Adjustments Clause Example from Business Contracts

Adjustments. Upon the occurrence of any of the following events, the Participant's rights with respect to the Option, except to the extent previously exercised shall be adjusted as hereinafter provided: A. Stock Dividends and Stock Splits. If (i) shares of common stock of the Company shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue any shares of common stock as a stock dividend on its outstanding common stock, or (ii) additional shares or new or differe...nt shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of common stock, the Shares deliverable upon the exercise of the Option shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made including, in the Purchase Price per Share to reflect such events. B. Corporate Transactions. If the Company is to be consolidated with or acquired by another entity in a merger, sale of all or substantially all of the Company's assets other than a 4 transaction to merely change the state of incorporation (a "Corporate Transaction"), the Board of Directors of the Company or, if applicable, a committee of the Board of Directors or the board of directors of any entity assuming the obligations of the Company hereunder (the "Successor Board"), shall, as to the unexercised portion of the Option, either (i) make appropriate provision for the continuation of the Option by substituting on an equitable basis for the Shares either the consideration payable with respect to the outstanding shares of common stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) upon written notice to the Participant, provide that the Option must be exercised, within a specified number of days of the date of such notice, at the end of which period the Option shall terminate (the Option shall for purposes of this clause (ii) be made fully vested and exercisable immediately prior to its termination); or (iii) terminate the Option in exchange for a cash payment equal to the excess of the Fair Market Value of the Shares over the Purchase Price thereof (the Option shall for purposes of this clause (iii) be made fully vested and immediately exercisable immediately prior to its termination). C. [RESERVED.] D. Recapitalization or Reorganization. In the event of a recapitalization or reorganization of the Company other than a Corporate Transaction pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of common stock of the Company, the Participant upon exercising the Option after the recapitalization or the reorganization shall be entitled to receive for the purchase price paid upon such exercise the number of replacement securities which would have been received if the Option had been exercised prior to such recapitalization or reorganization. E. Dissolution or Liquidation of the Company. Upon the dissolution or liquidation of the Company, the Option will terminate and become null and void; provided, however, that if the rights of the Participant or the Participant's Survivors have not otherwise terminated and expired, the Participant or the Participant's Survivors will have the right immediately prior to such dissolution or liquidation to exercise the Option to the extent that the Option is exercisable as of the date immediately prior to such dissolution or liquidation. View More