Conversion Stock Options Clause Samples
The Conversion Stock Options clause defines how stock options held by employees or other stakeholders are treated when a company undergoes a conversion event, such as a merger, acquisition, or financing round. Typically, this clause outlines whether existing options will convert into options for the new class of shares, be cashed out, or be subject to other adjustments, ensuring that option holders are treated fairly during the transition. Its core function is to provide clarity and predictability for both the company and option holders, preventing disputes and ensuring a smooth transition of equity interests during significant corporate changes.
Conversion Stock Options. The Committee may, in its sole discretion, grant a Stock Option to any holder of an option (hereinafter referred to as an "Original Option") to purchase shares of the stock of any corporation:
(a) the stock or assets of which were acquired, directly or indirectly, by the Company or any Subsidiary, or
(b) which was merged with and into the Company or a Subsidiary, so that the Original Option is converted into a Stock Option (hereinafter referred to as a "Conversion Stock Option"); provided, however, that such Conversion Stock Option as of the date of its grant (the "Conversion Stock Option Grant Date") shall have the same economic value as the Original Option as of the Conversion Stock Option Grant Date. In addition, unless the Committee, in its sole discretion determines otherwise, a Conversion Stock Option which is converting an Original Option intended to qualify as an ISO shall have the same terms and conditions as applicable to the Original Option in accordance with Code Section 424 and the Treasury Regulations thereunder so that the conversion (x) is treated as the issuance or assumption of a stock option under Code Section 424(a) and (y) is not treated as a modification, extension or renewal of a stock option under Code Section 424(h).
Conversion Stock Options. The Committee may, in its sole discretion and upon such terms and conditions as it deems appropriate, grant a Stock Option to any holder of an option (hereinafter referred to as an "Original Option") to purchase shares of the stock of any corporation:
(a) the stock or all or substantially all of the assets of which were acquired, directly or indirectly, by the Company or any Subsidiary, or
(b) which was merged with and into the Company or a Subsidiary, so that the Original Option is converted into a Stock Option (hereinafter referred to as a "Conversion Stock Option"); provided, however, that such Conversion Stock Option as of the date of its grant (the "Conversion Stock Option Grant Date ") shall have substantially the same economic value as the Original Option as of the Conversion Stock Option Grant Date.