Virgin Islands Cash Award Paid to Holders of Non-Exercisable Stock Options Upon Merger or Consolidation

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US-CC-18-354F
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This sample form, a detailed Cash Award Paid to Holders of Non-Exercisable Stock Options upon Merger or Consolidation, is a model for use in corporate matters. The language is easily adapted to fit your specific circumstances. Available in several standard formats.
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FAQ

If a startup never goes public, the stock options that employees have may become worthless or may have limited value. Stock options give employees the right to purchase a certain number of shares in the company at a predetermined price (also known as the exercise price or strike price).

At the time of your departure, you are generally allowed to exercise the vested portion of your stock option awards, and you will forfeit the unvested portion. If you are planning on leaving your job, you should review the details of your vesting schedule.

If the company is acquired for cash, the expiration of the options expiring after the acquisition date will be accelerated to the acquisition date. Since your proposed scenario involves $20 per share, your short $10 puts will expire worthless and you will keep the premium.

In most cases, the unused shares are redistributed to all shareholders proportionate to their ownership. So for example, if you are a founder in Company XYZ with a 10 percent equity stake, and the leftover option pool is 10 percent, your cut would be 1 percent, bringing your total to 11 percent.

Stock compensation is a way corporations use stock or stock options to reward employees in lieu of cash. Stock compensation is often subject to a vesting period before it can be collected and sold by an employee.

Unvested Options ? Depending on the structure of the deal, there are three possibilities for unvested options. The holdings could be canceled, they might be converted to cash and paid out over time, or they could be converted to the acquiring company stock and subject to a new vesting schedule.

Unvested Options ? Depending on the structure of the deal, there are three possibilities for unvested options. The holdings could be canceled, they might be converted to cash and paid out over time, or they could be converted to the acquiring company stock and subject to a new vesting schedule.

When A Company Is Bought, What Happens to the Stock? The stock of the company that has been bought tends to rise since the acquiring company has likely paid a premium on its shares as a way to entice stockholders. However, there are some instances when the newly acquired company sees its shares fall on the merger news.

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Virgin Islands Cash Award Paid to Holders of Non-Exercisable Stock Options Upon Merger or Consolidation