With an exit-based option scheme, team members only receive their shares in the organisation after the completion of any required vesting and an 'exit.'
In short, recipients only have the option to exercise when the business is sold, there's a change in control, or when another significant change in company structure occurs — alongside any time-based vesting schedules and performance milestones.
Exits are defined specifically in each option agreement, but typically include the following:
- The sale of your company to another
- A merger with another company
- A management buy-out
- A company buy-back
- A change in control
- An asset sale
- Partial or full floating on a public exchange
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