M&A: Basics
Articles
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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.
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.
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FAQs
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It's important to know the difference, as this can trigger changes in your outstanding stock grants. An acquisition of a company occurs when...
Many factors can affect what happens. The senior officers of the two companies in the transaction (or their boards) and their attorneys negotiate how grants will be handled according to...
You will face a lockup when your company goes public, or perhaps in an acquisition. A lockup is a contractual restraint on...
In many plans unvested options accelerate in some way...
An acquirer may be more likely to seek a cashout of your stock options (or restricted stock) upon the consummation of an acquisition if...
Unless you are among the inner circle of management...
Not necessarily. If an acquirer is using its stock to pay for shares of your company, then the purchase will be denominated in stock according to one of several methods...
The result depends on the terms of the acquisition agreement. If the purchase price...
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Tax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.
