Conversion Awards. In accordance with GAAP, the number of shares of Heinz Common Stock and Spinco Common Stock subject to a Conversion Award and the exercise price per share of Heinz Common Stock and Spinco Common Stock subject to a Conversion Award shall be determined, as of the Close of the Distribution Date, in accordance with the following conversion formula: (A) The Aggregate Spread on each Heinz Option shall be maintained under each corresponding Conversion Award by setting the option exercise prices of the Conversion Award with respect to the shares of Heinz Common Stock and Spinco Common Stock subject to such Conversion Award, respectively, to ensure that the sum of the aggregate differences between (x) the Heinz Post-Distribution Stock Price and the Heinz Option exercise price and (y) the Spinco Post-Distribution Stock Price and Spinco Option exercise price, equals the Aggregate Spread. (B) In addition, each of (A) the ratio of the per share option exercise price of that portion of the Conversion Award that remains a Heinz Option to the Heinz Post-Distribution Stock Price, and (B) the ratio of the per share option exercise price of that portion of the Conversion Award that is a Spinco Option to the Spinco Post-Distribution Stock Price, shall be fixed in such a way that maintains the ratio of the per share exercise price of each Heinz Option that becomes a Conversion Award to the Heinz Pre-Distribution Stock Price. (C) The number of shares of Heinz Common Stock subject to a Conversion Award shall remain the same as the number of shares of Heinz Common Stock subject to the converted Heinz Option as in effect prior to the Close of the Distribution Date and the number of shares of Spinco Common Stock subject to a Conversion Award shall be equal to the number of shares of Heinz Common Stock subject to the converted Heinz Option as in effect prior to the Close of the Distribution Date.
Appears in 2 contracts
Sources: Employee Benefits Agreement (Heinz H J Co), Employee Benefits Agreement (Del Monte Foods Co)