Treatment of Stock Options and Other Stock-based Compensation Clause Samples
The "Treatment of Stock Options and Other Stock-Based Compensation" clause defines how stock options, restricted stock units, and similar equity-based awards are handled in the context of the agreement, such as during a merger, acquisition, or employee departure. It typically outlines whether these awards will vest immediately, be assumed by a new entity, or be cashed out, and may specify the treatment of both vested and unvested portions. This clause ensures clarity for both the company and recipients regarding their rights and obligations, preventing disputes and misunderstandings about the fate of equity compensation in various scenarios.
Treatment of Stock Options and Other Stock-based Compensation. (a) At the Effective Time, each option to acquire shares of Company Common Stock (each, a "Company Stock Option") that is outstanding immediately prior to the Effective Time and is then vested or exercisable or becomes vested as a result of the transactions contemplated by this Agreement, shall be, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company, the holder of that Company Stock Option or any other Person, cancelled and converted into the right to receive from Parent and the Surviving Corporation, as promptly as reasonably practicable after the Effective Time, an amount in cash, without interest, equal to the product of (x) the aggregate number of shares of Company Common Stock subject to such Company Stock Option, multiplied by (y) the excess, if any, of the Merger Consideration over the per share exercise price under such Company Stock Option, less any Taxes required to be withheld in accordance with Section 3.05.
(b) At the Effective Time, each restricted stock unit award and other right, contingent or accrued, to acquire or receive shares of Company Common Stock or benefits measured by the value of such shares, and each award of any kind consisting of shares of Company Common Stock that may be held, awarded, outstanding, or payable under any Company Stock Plan (as defined below), other than Company Stock Options (each, a "Company Stock Award") immediately prior to the Effective Time and which is then vested or exercisable or becomes vested as a result of the transactions contemplated by this Agreement, shall be, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company, the holder of that Company Stock Award or any other Person, cancelled and converted into the right to receive from Parent and the Surviving 26995100v.1 Corporation, as promptly as reasonably practicable after the Effective Time, an amount in cash, without interest, equal to the product of (x) the aggregate number of shares of Company Common Stock in respect of such Company Stock Award multiplied by (y) the excess, if any, of the Merger Consideration over any applicable strike price or other amount required to be paid with respect to such Company Stock Award (if any), less any Taxes required to be withheld in accordance with Section 3.05.
(c) At or prior to the Closing Date, the Company Board and the compensation committee of such Company Board, as applicable, shall cause each Company Stock Plan to be termi...
Treatment of Stock Options and Other Stock-based Compensation. (a) The Target will take all requisite action so that, at the Effective Time, each option to acquire shares of Target Common Stock (each, a “Target Stock Option”) that is outstanding immediately prior to the Effective Time, whether or not then vested or exercisable, will be, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Target, the holder of that Target Stock Option or any other Person, cancelled and converted into the right to receive from Parent and the Surviving Corporation, as promptly as reasonably practicable after the Effective Time, an amount in cash, without interest, equal to the product of (i) the aggregate number of shares of Target Common Stock subject to such Target Stock Option, multiplied by (ii) the excess, if any, of the Merger Consideration over the per share exercise price under such Target Stock Option (the aggregate amount, the “Option Consideration”), less any Taxes required to be withheld in accordance with Section 4.05. In the event that the per share exercise price under such Target Stock Option is equal to or greater than the Merger Consideration, such Target Stock Option shall be cancelled as of the Effective Time without payment therefor and shall have no further force or effect.
(b) The Target will take all requisite action so that, at the Effective Time, each restricted stock unit award and other right, contingent or accrued, to acquire or receive shares of Target Common Stock or benefits measured by the value of such shares, and each award of any kind consisting of shares of Target Common Stock that may be held, awarded, outstanding, payable or reserved for issuance under any Target Stock Plan, other than Target Stock Options (each, a “Target Stock Award”) immediately prior to the Effective Time, whether or not then vested or exercisable, will be, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Target, the holder of that Target Stock Award or any other Person, cancelled and converted into the right to receive from Parent and the Surviving Corporation, as promptly as reasonably practicable after the Effective Time, an amount in cash, without interest, equal to the product of (i) the aggregate number of shares of Target Common Stock in respect of such Target Stock Award multiplied by (ii) the Merger Consideration (the aggregate amount, the “Stock Award Consideration”), less any Taxes required to be withheld in accordance with Section 4.05.
