An example of "diminishment" of an outstanding option is tricky, but would NOT include:
A. Acquiring company accelerates and cashes out options of target company.
B. Acceleration of vesting and exercisability.
C. Modification that causes grant to lose ISO status.
D. Changing plan to make it more difficult to exercise.
Answer:B
An example of "diminishment" of an outstanding option is tricky, but would NOT include:
A. Acquiring company accelerates and cashes out options of target company. B. Acceleration of vesting and exercisability. C. Modification that causes grant to lose ISO status. D. Changing plan to make it more difficult to exercise.
Explanation: Answer b. is the only choice that does not reduce the benefit to the option holder. The other choices "diminish", or reduce the benefit to the option holder.