An employee received an option agreement only after his employment was terminated. The agreement only stated the expiration date of the option, but not a deadline for payment and execution. The employee sought to pay for the exercise of the option only after its expiration date.
The Court rejected the claim and held that because the employee did not pay on time for the exercise, he is not entitled to the shares. An option is a right granted to an employee to purchase a share under certain terms set in the employees stock option plan and the allotment agreement. However, the exercise of the option is not automatic and is subject to meeting the terms set in the option plan and the allotment agreement, which the employee must strictly meet in order to be deemed to have accepted the offer and purchased the share. Here, the allotment agreement was sent to the employee only after termination of his employment and after the deadline for exercising the option, when no deadline for signing or payment was stated, but only the expiration date of the options. Nevertheless, because the employee understood that he must sign immediately, and because he sought to pay for exercising the option only after the expiration date, he is not entitled to the shares.