Common use of Adjustment of Option Shares Clause in Contracts

Adjustment of Option Shares. The number of Option Shares shall be subject to adjustment as follows: (a) If the Company: (i) pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock; (ii) subdivides its outstanding shares of Common Stock into a greater number of shares; (iii) combines its outstanding shares of Common Stock into a smaller number of shares; (iv) makes a distribution on its Common Stock in shares of its capital stock other than Common Stock; or (v) issues by reclassification of its Common Stock any shares of its Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the surviving corporation), then the Option Shares immediately prior to such action shall be adjusted to apply to the aggregate number and kind of shares of Common Stock (or such shares of capital stock other than Common Stock) of the Company that the Company would have owned immediately following such action if the Company had exercised the Option immediately prior to such action. (b) The adjustment shall become effective on the record date in the case of a dividend or distribution and on the effective date in the case of a subdivision, combination or reclassification. (c) Whenever the number of Option Shares is adjusted under this Section 5, the Company shall promptly mail to the Stockholder a notice of such adjustment.