[Please refer to the sample plan document XYZ Corporation Stock Incentive Plan and related documents in your CEP binder to answer this question.] An employee leaves XYZ Corporation to take a new job. She holds vested and unvested NSOs under the company's Stock Incentive Plan. What happens to those options?
A. All options are canceled as of her termination date.
B. Vesting ceases as of her termination date. Unvested options are cancelled, but she can exercise her vested options for three months after termination.
C. All options continue to vest and to be exercisable for three months after termination.
D. Vesting ceases after three months, then unvested options are cancelled, but she can exercise her vested options until their original expiration date.
Answer:B
[Please refer to the sample plan document XYZ Corporation Stock Incentive Plan and related documents in your CEP binder to answer this question.] An employee leaves XYZ Corporation to take a new job. She holds vested and unvested NSOs under the company's Stock Incentive Plan. What happens to those options?
A. All options are canceled as of her termination date. B. Vesting ceases as of her termination date. Unvested options are cancelled, but she can exercise her vested options for three months after termination. C. All options continue to vest and to be exercisable for three months after termination. D. Vesting ceases after three months, then unvested options are cancelled, but she can exercise her vested options until their original expiration date.
Explanation: The XYZ Corporation Stock Incentive Plan specifies that the vesting of stock options ceases upon termination, but that vested options can be exercised for three months following termination.