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Lesson 16. Frequently Asked Questions > Employee Stock Purchase Plans - Pg. 78

Frequently Asked Questions Tip 78 The Internet may be a resource for learning how other companies in your industry are deal- ing with employee stock options. Question: What happens to my options if I am fired? Answer: More than likely you can kiss them good-bye. Many option grants contain clauses that wipe out any options you have in the event of termination with cause. In other situations, you may have the right to exercise your vested options, but in almost all cases, unvested options will disappear. Some states have strict employer-weighted laws that allow them to fire you for any reason at any time. In these states, you work "at the will" of your employer. Other states may require more of the employer before it terminates you. It is possible for some give-and-take here, but usually employees who are fired don't have much bargaining power. Question: I am a part-time employee. Am I eligible for stock options? Answer: Generally, there is nothing that would prohibit a company from granting you stock options. As a practical matter, most grants are for full-time employees. Administering an option's grant for full-time employees is complicated enough without opening it up to part-time employees. However, if you are a full-time employee at the time of the grant and later switch to part-time, your employer may adjust your vesting schedule or reduce the number of options you receive. I certainly would read the grant option carefully and discuss your concerns with the grant adminis- trator before you make the switch. Question: This great job is available, but if I leave my employer I will lose a lot of stock options. What should I do? Answer: You can ask your new employer to replace what you lost to come to work there. It doesn't always work, but if the company wants you bad enough, it will replace what you lose in kind or somehow attempt to help you recover your loss. Be advised, however, that the new employer is under no obligation to do this. Check your options grant for details and time frame for exercising vested options before you leave. Caution Discuss with a potential new employer any concerns you have over the options you are leaving behind before you take the new job. Employee Stock Purchase Plans Employee stock purchase plans are a popular benefit. They are usually easier to understand than options programs, although questions do arise. Here are some of the more common questions and answers. Question: What if I change my mind during the offering period and want out of the program? Answer: In most cases, your employer will allow you out of an employee stock purchase plan (ESPP) during the offering period. You will get back the money deducted from your pay, but probably without any interest. Question: What if I change my mind during the offering period and want to join the program? Answer: You will probably not be able to join during the offering program. ESPPs are set up to provide a period for joining, known as the enrollment date. You may enroll before this date, but not after it. Once the offering period has begun, enrollment closes until that period ends and a new enrollment period begins for a new grant.