Restriction Period and Vesting Clause Example from Business Contracts

Restriction Period and Vesting. 3.1. Service-Based Vesting Condition. Except as otherwise provided in this Section 3, the Award shall vest in full on the earlier to occur of (a) the [ ] anniversary of the Grant Date and (b) the [ ] annual meeting of the Company's shareholders that occurs after the Grant Date, provided the Holder continuously serves as a Non-Employee Director through the applicable vesting date. The period of time prior to the vesting shall be referred to herein as the "Restriction Period." 3.2. Death or Disabi...lity. If the Holder's service as a Non-Employee Director terminates prior to the end of the Restriction Period by reason of the Holder's death or Disability (as defined herein), then a pro-rata portion of the Award shall vest upon such termination of service. For purposes of the foregoing sentence, a "pro-rata portion" shall mean the product of (x) the number of shares subject to the Award and (y) a fraction, the numerator of which is the number of days that have elapsed since the Grant Date through the date of termination of the Holder's service due to death or Disability, and the denominator of which is 365. The portion of the Award that does not vest in connection with such termination of service shall be immediately forfeited and cancelled by the Company. For purposes of this Agreement, "Disability" shall be as defined in U.S. Treasury Regulation §1.409A-3(i)(4). 3.3. Change in Control. Upon a Change in Control Event (as defined herein), the Restriction Period shall lapse and the Award shall become fully vested. For purposes of this Agreement, "Change in Control Event" shall be as defined in U.S. Treasury Regulation §1.409A-3(i)(5). 3.4. Termination of Service. If the Holder's service as a Non-Employee Director terminates prior to the end of the Restriction Period or prior to the occurrence of a Change in Control Event for any reason other than due to death or Disability, then the Award shall be immediately forfeited by the Holder and cancelled by the Company. View More