(c) At or ...
Treatment of Stock Options and Other Stock-based Compensation. (a) As of the Effective Time, each option to acquire Company Shares (each, a “Company Stock Option”) that is outstanding under any Company Stock Plan immediately prior to the Effective Time, whether or not then vested or exercisable, shall be, by virtue of the Merger and without any action on the part of the holder thereof, or any other Person, be exchanged by the Parent for a Parent Stock Option (each, a “Replacement Option”) in accordance with this Article 3. Each such Replacement Option as so exchanged and issued shall continue to have, and shall be subject to, substantially the same terms and conditions as applied to the Company Stock Option immediately prior to the Effective Time, subject to any Exchange requirements. As of the Effective Time, each such Replacement Option as so exchanged shall be an option to acquire that number of whole Parent Shares (rounded down to the nearest whole share) equal to the product of:
(i) the number of Company Shares subject to such Company Stock Option; and
(ii) the Exchange Ratio, at an exercise price per Parent Share (rounded up to the nearest whole cent) equal to the quotient obtained by dividing (A) the exercise price per share of Company Shares of such Company Stock Option by (B) the Exchange Ratio; provided, that the exercise price and the number of Parent Shares subject to the Replacement Option shall be determined in a manner consistent with the requirements of Section 409A of the Code, and, in the case of Company Stock Options that are intended to qualify as incentive stock options within the meaning of Section 422 of the Code, consistent with the requirements of Section 424(a) of the Code.
(b) The Company shall take all requisite action so that, at the Effective Time, each Company Share subject to vesting, repurchase, or other lapse of restrictions (a “Company Restricted Share”) that is outstanding under any Company Stock Plan as of immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be assumed by the Parent and shall be converted into a Parent Restricted Share in accordance with this Section 3.6. Each Parent Restricted Share shall continue to have and be subject to substantially the same terms and conditions as were applicable to such Company Restricted Share immediately before the Effective Time (including vesting, repurchase, or other lapse restrictions), subject to any Exchange requirements. As of the Effective Time, each such h...
Treatment of Stock Options and Other Stock-based Compensation. (a) The Company shall take all requisite action so that, at the Effective Time, each warrant and option to acquire shares of Company Stock that is outstanding immediately prior to the Effective Time, whether or not then vested or exercisable, shall be, without any action on the part of Parent or Merger Sub, cancelled and extinguished.
(b) The Company shall take all requisite action so that, at the Effective Time, each restricted stock unit award and other right, contingent or accrued, to acquire or receive shares of Company Stock or benefits measured by the value of such shares, and each award of any kind consisting of shares of Company Stock that may be held, awarded, outstanding, payable or reserved for issuance under any stock incentive plan, immediately prior to the Effective Time, whether or not then vested or exercisable, shall be, without any action on the part of Parent or Merger Sub, cancelled and extinguished.
(c) At or prior to the Effective Time, the Company, the Company Board and the compensation committee of such board, as applicable, shall adopt any resolutions and take any actions (including obtaining any employee consents) that may be necessary to effectuate the provisions of paragraphs (a) and (b) of this Section 3.08.
Treatment of Stock Options and Other Stock-based Compensation. (a) Prior to the Effective Time, the Company shall take such actions as may be necessary to provide that each option to acquire shares of the Company Common Stock or Company Preferred Stock (each, a “Company Stock Option”) then outstanding under the Company Stock Plan, as well as any arrangement for the issuance of Company Stock Options not covered by the Company Stock Plan, shall be of no further force or effect as of the Effective Time (either because such Company Stock Option shall have been exercised prior to the Effective Time or shall have been otherwise cancelled and terminated (without regard to the exercise price of the Company Stock Options) as of or prior to the Effective Time).
(b) At or prior to the Effective Time, the Company Stock Plan shall be terminated and of no further force or effect.
(c) Without limiting the foregoing, the Company shall take such actions as may be necessary to ensure that the Company will not, at the Effective Time, be bound by any options, stock appreciation rights, or other rights or agreements which would entitle any Person, other than the Parent and its Subsidiaries, to own any capital stock of the Company or the Surviving Corporation or to receive any payment in respect thereof.
