M&A

Will your vesting accelerate? What will you receive in exchange for your company's stock options?

M&A examines the fate of employee stock options in mergers, acquisitions, spinoffs, and divestitures. This overview page presents selected articles and FAQs from the subtopics in this section. For the full content of a subtopic, click on a link in the upper left.

Articles   (Jump to FAQs)

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

Richard Lintermans
You worry about losing your job and your valuable stock options. What happens to your options depends on the terms of your options, the deal's terms, and the valuation of your company's stock.

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

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) 

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? 

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) 

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, 1/08
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.

Purple People

Kerry Dolan
Forbes, 9/1/03
During its bull run of the 1990s, Yahoo! acquired dozens of e-businesses and made hundreds of stock millionaires in the process. Where are they now?

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FAQs   (Jump to articles)

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 happens to my unvested stock options if my company is acquired? 

There are many possibilities for unvested stock grants. Study the terms of your stock plan and grant, and examine the way the acquisition is structured. Some companies accelerate the...

What happens to my stock options in a part-cash, part-stock deal? 

When the consideration paid in the acquisition or merger is a combination of stock and cash, it's not...

UPDATED! In an acquisition, can the buyer assume just my in-the-money options and not my underwater options? 

In an M&A deal, the buyer can assume or convert just the valuable stock options and cash out the underwater options or let them...

According to the terms of the acquisition, all my stock options will be converted to those of the buyer. How do I ascertain the number of options I will have and the exercise price? 

Options typically convert according to the negotiated values of the target's and the acquirer's stock at the time of acquisition...

My company is selling the small division I work for. I will no longer work for the company but will still have the same job, with new corporate owners of my division. What will happen to my options in the divestiture? 

Check your stock plan to see if it addresses this type of divestiture in which just a small division or subsidiary is sold...

I see many different terms used to describe corporate transactions. What is the difference between a merger, an acquisition, and a divestiture? 

An acquisition of a company occurs when...

What's the tax treatment of my stock options in an acquisition? 

This depends on how options are treated in the...

Can an acquisition of my company accelerate the vesting of my stock options? 

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

NEW! What is the tax treatment of my restricted stock in an acquisition? 

This depends on how restricted stock (or restricted stock units) is treated in the acquisition...

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