here. ]
2012 Alan L. Sklover, All Rights Reserved.
This entry was posted on Saturday, January 5th, 2013 at 2:21 pm You can follow any responses to this entry
8/27/2014 When laid off, can I get my unvested options vested? | Sklover Working Wisdom
http://skloverworkingwisdom.com/blog/when-laid-off-can-i-get-my-unvested-options-vested/ 4/12
through the RSS 2.0 feed. You can post a comment, Share this article with a friend, print this page or trackback
from your own site.
Visit the E-Newsletter Library
Send this article to a friend
Recycle: Reduce Waste. Print only when necessary.
Profile
Sign in with Twitter Sign in with Facebook
or
Name
Email Not published
Website
Comment
Post It
Alan L. Sklover
Employment Attorney
and Career Strategist
for over 30 years
Job Security and Career Success now depend on knowing how to navigate and negotiate to gain the most for
your skills, time and efforts. Learn the trade secrets and 'uncommon common sense' of Attorney Alan L.
Sklover, the leading authority on "Negotiating for Yourself at Work".
Ask Alan a Question - It's Free!
8/27/2014 When laid off, can I get my unvested options vested? | Sklover Working Wisdom
http://skloverworkingwisdom.com/blog/when-laid-off-can-i-get-my-unvested-options-vested/ 5/12
Recommend Our Blog to Friends - It's Free!
Subscribe to Our Blog - It's Free!
Enter your email address below
Subscribe
We will never sell or rent your email address.
Using FeedBurner? Subscribe to our FeedBurner address.
Send this article to a friend
Connect With Us

Your Needs Our Help
1. Sklovers Private Library - Free Info, Below
2. Model Letters/Memos - Take Smart Action
3. Checklists/Agreements - Dont Miss a Thing
4. Consult by Phone - Get Guidance by Phone
[30-, 60-, or 120-minutes, 7/24]
5. Videos On Demand - "Sit Back and Relax"
6. Legal Representation - When Necessary
7. Become a Sales Affiliate - Earn Commissions
Get the Model Letter, Memo or Checklist You Need
They work!
[ Search by Category ]
8/27/2014 When laid off, can I get my unvested options vested? | Sklover Working Wisdom
http://skloverworkingwisdom.com/blog/when-laid-off-can-i-get-my-unvested-options-vested/ 6/12
or
Use a Word Search
In Your Hand BY EMAIL Instantly
Sklovers PRIVATE LIBRARY Secrets Available Only Here . . .
"Everything Your Employer
Does NOT Want You to Know."
Use Category List or Word Search
WORD SEARCH to Locate Your Concern
1. Intro to Sklover Working Wisdom
1. Employment Info and Insight
2. Key Words & Phrases New!!
3. Negotiation Pointers
4. Job Security
5. Inspiration, Encouragement, Motivation
6. About Human Resources
2. Building the Employment Relation
7. Interviews, Recruiters & Resumes
8. Job Offers and Offer Letters
9. "At Will" Employment
10. Salary, Bonus, Compensation
11. Stock, Stock Options, "Equity"
12. Benefits, Perq's and Retirement
13. Agreements and Contracts
14. For Those Under 25
15. Raises and Promotions
3. Legal Rights & Protections
16. Discrimination and Harassment
17. FMLA and COBRA
18. Disability and Pregnancy
19. Overtime, Commissions, Unpaid Wages
20. Ownership of Creations New!!
21. Parenting & Working Rights & Wrongs
8/27/2014 When laid off, can I get my unvested options vested? | Sklover Working Wisdom
http://skloverworkingwisdom.com/blog/when-laid-off-can-i-get-my-unvested-options-vested/ 7/12
21. Parenting & Working Rights & Wrongs
4. Issues that Arise at Work
22. Performance Improvement Plans and Reviews
23. Retaliation and Whistleblowing
24. Non-Competes & Other Restrictions
25. Trade Secrets and Confidentiality New!!
26. Defamation and Disparagement
27. Expatriation and Relocation
28. Conflicts of Interest
29. Misconduct and Bad Behavior New!!
5. Workplace Disputes
30. Privacy and Publicity New!!
31. Reputation Repair
32. Bullying, Hostility & Violence New!!
33. Resolving Disputes
34. Arbitration and Mediation
35. Dealing with Attorneys
36. Collecting Money You Are Owed
6. Leaving and Losing Your Job
37. Resigning from Your Job
38. Involuntary Resignation
39. Fired, Downsized or Laid Off
40. Severance Negotiating
41. Repayment Obligations
42. Retention Bonuses and Agreements
7. Next Steps
43. Why Did You Leave? Your Response
44. References and Recommendations
45. Unemployment Benefits
46. Going Out on Your Own
47. Independent ContractorsNew!!
48. Sklover Career Strategies
49. Test Your Employment-Negotiating IQ
50. The Future of Work New!!
51. Private Equity Employment New!!
Free Mobile App
Android
8/27/2014 When laid off, can I get my unvested options vested? | Sklover Working Wisdom
http://skloverworkingwisdom.com/blog/when-laid-off-can-i-get-my-unvested-options-vested/ 8/12
Always
There
For You
iPhone
Windows
Just In
Case You
Need It
Coming Soon!
