How do I set the strike price for option grants?
When the board makes option grants, it has to set a strike price – the exercise price for each option. (NB: this applies equally to stock options for corporations and unit options for limited liability companies, so don’t get thrown off by the terminology.) How does the board do this? You look at the plan,…Read More
How to backdate stock options
I’m sure that at least one securities litigation lawyer got a fever just from reading the title of this post. And that’s a good thing — you should all learn from it. Here’s the scenario: you intended to grant some options to a valued employee, but that was a few months ago, or maybe even…Read More
Accelerating stock options
Someone recently asked me about stock options: How do they generally work when stock hasn’t vested and the company undergoes a change of control? Do the options immediately vest? Are they lost? The typical model is that the vested options are either exercised, net exercised, or paid as if net exercised. In short, they’re paid…Read More