I’m an exec at a startup, and there’s a lot of talk about a possible merger. If there’s a merger, what will happen to my unvested options?
Naomi Kokubo, Cofounder of Founders Space
Anything can happen. They can be canceled, accelerated, or stay on the same vesting schedule. You need to check your stock option agreement. If it’s not specified in your stock option agreement, then it’s up to negotiation.
Many option plans contain a provision that states that if the acquiring party doesn’t assume the option plan and doesn’t keep the options on the same vesting schedule, the options will vest immediately upon the merger.
It’s rare that the unvested options are canceled with no payout to employees. This would be an unwise move in almost all cases.
I hope this helps.