Equity Revesting When Your Company Is Acquired

 

October 2025 Edition

We are now into Autumn with Columbus Day next week (also called Indigenous Peoples Day in Boston) and Halloween the end of this month. Time for foliage viewing, apple picking, raking the leaves, and still lots of outdoor sports, hiking, biking and the like. 

Sadly, there will be no further October baseball for our hometown’s beloved Boston Red Sox. Our club did make the post-season but that meant a best of 3 series, played entirely on enemy turf… in THE Bronx. The Yankees prevailed so no post-season games in Boston.  Still.. I’m not too disappointed because I thought all along that we were playing with “house money” given the fierce competition we faced just to get that far.  Nor am I ready to move on, saying “wait ‘til next year.”  Nope, I am still savoring the MLB season we just had.  This Sox team led the majors with twelve walk-off wins, and I had the pleasure of seeing the boys notch two of those wins at Fenway in the “walk off greens”.  Plus, there were even more games where I did stay through the 9^th to see Aroldis Chapman close the game.  This Sox reliever  (the best we’ve had since 2013’s Koji Uehara) never disappointed.  And just as much was enjoying the wonderful exuberance of Chapman’s entrance – To see once again El Tiante smoking up the Fenway skyline, to hear the Latina sounds of “La Reina” Celia Cruz, and view the salsa dancers as Chapman delivers his heat.  Please do check it out one more time before we close the book on these BoSox of 2025 – https://www.youtube.com/watch?v=IHYfnJC3uE0  

As much as I don’t want to close the chapter on Boston’s Boys of Summer 2025,  Boston MLB has now concluded.  Yet, as one door closes, a new door opens, and Boston’s sports scene is a lot brighter today than it was a week ago. This past NFL Sunday Night on NBC was a total surprise and  joy to watch.  I gave the 2-2 Patriots, with their up and down beginning against some of the weakest NFL teams,  not a snowball’s chance in Hell of beating the 4-0 Buffalo Bills, on the road, at Orchard Park in Western NY.  Facing Josh Allen and the AFC’s top team, incredibly, QB Drake Maye,  wide receiver Stefon Diggs, and a stout Pat’s defensive unit, pulled off a huuuuge upset, taking the Bill’s 23-20.   At half-time, I was amazed the Pats led 6-3.  So, I decided not to go to sleep.  Then, we all saw New England rally twice in the 2^nd half, with Maye then leading a final drive to set up the 52-yard field goal to win in the last 15 seconds.  We are now 5 games into the 17-game NFL season, with  the Pats now 3-2.  New England would be a wild card entry if the season ended today.  With their soft schedule ahead, hopes have now soared that in January, Mike Vrabel’s overachieving NE  squad might play (even if briefly) in the NFL playoffs.

Beyond pro sports, there was further good news this past weekend. Saturday night, I also had the pleasure of attending the BU Hockey season opener in a packed Agganis Arena.  The Terriers open the season no. 2 in national college hockey rankings.  With another strong group led by potential Hobey Baker contenders  Cole Eiserman and Cole Hutson (who both scored Saturday night), we can hope that coach Jay Pandolfo can again lead lead the scarlet to our 4^th consecutive Frozen Four, this time, in Las Vegas, next April.  Opening night fun even continued post-game.  My best friend Bob Imperato and I were able to partake in some fascinating opening night story-telling, in the Friends Lounge, when Brian Zive joined our table.  Brian amazed us both with a number of fabulous tales from his 30-plus years’ reign as the legendary “Sasquatch” of BU Terrier Hockey .   Ol story link - https://www.bu.edu/articles/2015/sasquatch-dog-pound/  That BU Today story was from 2015, ten years ago.   At some point The Daily Free Press / Hockey Blog should do an update, the FreePress / Hockey blog’s  own feature length Sasquatch story.  Such a wonderful man, and Brian has just so much to share with all of us.   Anyway,  good news for the Terriers Saturday and for the Patriots Sunday: fingers crossed that good news will continue  as October goes along.   

As for Newsletter items, nine days ago, CEOWORLD magazine published an article of mine, directed to founder CEOs, CTOs and other founder C-level officers, on navigating re-vesting of equity and other perils you are likely to face when your company is being acquired.   A link to that new article is featured as item #1. This newsletter also has links, in items #3 and #4, to two other earlier articles of mine both published in IVYEXEC career advancement website, on two separate subjects of interest to C-level and senior executives.  The first discusses an important technique, using “QSBS”, to achieve zero taxation if your stock gains are up to the greater of 10x growth or $15 million.  The second article is on  employment contract terms to seek in negotiations by life science C-level and senior executives.  There is also a special offer as item #5.  I hope some of these items might be of benefit… and my best wishes to all for the rest of October! 

