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. A call stock option is an option to buy a specified stock at a specified price, while a put stock option is an option to sell a specified stock at a specified price. The Black-Scholes formula is for the value of a call option. The B-S value of the company's options is 60% of face value, resulting in a ratio of two option equivalents to one share of restricted stock. Total option equivalents granted to this employee was 2,000 [1,000 options + (500 restricted x 2)]. Restricted Stock. Restricted stock plans provide employees with the right to purchase shares at fair market value or a discount, or employees may receive shares at no cost. However, the shares employees acquire are not really theirs yet-they cannot take possession of them until specified restrictions lapse.
Instead, stock options represent the right to purchase stock from the company at a fixed price (the “strike price” - see below), regardless of its market value. If the company is sold for $10/share, you can buy your stock at $1/share (or whatever your strike price is), sell it immediately and trouser the difference.
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. A call stock option is an option to buy a specified stock at a specified price, while a put stock option is an option to sell a specified stock at a specified price. The Black-Scholes formula is for the value of a call option. The B-S value of the company's options is 60% of face value, resulting in a ratio of two option equivalents to one share of restricted stock. Total option equivalents granted to this employee was 2,000 [1,000 options + (500 restricted x 2)]. Restricted Stock. Restricted stock plans provide employees with the right to purchase shares at fair market value or a discount, or employees may receive shares at no cost. However, the shares employees acquire are not really theirs yet-they cannot take possession of them until specified restrictions lapse.
Instead, stock options represent the right to purchase stock from the company at a fixed price (the “strike price” - see below), regardless of its market value. If the company is sold for $10/share, you can buy your stock at $1/share (or whatever your strike price is), sell it immediately and trouser the difference.
28 Sep 2001 Unvested Stock Options Can Be Divided in Divorce. In addition, the court must find a way to value the options. In this case, the court decided 27 Sep 2002 stock options, discussing alternative valuation methodologies, and offering practice The option is granted during the marriage, was unvested. Calculate the future value of your employee stock options based on the expected growth rate of the underlying shares. Includes year-by-year growth chart. 10 Jan 2012 The value of an option on a stock that pays dividends is less than the The value of an unvested option should be approximately its value if it
