Stock Options and Corporate Spinoff

System

This discussion was created from comments split from: Stock Options and Corporate Spinoff.

vicm881

I have the same issue as Darren above. The company spun off a division and the shares and strike prices have changed for all unvested options. Many of the shares have vested but not exercised from over 8 different grants, and many grants still have several years of unvested shares. How do you manage this price and share change without impacting the total vested in the money amount???

mshiggins

This answer from the original discussion where this question was posted is still the best answer (click on the date to link to the post):

https://community.quicken.com/discussion/comment/20148480#Comment_20148480

Tom Young

"I have the same issue as Darren above. The company spun off a division and the shares and strike prices have changed for all unvested options."

Could you expand upon this please, with some more detail, particularly the change in shares you mention?

In a spinoff owners of the parent company stock have an unchanged number of shares, but their basis changes, so for the parent company options I'd think that the number of shares would be unchanged but that the strike price would need to change. I'd expect that "equity" would require that all existing unexercised options, vested and unvested, would be replaced by new parent company options at a different strike price, and "new to you" options on the child company stock at a strike price that puts you more or less in the same position (financially) that you were in before the spinoff. If the number of shares in the parent company options changed then that would suggest a splitoff instead of a spinoff. The devil is in the details on these sort of things.

I've not really used the employee stock option feature in Quicken very much - never received stock options personally - but I expect that you're going to have to more or less "start over" by deleting the past history of vesting and then entering "new" grants to take their place. Hopefully the options are non-qualified (no income and tax effect until you do exercise) and you haven't exercised any shares along the line that have created compensation income earlier.