Ask HN: What happens to unvested equity in an acquisition?

Posted by dear on Saturday January 12, 2013 @03:16PM
from the ask-hn dept.

If, for example, shares are vested over 4 years, but in the third year an acquisition occurs. What would happen to those unvested shares?

( 4 comments | 5 points | on HN )

Re:Ask HN: What happens to unvested equity in an acquisition? by tptacek on Saturday January 12, 2013 @07:42PM (#5049487)

Either the unvested shares won't vest immediately and things will go as you expected them to before acquisition, or they will all vest immediately, or they will vest immediately but be subject to a buyback. I've had all three in contracts.

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Re:Ask HN: What happens to unvested equity in an acquisition? by alanmhughes on Saturday January 12, 2013 @04:07PM (#5048896)

If you're asking from the perspective of evaluating an options package being offered to you or if you're planning to offer options to employees, I'd say it's pretty usual to expect all options to vest in the event of an exit/acquisition.

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Re:Ask HN: What happens to unvested equity in an acquisition? by spolsky on Saturday January 12, 2013 @03:48PM (#5048844)

It depends on what the options contract says, so read it and you'll see. Sometimes there is a provision for partial acceleration of vesting in the event of an acquisition.

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Re:Ask HN: What happens to unvested equity in an acquisition? by dear on Saturday January 12, 2013 @08:27PM (#5049599)

Thanks all! So basically it should be in the contract how it should be handled in case of an acquisition.

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