A “Sample Letter to Former Employee Re Stock Options” is a formal way to communicate about their stock options. It is used when an employee leaves a company. Companies use it to explain what happens to their stock options after they leave.
This article simplifies the process. We will share useful letter templates and examples. These samples help you write clear and effective letters.
Our goal is simple. We want to make writing this kind of letter easy. Use our resources to craft the perfect letter.
Sample Letter To Former Employee Re Stock Options
[Your Company Letterhead]
[Date]
[Employee Name]
[Employee Address]
Subject: Stock Options Information
Dear [Employee Name],
This letter is to inform you about the status of your stock options with [Company Name] following your departure on [Date of Departure].
According to our records, you were granted stock options to purchase [Number] shares of [Company Name] common stock under the [Name of Stock Option Plan].
Please review the terms and conditions outlined in your original stock option agreement, including the vesting schedule and exercise period. Your options typically remain exercisable for a period of [Number] months/days following your termination date, which would be until [Date]. After this date, any unexercised options will expire.
To exercise your options, you will need to complete the necessary exercise forms and submit them to [Contact Person/Department] at [Email Address or Physical Address]. You will also be responsible for remitting the exercise price per share, which is [Exercise Price], plus any applicable taxes.
We recommend that you consult with a financial advisor and tax professional to understand the implications of exercising your stock options.
If you have any questions or require further clarification, please do not hesitate to contact [Contact Person/Department] at [Phone Number] or [Email Address].
Sincerely,
[Your Name]
How to Write Sample Letter To Former Employee Re Stock Options
Subject Line: The Siren Call of Clarity
- Keep it concise and unambiguous. “Stock Option Information” or “Details Regarding Your Stock Options” works swimmingly.
- Evade ambiguity. A meandering subject line is anathema to clarity.
Salutation: A Formal Overture
- Address the former employee by name, employing “Dear [Former Employee’s Name],”
- Avoid overly casual greetings. Retain a professional decorum.
Introduction: Setting the Stage
- Acknowledge their past tenure with the company. A brief, felicitous nod suffices.
- State the letter’s purpose upfront. “This letter elucidates your outstanding stock options.”
Body Paragraph 1: Laying Out the Specifics
- Detail the number of stock options vested and unvested. Precision is paramount.
- Specify the grant date, strike price, and expiration date for each option. No room for equivocation.
- Clearly articulate the vesting schedule, if applicable. Transparency is key.
Body Paragraph 2: Explication of Exercising Options
- Explain how the former employee can exercise their stock options. Provide step-by-step instructions.
- Include any relevant forms or documentation they may need. Make it turnkey.
- Mention any associated fees or taxes. Forewarned is forearmed.
Body Paragraph 3: The Looming Deadline
- Emphasize the deadline for exercising the options. Highlight its importance.
- Clarify what happens if the options are not exercised by the expiration date. Spell out the consequences.
Closing: A Courteous Farewell
- Offer a point of contact for questions. Provide a name, phone number, and email address.
- End with a professional sign-off, such as “Sincerely” or “Best regards,” followed by your name and title.
- Maintain a tone of helpfulness and accessibility. Leave the door ajar for further clarification.
Frequently Asked Questions: Stock Options for Former Employees
This section provides answers to common questions regarding stock options after an employee leaves the company. It aims to clarify the process and implications for both the former employee and the organization.
What happens to my stock options when I leave the company?
Upon leaving the company, your stock options are subject to the terms outlined in your stock option agreement. Typically, you will have a limited time to exercise your vested options; unvested options are usually forfeited.
How do I know which of my stock options are vested?
Your stock option agreement, along with records maintained by the company or its stock administrator, will specify which options are vested and the vesting schedule.
What is the deadline to exercise my vested stock options after leaving the company?
The deadline to exercise vested stock options is usually specified in your stock option agreement. It is commonly 90 days from your last day of employment but can vary.
What happens if I don’t exercise my stock options before the deadline?
If you do not exercise your vested stock options before the specified deadline, they will expire and you will lose the right to purchase the shares.
Who can I contact if I have questions about my stock options?
You should contact the company’s stock administrator or human resources department for any questions or clarifications regarding your stock options after your employment ends.
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