Warning: session_start() [function.session-start]: open(/home/content/79/5337879/tmp/sess_jc2354ovuj2nn3hikp4vnifl17, O_RDWR) failed: No such file or directory (2) in /home/content/79/5337879/html/wp-content/plugins/constant-contact-api/functions.php on line 5

Warning: session_start() [function.session-start]: Cannot send session cookie - headers already sent by (output started at /home/content/79/5337879/html/wp-content/plugins/constant-contact-api/functions.php:5) in /home/content/79/5337879/html/wp-content/plugins/constant-contact-api/functions.php on line 5

Warning: session_start() [function.session-start]: Cannot send session cache limiter - headers already sent (output started at /home/content/79/5337879/html/wp-content/plugins/constant-contact-api/functions.php:5) in /home/content/79/5337879/html/wp-content/plugins/constant-contact-api/functions.php on line 5
mergers and acquisitions Archives - Help with mergers & acquisitions, raising capital, creating stock options and other equity plans

Posts Tagged ‘mergers and acquisitions’

Acquisition: What Happens After a Shift of Power? Part 6

Who will profit from your stock options?

In our last blog post, we continued to uncover aspects of a merger or acquisition that could impact the financial future of your employee stock options. We began discussing popular exchanges that could occur and introduced the cash exchange and exchange for buyer options. As an employee, a merger or an acquisition is nerve racking, it brings out insecurities because of the unknown and sparks a plethora of questions.

In our sixth and final installation, we will continue to discuss that burning question we introduced in parts one, two, three, four and five, “What will I get for my stock options?”  Read the rest of this entry »

Acquisition: What Happens After a Shift of Power? Part 4

Will you ever see a profit in an acquisition?

In our last blog post, we discussed vested and unvested options in relation to an impending acquisition. Today, in part four of our series, we will determine how terms of an acquisition deal, valuation and option conversion can affect your stock options during a shift of power.

Acquisition Terms:

When you are granted a plan for your stock options, be sure to review any and all clauses concerning potential shifts in power. This includes a merger or acquisition.  Your plan should always map out the conditions of any acquisition in relation to your stock options. However, the future of those options and what you may receive from an acquiring  company will be directly dependent upon the terms of the merger or acquisition deal.   Read the rest of this entry »

Acquisition: What Happens After a Shift of Power? Part 3

Is your money on the line?

We have recently introduced a few of the procedures for moving forward with stock options in a merger or acquisition. In parts one and two, we discussed vested and unvested options, acceleration mechanics and events and also conveyed the importance of understanding your stock option plan or individual grant agreement.

In part three, we will answer your questions by introducing how the terms of your merger or acquisition could affect the future of your stock options.  While your individual documents should grant you some insight, the future of your stock options depends heavily on the terms of your company’s unique merger or acquisition.

Vested options: There are multiple things that could happen to vested options and the final outcomes will occur according to how the merger or acquisition is structured.  Vested options could:

  • Remain unchanged (company must remain intact)
  • Rolled over into options for the buyer
  • Turned into cash payment upon cancelation

According to MyStockOptions.com, “Sometimes companies provide a choice to employees: Vested options are either cashed out or swapped for vested options in the acquirer. Depending on the structure of the acquisition, you may have to exercise your options before the deal closes. Your stock plan may provide the board the power to force an exercise. If so, you would receive whatever your company’s shareholders receive (e.g., cash, acquirer’s stock, or a combination) in exchange for their stock.”

Unvested options: As we discussed in our previous posts, the future of unvested options in a merger or acquisition is often uncertain. The purchasing company could simply make an exchange of the company’s options for their own, leaving things relatively unchanged or a new grant could be offered. It is also common for the acquiring company to grant stock options under their traditional plan; these typically resemble the packages for new hires. It is also possible, but unlikely, for options to be cashed out.

There are still multiple aspects of a merger or acquisition to understand before being able to fully comprehend the future of your stock options. Check back in a few days for part four. We will dive deeper into the topics of deal factors, valuation and option conversion.

Stock Connections specializes in working with San Francisco Bay Area companies that are involved in mergers & acquisitions, are raising capital, or creating stock option or other equity plans. We help start-up, private and public firms become – and remain – SEC-compliant. Stock Connections’ services are designed to help both start-ups and established firms comply with SEC and other regulations in their equity compensation programs. If you or anyone you know is looking to get involved with any of the above, we encourage you to contact us today.

Photo Credit: V1ctor.

Acquisition: What Happens After a Shift of Power?

What will you get in liquidation?

Changes occur in corporate America every day and as an employee these changes can be intimidating, especially when they are related to the future of stock options during a merger or acquisition. In this multi-post blog series we will attempt to answer the age old question of, “What happens to my stock options?” In part one, we will introduce the first steps in understanding how stock options can be affected in a merger or acquisition.

Know the terms of your options: When you are given an initial plan for your stock options, you are basically given all the information you could possibly need for reference. Your individual grant agreement and your individual stock option plan will be the two resources you turn to for the details needed to move forward after a merger or acquisition occurs. Read the rest of this entry »

Free Consultation
Follow Theresa
Archived Newsletters

Warning: Unknown: open(/home/content/79/5337879/tmp/sess_jc2354ovuj2nn3hikp4vnifl17, O_RDWR) failed: No such file or directory (2) in Unknown on line 0

Warning: Unknown: Failed to write session data (files). Please verify that the current setting of session.save_path is correct () in Unknown on line 0