Need help with unusual employee stock option split/spin off

Gatman1104

Hi everyone,

My employer grants equity awards each year, and in late 2022 they spun off one subsidiary as a new public company (parent ticker FBIN if anyone is curious). The spin off was straight forward enough - one share of MBC (spun off company) for each share of FBIN you had. This was for vested shares.

For options, they adjusted the number of FBIN awards we had based on the pre-spin and post-spin share prices (to essentially keep us whole - # of awards went up and exercise price went down). So as an example, I had an option award from 2020 of 1,334 options, that were supposed to vest 445 in 2021, 444 in 2022 and 445 in 2023, all with an exercise price of $69.34. The 2021 vest was exercised back in 2022. The vested 2022 and unvested 2023 options were adjusted from 444 and 445 respectively to 504 and 504, respectively. Exercise price was adjusted from $69.34 to $61.12.

Luckily I've only worked there since 2019 and only have 4 awards to deal with. It appears there's no way to adjust the existing vesting schedule. Do I need to delete these and just do everything over again treating it as two grants (because I have two different exercise prices at this point for this grant:

2021 vest - 445 shares @ 69.34

2022 vest - 504 shares @ 61.12

2023 vest - 504 shares @ 61.12

I'm loathe to enter all this over again. Is there a way to cancel the original grant after the 2021 vest and just enter a new grant for the revised awards? That would at least save me some time.

Any help would be greatly appreciated.

Thanks,

Gary

mshiggins

It has been quite some time since I had to do this, functionality could have changed since that time. The basic process is:

• Update the expire date for the original grant to the date of the spinoff.
• Create new grant(s) at the new exercise price(s).

Gatman1104

Thanks. I got this done, but it was a bit of work. Many of these grants vested back in February, but the changes and spinoff happened in December. Most wouldn't let me change the expiration date, but I tried deleting the vests that were incorrect and that basically cancelled them for me. I then went in and put new grants in for the revised amounts and eventually got everything reconciled. It was a bit of work because there were shares, options and performance awards...and all were impacted.

So for anyone that may find this in the future, best plan is to cancel/delete the vestings that happen after the spin-off/change date, and then enter new grants for the revised shares/options.