M&A: Basics

Articles (Jump to FAQs)

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

Richard Lintermans
What happens depends on the terms of your option grants, the terms of the M&A deal, and the valuation of your company's stock.

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.

Return to top of this page


FAQs (Jump to articles)

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

It's important to know the difference, as this can trigger changes in your outstanding stock grants. An acquisition of a company occurs when...

How is the treatment determined for stock options and restricted stock in a merger or acquisition?

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...

What is a "lockup"?

Lockups are contractual restraints on...

How might the terms of my company's stock plan or my grant agreement affect the treatment of my options and restricted stock if my company were acquired?

In many plans unvested options accelerate in some way...

What affects the willingness of a buyer to cash out or convert the seller's options other than the deal's tax structure?

An acquirer may be more likely to seek a cashout of your stock options (or restricted stock) upon the consummation of an acquisition if...

How can I find out how much I will make from an acquisition of my company?

Unless you are among the inner circle of management...

If my company is bought for stock of the acquirer, will I be able to purchase the same number of shares in the buyer as I am allowed to with my current options and restricted stock?

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...

What happens if our company's stock price or the acquirer's stock price fluctuates before the acquisition is completed?

The result depends on the terms of the acquisition agreement. If the purchase price...

Return to top of FAQs