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What have you seen with regard to option vesting on sale of private company?

In a situation where all employees have some options and a 4 year vesting schedule; how have you handled unvested options upon a sale of the business? Currently the options program does not contain a change of control provision. Sr Managers have alot of shares while staff have nominal amounts. Assume that retaining staff is important.

Answers

Jon Placa
Title: Director of Finance and Operations
Company: NarrativeDx
LinkedIn Profile
(Director of Finance and Operations, NarrativeDx) |

Most Options should make mention of triggers that occur if a company is acquired; I've seen many options mention full-vesting upon acquisition. However, often these terms are renegotiated by the acquiring company - they too would like to retain the talent they're purchasing.

Double check the options and stock plan to see if there is any mention of triggers. if not, I would seriously considering adding a clause about change-in-control and how it affects shares.

The last thing you'd want is for a company acquisition fall through due to poor option planning.

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