Share Options important facts18 Mar 2021 22:11
1. Company has taken that decision to reduce the potential dilutive impact which would arise from the exercise of share options in order to optimise the potential upside of its value per ordinary share of the Company = Shareholders get more money per share IF sold (we would value be important in a JV.....
This ties in with something else - Unvested Options - acceleration downside
A buyer may be interested in acquiring your company, but the provisions in the option agreements may make your company a less attractive target. You may believe that accelerated vesting mandated by your agreement is a pro-employee feature of your stock plan. However, it can be a constraint, affecting how a deal is structured, as well as the costs to your company and the buyer. It can even cause the deal not to happen at all.
Buyers are concerned, for example, that accelerated vesting could cause valuable employees to leave after they cash-in from all their options right after the closing. Thus, options can lose their power as a retention tool. When agreements provide latitude to the board, or are silent, the strategic position of your company in negotiating with the acquiring company over the terms of the sale will often drive the terms of acceleration.
Essentially to keep this management in place AAL could have insisted they drop the options so they can keep them emplyed to carry on as they were rather than run for the hills.