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Cancellation of stock options

Accounting For Stock OptionsIf an employee leaves in 2012 but has 90 days to exercise their vested ISO's, do we show their unvested shares as Cancelled as of 12/31/11, or do we have to wait until the termination date?


Topic Expert
Joan Varrone
Title: CFO
Company: Cloud Cruiser
LinkedIn Profile
(CFO, Cloud Cruiser) |

You have to wait until the termination date as they have the right to exercise

Jason Chroman
Title: Vice President Finance & Controller
Company: Tubular Labs
LinkedIn Profile
(Vice President Finance & Controller, Tubular Labs) |

I would show the unvested shares as cancelled at 12/31/11, as there is no way that they could ever be exercised.

The vested shares should remain outstanding until they either expire or are exercised.

Elena Thomas
Title: COO/ CFO
Company: Plan Management Corp.
LinkedIn Profile
(COO/ CFO, Plan Management Corp.) |

Jason is correct. Automated systems (our OptionTrax system included), would cancel (as a "forfeiture") any unvested shares on the termination date. Then those vested shares stay active for the 90 day termination period and if they are not exercised in that period are cancelled as an "expiration".

(Agent, JKS Solutions, Inc.) |

Be sure the cancelation is in line with their agreement's definition of the termination date.


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