1.    Equity Revesting & Other Founder Executive Concerns When Your Company Is Acquired

Are you a founder CEO, or co-founder CTO and other founder executive looking forward to the acquisition of your company?  Are you now looking forward to a long-awaited liquidity event?  The transaction is certainly good news, but, for you, there are certain risks  you ought to know about and plan for.  These risks include required re-vesting of your founder shares or your vested equity position, and a potential double trigger barrier to your own liquidity.  My article published nine days ago in CEOWORLD magazine offers a roadmap to help you navigate through the potential minefield of these critical issues when your company is to be acquired. This article analyzes these key issues and others from your viewpoint, as founder / C-level executive, and how you can respond to protect yourself while still being supportive to close the deal. Read the Article Here 

2.       Work with CEOs, C-Suite and Senior Executives, exclusively.

Robert Adelson is an attorney specialized in the representation of CEOs, C-level and senior executives. He no longer represents companies or employers.  Learn about Robert Adelson’s work with CEOs, C-level and senior executives to advise on and improve job offers, employment contracts, stock, RSUs, options, bonuses and other executive compensation matters, plus advice and aid on issues of wrongful termination, severance, exit terms, retention, change of control, other executive issues and more … More Details Here

3.       Achieving Zero Taxation on Sale of Your Appreciated Stock

Are you the CEO or in senior leadership at an early stage company or are you considering joining an early stage company, in either case, where executive equity  is or will be an important part of your executive compensation package?  My article published earlier this year, by IVYEXEC career advancement website, discusses how proper structuring of your equity grant can produce a huge cash benefit to you.  My article shows how use of qualified small business stock (QSBS), and other key techniques may enable you to have zero Federal taxation on all or most of the appreciation on a sale of shares.   Since my article’s publication in March 2025,  the 2025 tax law increased the amount that QSBS can shield from taxation to $15 million.  Thus, proper use of techniques I share can potentially save you over $3.5 million in capital gains and net investment income taxes you would otherwise have to pay out of pocket.  Read the Article Here

4.       Employment Contract Terms for Life Science Executives

Whether you have just received a job offer, have a chance to renegotiate your current contract, or are facing a change of control or termination situation, my article published a year ago, in October 2024 by IVYEXEC career advancement website,  advises medical device, biotech and other life science executives on the essential terms to negotiate including performance targets and equity geared to the stage of your life science company and its exit goals and key terms for your equity.  Read the Article Here

5.       10/2025 Offer:  Good through Halloween, Oct. 31th  

This 3-plus weeks value-packed offer, is as a way to get introduced to my law work: an Executive Employee Equity Law Diagnostic – this offer is good through 10/31/25.   More Details Here

It’s always a pleasure to get back in touch with you and other clients, friends, and colleagues.  I hope the links and information provided will be useful to you and that there will be an opportunity for me to work with you on legal matters in the near future. 

Let’s keep in touch!

Best regards,

Rob

Robert Adelson

*Adelson & Associates, LLC
Executive Employment Attorney
101 Federal Street, 19th Floor
Boston, MA 02110
(617) 204-5601 Law Firm
(617) 204-5602 Direct
(617) 204-5604 Fax
Email :  rob@attorneyadelson.com
Website: www.executiveemploymentattorney.com
LinkedIn: https://www.linkedin.com/in/robert-adelson-b8a1557/
Blog:  https://robadelson.wordpress.com/
X:  @AttorneyAdelson

Note on Adelson & Associates, LLC:
* Robert A. Adelson is the Principal of Adelson & Associates, LLC.  For fifteen (15) years, from October 2004 through December 2019, Robert Adelson practiced law and referred legal work to associates of his, trusted and experienced colleagues, as a partner of Engel & Schultz, LLP.  In December 2019, the lead partners of the firm announced they would go into semi-retirement, go their separate ways, and the office lease would expire in January 2020.  In response, Robert Adelson formed Adelson & Associates, LLC in December 2019 and commenced the new firm’s operations on January 1, 2020, with the new firm taking over, on that date and going forward, all current Robert Adelson clients, matters and operations, as well as all referral of legal work to associates of Robert Adelson.  Since 1/1/2020, the firm’s offices have been and remain at 101 Federal Street, 19^th Floor, across the street from the pre-2020 offices at One Federal Street, 21^st Floor, in Boston’s Financial District.

