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Which Financial Information Must a Private Company Provide to Employees with Vested Stock Options?

October 20, 2010 at 12:47 pm Comments disabled

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This post is based on a Quora question that I answered (Q and A are somewhat edited). Q. Which financial information must a private company provide to employees with vested stock options?

A. In California, Corporations Code Sections 1500 and 1501 specifies records that must be kept by each corporation. Shareholders’ rights to inspect records are set forth in Sections 1600 and 1601.

I know of no comparable statutory provisions with respect to holders of vested options, however. Unless the stock option plan grants you such rights, the easiest way for you to gain such rights would be to exercise your option with respect to one share and, then, exercise your rights as a shareholder.

Related post: Which Financial Information Must a Corporation Provide to its Shareholders?

Dana H. Shultz, Attorney at Law  +1 510-547-0545  dana [at] danashultz [dot] com
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  1. Andrew Card

    5/30/2011 | 1:08 pm Permalink

    How does “exercise your option with respect to one share and, then, exercise your rights as a shareholder” square with this part of the code when one share is less than 1 percent ?

    1600. (a) A shareholder or shareholders holding at least 5 percent
    in the aggregate of the outstanding voting shares of a corporation or
    who hold at least 1 percent of those voting shares and have filed a

  2. Dana

    5/30/2011 | 2:13 pm Permalink

    @Andrew Card
    As you noted, Section 1600 pertains to shareholders holding specified percentages of outstanding voting shares. Section 1601, in contrast, applies to “any shareholder”.

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