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M&A - Basics

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

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.

Restricted Stock Units After An Acquisition: Know What Could Happen This is premium content

Podcast included! When a company is merging or being acquired, many employees are left wondering what will happen to their unvested RSUs. While the outcomes for holders of unvested RSUs and current equity holders will depend on the terms of the M&A deal, if your company is being acquired there are a few things you should know about your restricted stock units and what may happen.

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.


What is the difference between a merger, an acquisition, a divestiture, and a spinoff?

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...

Is it common to get a retention grant when your company is acquired? This is premium content

We have seen research suggesting that, at least in deals involving big acquirers, about...
Show More FAQs (6 more)

What is a lockup? This is premium content

You will face a lockup when your company goes public, or perhaps in an acquisition. A lockup is a contractual restraint 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? This is premium content

Some plans give the company's board of directors discretion over the treatment of the options and restricted stock. The board or committee may be empowered to decide...

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

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? This is premium content

You must learn about the deal's terms. 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? This is premium content

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? This is premium content

The result depends on the terms of the acquisition agreement and the merger consideration that will be used. The approaches usually taken in the period between the deal's signing and closing are...
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