IP Ownership as Leverage for Founder Equity Negotiations

One week ago yesterday, on Sunday May 28, 2023, CEOWorld magazine published an article I wrote on “IP Ownership as Leverage for Founder Equity Negotiations.”

This new article is designed for CEOs and C-level executives, who are also company founders, who have relinquished control of the company in favor of greater growth but where you now find yourself out-lawyered by investors, ending up with terms that result in loss of much of the equity value you expected to receive and hold.

This article discusses how intellectual property that you developed, that has in the past and continues to form an integral part of your company’s value and identity, and which you my potentially still have ownership claims, can be tapped into and leveraged to protect your interests, rights and distribution share in the success of the company you founded or co-founded, in connection with any of these important events that presage organic changes in the company –

• Significant round of funding,
• IPO — the company’s first public offering or its shares
• Merger, acquisition or sale of significant assets .

For any of those events, if the founder can raise a potential cloud over the company’s title to its core IP, this can provide leverage for an equitable adjustment to assure the owner’s fair share of the proceeds of the success event.

To see my full CEOWORLD magazine. article, go to LINK: https://ceoworld.biz/2023/05/28/ip-ownership-as-leverage-for-founder-equity-negotiations/

Or on my website at https://www.executiveemploymentattorney.com/ip-ownership-as-leverage-for-founder-equity-negotiations/

This was my 42nd article published in CEOWORLD since 2016. Previously, the editor advised that I can use “Featured in the CEOWORLD magazine” and the CEOWORLD “Logo” on my website and add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field.

On its own initiative, CEOWORLD magazine created on their website a library of Robert Adelson published articles. You can peruse this library and/or read as many of my 41 published articles as you wish. See https://ceoworld.biz/author/robert-adelson/

With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs, CFOs, CIOs, senior management executives, business leaders, and high net worth individuals worldwide. https://www.linkedin.com/company/ceomagazine/

It is my hope that this article will be of benefit to CEOs, C-level and senior executives who are company founders and who seek leverage in negotiations after seeing diminished value to your equity position as result of vesting, re-vesting, participating preferred, investor anti-dilution and other investor-friendly terms that have worked to your disadvantage and might have a self-help remedy in IP ownership. If you or any colleague of yours has a need in this area, please do reach out to me @ 617–875–8665 or rob@attorneyadelson.com. 

Merits of RSUs vs Stock Options and Other Forms of Executive Equity Compensation

Eight days ago, on Monday March 30, 2022, the executive career advancement website IvyExec published an article I wrote on “Merits of RSUs vs Stock Options and Other Forms of Executive Equity Compensation.”

This new article is designed not only for C-level and senior executives, but even for many directors and mid-level executives. 

My article discusses a less well known form of executive equity RSUs – restricted stock units, including these subjects: 

• What are RSUs?
• How are RSUs different from the more common forms of executive equity, stock options and restricted stock?
• How are RSUs taxed in ways different than stock options and restricted stock?
• In what situations are RSUs an attractive executive equity choice? 
• In what situations are other choices preferable for the executive?

To see my full IvyExec  article, go to LINK: https://www.ivyexec.com/career-advice/2022/merits-of-rsus-vs-stock-options-and-other-forms-of-executive-equity-compensation/

Or my website at https://www.executiveemploymentattorney.com/merits-of-rsus-vs-stock-options-and-other-forms-of-executive-equity-compensation/

IvyExec hosts articles and webinars from experts in the career, leadership, and business spaces who wish to share their knowledge with our audience.  In April 2021, I was invited to write for IvyExec since it seeks original content on the topics of career development, leadership, and business strategy as it applies to senior-level and C-Suite professionals.  IvyExec blog posts and webinars are shared with its community of more than 2 million members on its website, in its newsletter, and on its social media channels. https://www.ivyexec.com/career-advice/write-for-us/

IvyExec claims a “Community of 2.5M+ Leaders”.

It is my hope that this article will be of benefit to  C-level, senior and even lower level executives who are now or may in the future be negotiating over equity as part of their executive compensation and are not confident the stock price will rise and might even decline, and would like an alternative form of equity that can retain some value in cases where “underwater” stock options become worthless.

