Options Trading Tutorial

What happens to unvested stock options when a public company goes private?

If a public company gets taken over by private equity investors, what is the typical handling of employee stock options ? The stock options are given as incentive, so it would be unfair to ignore them even if they are unvested. On the other hand, determining a fair value for them is difficult. Would love to hear from people who have gone through this process or have the legal expertise to comment on this situation.

Public Comments

1. You can keep them as unissued stock or you can delete them. It all depends upon how you set the company up legally.