Your original stock option agreement should have a form that you can use to exercise the options. Fill it, attach a check for the exact amount and send it by certified mail. It doesn’t need to be more complicated than that.
Ask HN: My last company is stonewalling on how to exercise shares
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Re: Ask HN: My last company is stonewalling on how to exercise shares
#22Earlier quoted context omitted.
My fear is that the legal advice might make the value of exercising not worth it.
Having a lawyer write a letter shouldn’t cost more than $1000 or so. I guess the shares are worth more than that? The end goal is not to go to court, of course.
Yeah people overestimate the costs of a lawyer to help navigate beaurocracy. $1000 bucks can get you really far.
They also underestimate the cost of trials, which is $100k+ for anything serious due to discovery.
Re: Ask HN: My last company is stonewalling on how to exercise shares
#23The answer to the question 'Is there anything I can do?' in our society is almost always 'You can get a specialized lawyer' Sometimes just writing an email that is obviously written by/with legal counsel speeds things up immensely, in my experience. I'm not qualified to give legal advice, but my life advice is: get legal advice if you can afford it.
My fear is that the legal advice might make the value of exercising not worth it.
Some lawyers will do an initial consult for free. You can talk with them for say thirty minutes to determine if it's worth their bother to take the case.
There are lots of situations where a letter from a lawyer gets results without you needing to do anything more beyond that. If you can afford to pay a lawyer and it won't cost more than the value of the thing you seek, I think a letter from a lawyer is a terrific idea.
Re: Ask HN: My last company is stonewalling on how to exercise shares
#24The answer to the question 'Is there anything I can do?' in our society is almost always 'You can get a specialized lawyer' Sometimes just writing an email that is obviously written by/with legal counsel speeds things up immensely, in my experience. I'm not qualified to give legal advice, but my life advice is: get legal advice if you can afford it.
My fear is that the legal advice might make the value of exercising not worth it.
If it is not worth paying an attorney, it probably isn’t worth doing in the grand scheme of things. Take the money you would spend on exercising the options and invest it elsewhere.
Re: Ask HN: My last company is stonewalling on how to exercise shares
#25Couple of important points I haven't seen mentioned yet.
1 - You should already have an option exercise form that you can fill out to actually exercise these options / notify the company you want to do so. It is important that you fill this out and have it in writing, email/certified mail/whatever, that you sent this in with a request to exercise because of 2.
2 - Depending on your employment agreement and your role, you should find out exactly what your Post-Termination Exercise Window is. This is the time period in which you have, after a certain condition, the ability to exercise your options. If you do not exercise them within this period, in most cases, the options will revert back to the company and you will not have the ability to exercise them in the future. This can often be as short as 30-90 days. While I would try to assume positive intent, you need to make sure they are not trying to wind the clock down against you.
3 - You should also be aware of the cost to exercise the options and the number of options that you have vested at the time you leave. In your grant, there will typically be several components, most importantly the strike price, the number of options and the vesting schedule (typically 4 years with a 1 year cliff). While there is much to work through with your lawyer, in general, Strike Price ($1.00) * # Options Vested (5,000/10,000) = Cost to Exercise ($5,000)
4 - Keep in mind that once exercised, if the shares turn out worthless, you can't get the funds back. The shares can end up worthless for any number of reasons including Investor Preferences, Debt Overhang, or a sale price that is too low. Overall, do your own risk/reward calculation here to make sure its worth the price of admission.
5 - I'd echo the points here in that they may never have had an employee exercise their options previously. Believe it or not, most employees do not exercise when they leave a company, and you may have been the first to do so here.
6 - Finally, document all of this thoroughly. If for whatever reason they are attempting to run out the clock on your Post-Termination Exercise Window, ensuring that you have documented you WANT to exercise them and the company didn't execute on your desire is critical in eventually getting the options.
(IANAL and you should find counsel to work through the specifics with you, this is not legal advice and there are unintended tax consequences that may occur if you don't consult a tax professional - Options are complicated!)