Do successors have any rights to unvested options?
January 18, 2006
Date: Wed, 04 Jan 2006
Assume that options have been issued with a vesting period of four years. The employee dies after one year. Do the successors of the decedent have any rights to the unvested shares?
Thanks in advance,
Date: Mon, 09 Jan 2006
No. Vesting means that conditions must be met in order to have unrestricted ownership of the shares or options. In most cases, this means the options become vested or owned without restriction as the employee meets the “time in service” requirements. When the requirements haven’t been met, the options haven’t been “paid for” with the employee’s required labor.