Will my stock options just disappear when the company is sold?
Not automatically, but stock options are a different animal from your ESA-protected employment entitlements, so they need their own careful look. Unlike vacation pay or notice, which carry over through a business sale under Ontario's continuity-of-employment rules, stock options are creatures of contract — governed entirely by whatever option plan or agreement you actually signed, and by what the purchase agreement between the seller and the buyer says happens to outstanding options on a sale.
Many option plans include specific "change of control" language spelling out what happens automatically when the company is sold: options might vest early, get cashed out at a formula tied to the sale price, get assumed by the buyer on similar terms, or in some plans simply be cancelled if unvested, depending on exactly how the plan and deal documents are written. Because there's no general legal rule guaranteeing your options survive a sale the way your vacation entitlement does, it genuinely comes down to your specific plan documents and the deal terms.
Pull out your original option grant agreement and plan document and read the change-of-control section carefully, and if it's unclear or doesn't match what you're being told, get it reviewed rather than relying on a verbal summary.
Key takeaways
- Stock options aren't protected by the same continuity rules as ESA entitlements like vacation or notice.
- What happens to them depends entirely on your option plan and the deal's change-of-control terms.
- Options can vest early, be cashed out, be assumed, or be cancelled, depending on those documents.
- Read your actual plan and grant agreement rather than relying on a verbal summary.