Legal Question in Employment Law in California

Hey can anyone explain to me what this really means?

(A) In the case of and subject to the consummation of a Sale Event, all unvested Restricted Stock Awards issued hereunder shall be forfeited immediately prior to the effective time of any such Sale Event unless assumed or continued by the successor entity, or awards of the successor entity or parent thereof are substituted therefor, with an equitable or proportionate adjustment as to the number and kind of shares subject to such awards as such parties shall agree.


Asked on 8/26/16, 1:30 pm

1 Answer from Attorneys
Robert F. Cohen Law Office of Robert F. Cohen

This might be an oversimplification, but I'll try. The agreement probably defines "Sales Event" in a specific way, but generally, here's what it probably means: If the company is sold, any Restricted Stock Awards (probably stock options) that haven't been exercised (converted into stock) before that time will no longer exist. However, the buyer might agree to continue them or substitute them for its own stock awards (options). This might require agreement between the new owner and the employee or contractor.

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Answered on 8/26/16, 3:23 pm


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