We are currently planning to spinoff one of our businesses. Does this automatically trigger a modification for our existing stock options? If so, will we need to get another valuation done at the spinoff date?
Stock modification- spinoff
All Replies
Viewing 1 replies (of 1 total)
- You must be logged in to reply to this topic.
If there are any adjustments to the stock options as a result of the spinoff, then it would be accounted for as a stock modification. Typical adjustments include a change in exercise price, number of stock options, exchanges of stock options or a grant of new stock options in the spinee. It also depends on if there is an antidilution clause in the stock option agreement for equity restructurings. The antidilution clause is meant to equalize the fair value immediately before and after and not result in incremental compensation cost. If there is no antidilution clause, then there will be incremental compensation cost and you should discuss with a valuation specialist.