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M&A

What can happen to stock grants in corporate mergers, acquisitions, spinoffs, and divestitures?

Browse an overview of this section below, or explore the subtopics to the left.

Find easily understandable explanations of key terms and concepts in Basics. Learn what an M&A deal may mean for your grants in the subsection Impact. Then move on to a comprehensive range of content explaining the tax treatment of stock compensation in M&A.



  Articles   FAQs  

My Company's Being Acquired: What Happens To My Stock Options? (Part 1) This is premium content

Richard Lintermans
The terms of your option grants, the terms of the M&A deal, and the valuation of your company's stock all affect the treatment of stock options in M&A. What happens to your unvested options is the main focus of concern.

My Company's Being Acquired: What Happens To My Stock Options? (Part 2) This is premium content

Richard Lintermans
Your company is being acquired. You worry about losing your job and your valuable stock options. In Part 1 we looked at the importance of your option grant terms. Part 2 examines the acquisition's terms and the valuation of your company.

My Company's Being Acquired: What Happens To My Stock Options? (Part 3) This is premium content

Richard Lintermans
Part 1 looked at the importance of your option grant terms. Part 2 examined the acquisition's terms and the valuation of your company. Now let's look at the tax treatment.

The Acquisition: All's Well That Ends Well? This is premium content

I was hired by Company X and received equity pay that might have been worth between $300,000 and $400,000 at our IPO. Not bad, except that we never went public.

Understanding The Risks In Your Pre-IPO Stock Options (Part 1) This is premium content

Edwin L. Miller, Jr.
Understand what could happen to your stock options or restricted stock in venture capital financings, in an acquisition, or in an IPO. Part 1 looks at M&A deals; Part 2 analyzes IPOs.

Private Equity Transactions: Understanding Some Fundamental Principles

Jeffrey Blomberg
Business Law Today
If your company is acquired by a private equity firm, your stock compensation will change. For key managers, its importance may increase, though new restrictions may apply.

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What will happen to my vested stock options if my employer is acquired by another company?

Your vested stock options may be handled in any of the following ways in an acquisition, depending on the deal's terms and any limits in your stock plan. For example, they could be rolled over into...

What could happen to my restricted stock in an acquisition of my company? This is premium content

The treatment of the restricted stock (or restricted stock units) in the acquisition or merger depends on various factors. The possible treatment of your unvested shares includes...

What will happen to my unvested stock grants if my company is acquired or if it merges with another company? This is premium content

In a merger or acquisition (considered a change in control), there are many possibilities. Study the terms of the stock plan and any individual grant agreements with special provisions, and examine the way the acquisition is structured. Some companies...

Can an acquisition of my company accelerate the vesting of my stock options? This is premium content

Possibly. Read your grant agreement and the stock plan documents carefully...

How do "change of control" and trigger provisions in stock plans generally work to accelerate vesting? This is premium content

Provisions vary according to the terms of your grant and stock plan. These provisions can be triggered when...

What portion of unvested options is normally accelerated in a change of control? This is premium content

Typically, stock option vesting is accelerated in some way in a change of control. Depending on your stock plan...

Once acceleration of vesting has occurred, how long do I have to exercise my newly vested stock options in the seller? This is premium content

First check whether your options will be converted to options in the buyer...

A private equity firm is buying my company. What will happen to my stock options and restricted stock? This is premium content

The vesting of the grant will probably accelerate according to specifics in your stock plan or grant agreement. The grants will probably be cashed out. Depending on your level in the company and the length of your employment, you may receive a meaningful grant in your newly private company that will require you to...

In an acquisition, what happens to my underwater stock options? This is premium content

This depends on the provisions in your stock plan and the structure of the merger or acquisition. According to the flexibility for adjusting outstanding grants that your company's stock plan provides, the buyer can...

What would happen to my performance shares in an acquisition of my company? This is premium content

For a change in control (e.g. a merger or acquisition), the performance period for measuring whether goal(s) are reached is cut short. Commonly, performance share plans...

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