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Rajah Lehal

Reverse Stock Split Impacts Company ESOP

November 01, 2015

Links from this article: Read the article here.

The reverse stock split is intended to increase the per-share trading price, in order to satisfy the $1 minimum bid price requirement for continued listing on the NASDAQ Capital Market. As a result of this reverse 10:1 stock split, the maximum number of shares available for grant under the firm’s stock option plan and restricted stock plan will be adjusted proportionately. This is an example of how an option plan can be amended in response to a stock split.

Read the article here.Take away:

  • Stock splits will affect option plans. Option holders should receive advice on what this may mean for them.
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Written by Rajah. Rajah Lehal is Founder and CEO of Clausehound.com. Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.