Under the terms of any option agreements you have in place, you will be required to give written notice to option holders of a potential Exit Event (the “Exit Notice”). The Exit Notice must usually be given 14 days prior to the Exit Event, but if you do not use the Vestd option agreements you should check as the notice period may vary.
The option agreement may give option holders the right to exercise their options and the right to accelerate the vesting of their options upon an Exit Event. It is important to understand the terms that apply to your option holders under their option agreements to ensure you communicate their choices accurately in the Exit Notice.
Below is an example of wording that may be used in the Exit Notice. Please note that this wording should be adapted to your company’s specific circumstances and the terms of any option agreements.
We’re pleased to inform you that [company name] has the potential of going through an Exit Event on [date] with a potential sale of price of [x] per share. This is your formal written notice of the prospective Exit Event pursuant to clause [4.1] of your option agreement. [Pursuant to your option agreement, you have the right to accelerate upon an Exit Event]. Please confirm if you will be exercising your options pursuant to your agreement, and how many you will be exercising. [The acceleration, exercise and Exit Event process will all be managed through the Vestd Platform].
If you are going through an Exit Event, Vestd will be able to help you through the process on the Vestd platform.