Treatment of Stock Options and Other Stock-based Compensation. (a) To the extent required by the applicable Company Stock Plans, each option to acquire shares of Company Common Stock (each, a “Company Stock Option”) that is outstanding immediately prior to the Effective Time, whether or not then vested or exercisable, shall be as of the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company, the holder of that Company Stock Option or any other Person, cancelled and converted into the right to receive from Parent and the Surviving Corporation, as promptly as reasonably practicable after the Effective Time, an amount in cash, without interest, equal to the product of (x) the aggregate number of shares of Company Common Stock subject to such Company Stock Option, multiplied by (y) the excess, if any, of the Merger Consideration over the per share exercise price under such Company Stock Option, less any Taxes required to be withheld in accordance with Section 2.03 (the “Option Consideration”).
(b) At or prior to the Effective Time, the Company, the Company Board and the compensation committee of such Company Board, as applicable, shall adopt any resolutions and take any actions (including obtaining any employee consents) that may be necessary to effectuate the provisions of paragraph (a) of this Section 2.05.
(c) The Option Consideration shall be paid by the Surviving Corporation to each holder of a Company Stock Option entitled thereto in full satisfaction of all rights of such holder under such Company Stock Options as promptly as practicable following the Effective Time upon surrender of such holder's Company Stock Option agreement(s) to Parent and execution of a receipt and such other documents as the Surviving Corporation shall reasonably request.
Treatment of Stock Options and Other Stock-based Compensation. (a) The Company shall take all requisite action so that, at the Effective Time:
(i) each Company Stock Option granted under any of the Company Incentive Equity Plans that is outstanding immediately prior to the Effective Time and that is “out-of-the-money” (i.e., the Merger Consideration is equal to or less than the exercise price of such Company Stock Option) at the Effective Time will automatically be cancelled and retired and will cease to exist, and no consideration will be delivered in exchange therefor, and
(ii) each vested (including automatic accelerated vesting pursuant to the terms of such Company Stock Option as a result of the transactions contemplated herein) or unvested Company Stock Option that is outstanding immediately prior to the Effective Time and that is “in-the-money” (i.e., the Merger Consideration is higher than the exercise price of such Company Stock Option) at the Effective Time will be, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company, the holder of that Company Stock Option or any other Person, cancelled and converted into the right to receive from Parent and the Surviving Entity, as promptly as reasonably practicable after the Effective Time, an amount in cash, without interest, equal to the product of (x) the aggregate number of shares of Company Common Stock subject to such Company Stock Option, multiplied by (y) the excess of the Merger Consideration over the per share exercise price under such Company Stock Option, less any Taxes required to be withheld in accordance with Section 3.05. Further, for the avoidance of doubt, by adopting this Agreement, all members of the Company Board have confirmed their agreement that any Company Stock Options that they hold immediately prior to the Effective Time shall be treated in the same manner as described above, as applicable.
(b) The Company shall take all requisite action so that, at the Effective Time:
(i) each Restricted Stock Award and each Company Performance Share Award that is vested at the Effective Time (including automatic accelerated vesting pursuant to the terms of such Restricted Stock Award or Company Performance Share Award as a result of the transactions contemplated herein) will be, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company, the holder of that Restricted Stock Award or Company Performance Share Award or any other Person, cancelled and converted into the right to receive ...
Treatment of Stock Options and Other Stock-based Compensation. (a) The Company shall take all requisite action so that, at the Effective Time, each option to acquire shares of Company Common Stock (each, a "Company Stock Option") that is outstanding immediately prior to the Effective Time, whether or not then vested or exercisable, shall be, by virtue of the Merger and without any action on the part of Parent, Merger Subsidiary, the Company, the holder of that Company Stock Option or any other Person, cancelled and converted into the right to receive from Parent and the Surviving Corporation, as promptly as reasonably practicable after the Effective Time, an amount in cash, without interest, equal to the product of (x) the aggregate number of shares of Company Common Stock subject to such Company Stock Option, multiplied by
Treatment of Stock Options and Other Stock-based Compensation