The ability to utilize stock options or restricted stock as handcuffs can become compromised in the acquisition context. If a seller's stock options accelerate or if a seller's restricted shares become vested upon a change in control, the acquirer may find that pre-existing handcuffs will become unshackled moments after the closing is consummated. Where the requirements for pooling of interests accounting treatment once restricted an issuer's ability to provide for acceleration of stock options, the planned elimination of pooling treatment at the end of this year is likely to make option acceleration more prevalent. This does not mean that acquirers cannot impose handcuffs. Rather, it more likely means that acquirers will find it necessary to issue new stock options or grant additional restricted stock to the employees of acquired businesses in order to assure continuing contributions from the target's workforce.
Today is an extraordinarily exciting time.
The rate of change in business, as with the rate of change in society as a whole, has accelerated beyond what we could have possibly imagined as recently as five years ago. There is no reason to believe that the rate of change in business practices will lessen in the near future. All rights reserved.