Become a Sklover Affiliate
Help Others and Help Yourself
Receive Real Income for Recommending Our
Model Letters, Memos, Checklists to Your Friends, Family and Colleagues
Click Here
Help Us Repair the World . . .
One Empowered and Productive
Employee at a Time
Sales Affiliates: 16
On Demand Videos: 16
Countries Visiting: 218
Year over Year Growth: Up 40.8%
Daily RSS Subscribers: Over 1,290
Monthly Subscribers: Over 10,300
Visitors to Date: Over 1,153,905
Words of Wisdom: More Than 939,850
Target Audience: 4+ Billion Employees
8/27/2014 When laid off, can I get my unvested options vested? | Sklover Working Wisdom
http://skloverworkingwisdom.com/blog/when-laid-off-can-i-get-my-unvested-options-vested/ 9/12
[Source: Google Analytics; Updated 8.11.14]
NOW AVAILABLE
ON TABLETS!!!
Ipad - Nook - Kindle
To purchase to your tablet [ click here ]
To purchase to print on your printer
[ click here ]
Sklover Videos On Demand
No time to Read? Want Just Basics?
Just
Watch
and
Listen!
Watch for 24 hours.
Great for Mobile Viewing
[ Click Here ]
Appreciate our Blogging Efforts?
Here's a simple way to say "Thanks!"
8/27/2014 When laid off, can I get my unvested options vested? | Sklover Working Wisdom
http://skloverworkingwisdom.com/blog/when-laid-off-can-i-get-my-unvested-options-vested/ 10/12
[Click Here]
More Positive Feedback
"Hello, Alan Sklover! You have changed my life in ways neither you nor I could imagine. Three years ago, after becoming
familiar with your blog, I called your office for a telephone consultation. I was being bullied by a new supervisor. He was
threatening to place me on a Performance Improvement Plan after 9 years of stellar reviews and 3 promotions. It left me
feeling emotionally wiped out, as I was anxious, not sleeping and not eating." "Not only did you help me in a legal and
negotiating sense to obtain a severance double what the company was offering, you counseled me to focus on the important
things in life: my health and my family. I began taking better care of myself, bought an RV, and have been traveling the
country intermittently with my family between consulting projects. The bonding and happiness of my family is indescribable,
and while I now make slightly less money, I am more satisfied being out of the rat race." "I have told other friends about your
blogsite, and hope you can help them as much as you have helped me."
Thank you,
Danielle
Towson, Maryland
New!!
Alan Sklover's
Other Classic
Instantly Downloadable - Day or Night
[ click here ]
Need Legal Consultation, Services or Representation?
[Click Here]
Feedback Invited
Don't worry...We don't bite
8/27/2014 When laid off, can I get my unvested options vested? | Sklover Working Wisdom
http://skloverworkingwisdom.com/blog/when-laid-off-can-i-get-my-unvested-options-vested/ 11/12
[Click Here]
Become Part of What We Are Doing...
Participate and Contribute
to Our Blog
There are Several Ways -
Here's How
Coming Soon!!
Sklover's MentorMatch.com
Would you like to have an Executive Mentor who is:
Experienced in Your Industry or Field,
Insightful in Career Moves and Transitions,
Willing to Counsel You on an Ongoing Basis,
Or Dedicated to Helping Your Son or Daughter?
We are soon to offer Executive Mentor services
By Executive Mentors we know and trust.
8/27/2014 When laid off, can I get my unvested options vested? | Sklover Working Wisdom
http://skloverworkingwisdom.com/blog/when-laid-off-can-i-get-my-unvested-options-vested/ 12/12
Newsletter (126) West Virginia (6) Equity (37) New Jersey (30) Workers Compensation (14) More >>
Repairing the World,
One Empowered and Productive Employee at a Time
2014 Alan L. Sklover Commercial Use Prohibited.
Please note that nothing expressed above constitutes legal advice, and
that Mr. Sklover is licensed only in New York State
(Attorney Advertisement)