stock option grants- do I get the original or a copy

February 2, 2006 10:59 AM

StockOptionFilter: Who gets the signed original documents, and who gets the photocopies? Does it matter?

The new controller is issuing stock option agreements, but she wants to keep the signed originals, and will only give the employees photocopies. I believe I should have the original (since it is a option that I might wish to excercise, hence the burden of proof is on me). The more general question now fascinates me, and for some reason I can not seem to get answers online. Is a copy of a signed document as good as the original? What is the legal difference between a signed original and a copy, or under what circumstances might this be relevent? I can find some stuff about wills/probate, and real estate transactions.... are those special cases?

posted by sgarst to law & government (6 comments total)

You get paper? It's all electronic in some places now. I wouldn't worry. Just keep good records.
posted by caddis at 11:08 AM on February 2, 2006

Generally, copies are just as good as originals (and you should consider who is more likely to keep the original safe - you or the company).
posted by patricio at 11:23 AM on February 2, 2006

In issuing stock options, grants and other similar documents I have always executed two sets of originals -- with signatures of the grantee and grantor on each set.
posted by ericb at 11:41 AM on February 2, 2006

Same procedure followed in executing Non-Disclosure Agreements, Letters of Intent, Employment Agreements, etc.
posted by ericb at 11:42 AM on February 2, 2006

As mentioned, though, copies are fine. Your stock option will be filed with your company's counsel and accounting firm, as well as various state and federal regulatory groups (e.g. the SEC, if you are public) -- so records exist of the arrangement between you and your employer.
posted by ericb at 11:49 AM on February 2, 2006

A copy of an original signed option agreement shouldn't be a problem for you.

The only time that this would even be an issue would be if they didn't honor your option with the company, and then claimed that the document never existed in the first place. You would have to produce your copy and under penalty of perjury claim that it was a true and correct copy of the original. I would think that it would be either very rare, or both parties would have to be extremely angry with each other to stoop to this level - but if you're in a courtroom situation it could come to that.

Sign two originals if you want to feel more comfortable.

Keep this in mind, an option is a right granted by the issuer - it's not a contract in and of itself. You could argue that the granting of options is an inducement to do something (i.e. take the job). A warrant looks just like an option, but is an actual contract for consideration. This very issue came up in a lawsuit I was involved with.
posted by marc1919 at 4:12 PM on February 2, 2006