What happens to my stock options if Im fired? Are stock option losses recoverable in a wrongful dismissal action?
The answer to this question depends on the particular details of your employment agreement, the Stock Option Plan under which your options were issued, and the terms of the Stock Option Grant. The overall governing principle is that after a wrongful termination, you have a claim for damages for breach of contract, and the court should grant damages, in a lump sum, to compensate you fully. Full compensation means the lump sum should be enough to put you in the same position you would have been if you had been given working notice. During a working notice period, you would continue to have options vest, and you would have had a longer period of time to exercise options. Usually, but not always, Stock Option Plans state that employee stock options cease vesting on the date of actual (even wrongful dismissal) termination of employment, and the fired employee has a short period (usually 30 days) to exercise. The employee loses the ability to have additional options vest and to wait to exerc
