STOCK-FOR-STOCK

1. In mergers and acquisitions, exchange of an acquiring firm’s stock for the target company’s stock at a predefined rate. Normally, only a portion of a merger is completed with this deal, with the remaining costs will be covered with cash or through other payment methods.

2. In executive compensation, the process of satisfying the option price in an employee stock option compensation scheme. Employees are granted stock options but must pay the option price to the company before they can take the grant. By exchanging mature stock, the grantee can receive his options without paying for those. After a specific time period, grantees get back the stock they used for paying their options.