CUET Preparation Today
What is the purpose of an ESOP "exercise period"? |
It's the period during which board of directors can choose to vest their options It's the period during which the company can buy back the vested shares from employees It's the period during which employees can exercise their right to apply for shares based on vested options It's the period during which employees can sell their vested shares to external investors |
It's the period during which employees can exercise their right to apply for shares based on vested options |
The correct answer is option 3- It's the period during which employees can exercise their right to apply for shares based on vested options. The purpose of an Employees Stock Option Plan (ESOP) "exercise period" is to specify the timeframe during which employees who have met the vesting conditions can choose to exercise their stock options and apply for shares at the predetermined exercise price. Exercise Period: Period after vesting within which the employee must exercise the right to apply for shares against the option vested in him in pursuance of the Employees Stock Option Plan. |
