What will happen with my company stock option when the stock split?

Question

Currently I have 10,000 company stock options valued at $50.00. Today the price of the stock is $62.00. If I exercise the company stock option today, I will get 10,000 * $12 = $120,000.00
If the company do a 2 to 1 stock split what will happen to my current stock options?

I meant Employee Stock Option Plan (ESOP) NOTcompany stock option.

Thanks zman492

Answer 1

I am assuming you are talking about an employee stock option plan (ESOP) and not listed options traded on an options exchange.

Usually an ESOP will have a provision to split options if the stock splits, which would mean your 10,000 $50 strike options would become 20,000 $25 strike options if the stock splits 2 for 1. However, that provision is not required by law and it is possible to have an ESOP without such a provision. You need to check with your Human Relations Department to be sure.

If there is not any such provision your options will not be adjusted and you certainly should exercise the options before the split occurs.

Answer 2

You'll get additional 10,000 shares..so your total shares will be 20,0000. Market value will probably be close to half of $62 per share or close to half of the market price before the stock split..

Answer 3

The stocks split as does the price value. So in your case your would have 20k stocks valued at $31.00.

Answer 4

You will have 20,000 options at 31.00 per share.