Phantom Stock as Executive Compensation for Family Businesses

One week ago, on Wednesday September 1, 2021, the website Ivy Exec published under “Business Strategy” an article I wrote on “Phantom Stock as Executive Compensation for Family Businesses.”

This new article is designed not only for C-level and senior executives, but even for many directors and mid-level executives, who currently work in a family business or are offered a position in a family business and received NO executive equity compensation because most family businesses do not issue equity to non-family members.

My article discusses the use of phantom stock as a mean to give the executive a substitute to equal for him or her all the benefits of stock, options or RSUs. This technique also benefits the family business by not only avoiding use of actual stock and offering a key executive recruitment / retention tool but also providing a technique where all payments are tax deductible.

The technique is highly beneficial to CEOs and senior executives because it not only gives him or her a meaningful stake in the growth of the company, but also offers the possibility for capital gains level taxation, plus a liquidity feature often missing in stock plans of private companies.

To see my full IvyExec Career Advice website article, go to

 LINK: https://www.ivyexec.com/career-advice/2021/phantom-stock-as-executive-compensation-for-family-businesses/

Or https://www.executiveemploymentattorney.com/phantom-stock-as-executive-compensation-for-family-businesses/

IvyExec hosts articles and webinars from experts in the career, leadership, and business spaces who wish to share their knowledge with our audience. In April 2021, I was invited to write for IvyExec since it seeks original content on the topics of career development, leadership, and business strategy as it applies to senior-level and C-Suite professionals. IvyExec blog posts and webinars are shared with its community of more than 2 million members on its website, in its newsletter, and on its social media channels. https://www.ivyexec.com/career-advice/write-for-us/

It is my hope that this article will be of benefit to C-level and senior executives who have the opportunity or should have the opportunity to gain an equity stake in the family businesses that their management skills and efforts or helping to build, so that you along with the family owners can share in the benefits of that company growth.

Family business owners do have good reason to avoid taking on minority owners, but that does not mean you, as the non-family executive, need to be deprived of the kind of equity or equity-like stake you would receive in a non-family business. My article suggests a way to do this — to the benefit of the non-family executive and the family business owners too. Feel free to tweet or share this article. If you or any colleague of yours has a need in this area, please do reach out to me.

Achieving Zero Taxation on Sale of Your Startup Equity

Last Thursday, on September 3, 2020, CEOWorld magazine published an article I wrote on “Achieving Zero Taxation on Sale of Your Startup Equity”. 

This new article is designed for CEOs, C-level and senior executives, who are considering taking a position in a startup or early stage company in life sciences, tech, e-commerce or another high growth area of the economy, where executive equity may comprise a major part of your compensation package.

My article discusses how taking equity in qualified small business stock may enable you to have zero Federal taxation on all or most of your appreciation on a sale of shares after 5 years.  That exclusion from tax applies to not only the Federal capital gains tax but also the net investment income tax and the alternative minimum tax (AMT), on appreciation up to $10 million or 10x your adjusted tax basis in the stock, whichever is greater.

The article also includes a number of important tips to qualify your shares for this tax exclusion on sale, including the following:

• Obtain stock not options – only actual stock issued will qualify as QSBS and start your holding period to qualify for tax free treatment;

• Making a Section 83(b) tax election for QSBS to eliminate ordinary income as well as capital gains tax,

• Assuring the business is qualified, including that the business is still under $50 million in gross assets when QSBS are issued to you, and

• Planning your roll-over if needed to meet the 5-year holding period even if you sell your shares within that period.

To see my full CEOWorld magazine. article, go to LINK:

https://ceoworld.biz/2020/09/03/achieving-zero-taxation-on-sale-of-your-startup-equity/

Or https://www.executiveemploymentattorney.com/achieving-zero-taxation-on-sale-of-your-startup-equity/

This was my 29th article published in CEOWORLD.  Previously, the editor advised that I can use “Featured in the CEOWORLD magazine” and the CEOWORLD “Logo” on my website and add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field. For a library of my past article published by CEOWORLD, see https://ceoworld.biz/author/robert-adelson/

With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs,CTOs, COOs, CIOs, CTO/CSOs, senior management executives, business leaders, and high net worth individuals worldwide.

It is my hope that this article on eliminating taxation on all or most of the appreciation on early stage or high growth stock a CEO or other C-level or senior executive receives as part  of your executive compensation package may be of benefit to those currently or in the future negotiating their executive compensation and equity package, or renegotiating in a retention situation. If you or any colleague of yours has a need in this area, please do reach out to me at rob@attorneyadelson.com.