I have been offered a position at a company with a considerable part of compensation under the form of a stock option.
The stock option agreement has a clause which basically says that if I no longer work for the company, the board of directors can invalidate my option's right to be exercised, for the amount of option shares that the agreement grants me until the end of employment (e.g. 1000 more shares / month).
It basically states that my option's validity is at the board's discretion.
My employer, when asked about it, said it's a standard agreement, and has told me that I would get a letter from the Director waiving that clause.
My question is, if the director is ever changed, would that letter still be valid?
1 Answer from Attorneys
Generally speaking, a director acts on behalf of the company and not individually on behalf of him/herself. Furthermore, the director individually does not determine company policy, rather the board as a whole makes such decisions. Therefore, a letter from a director is an official letter from the company. However, it is impossible to predict if the board is going to change their mind in the future this is why a good written agreement is necessary to adress such a situation.
You did not mention the position you are hired for. Under certain circumstances one could negotiate better terms. You should consult with an attorney and have the employment documents properly reviewed.
Feel free to contact my office at your earliest convenience
Roman R. Fichman, Esq.
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