{"componentChunkName":"component---src-templates-blog-post-ts","path":"/adjustment-clause-in-a-stock-option-plan-allows-flexibility-for-future-change/","result":{"data":{"site":{"siteMetadata":{"title":"Clausehound Blog","author":"Joshua Koudys"}},"markdownRemark":{"id":"ee92fa32-c312-5005-9c9b-8ed9fc6ad351","excerpt":"Triton Emission Solutions appointed a new director and Chairman of the Board. His compensation included a stock option plan. The options were exercisable at…","html":"<p>Triton Emission Solutions appointed a new director and Chairman of the Board. His compensation included a stock option plan. The options were exercisable at $.50 per share. The stock option plan provided that: “The exercise price is subject to adjustment in the event that the Company subsequently issues any shares of its common stock or any options, warrants, convertible instruments or similar instruments at a purchase, exercise or conversion price less than $0.50 per share.”</p>\n<p>This <strong>adjustment clause</strong> permits the exercise price of the options to be capped at $.50, but to be reduced should the share price fall. This acts as an incentive to the employee/executive to contribute to the profitability of the company (to enhance the share price). Without the adjustment clause, the ESOP would no longer act as an incentive for the employee to remain with the company, should the share price drop below the exercise price.</p>\n<p><a href=\"https://www.marketwatch.com/investing/stock/dsox/SecArticle?countryCode=US&#x26;guid=14043097&#x26;type=1\" target=\"_blank\" rel=\"nofollow noopener\">Read the article here.</a></p>\n<h3>Takeaway:</h3>\n<ul>\n<li>ESOP adjustment clauses maintain the effectiveness of the plan should share prices drop below the original exercise price.</li>\n</ul>","frontmatter":{"title":"Adjustment Clause in a Stock Option Plan Allows Flexibility for Future Change","date":"January 17, 2016","description":"Triton Emission Solutions appointed a new director and Chairman of the Board. His compensation included a stock option plan.","author":{"id":"rajah@cobaltcounsel.com","first":"Rajah","last":"Lehal","bio":"Rajah Lehal is Founder and CEO of Clausehound.com.  Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.","image":{"childImageSharp":{"fluid":{"base64":"data:image/jpeg;base64,/9j/2wBDABALDA4MChAODQ4SERATGCgaGBYWGDEjJR0oOjM9PDkzODdASFxOQERXRTc4UG1RV19iZ2hnPk1xeXBkeFxlZ2P/2wBDARESEhgVGC8aGi9jQjhCY2NjY2NjY2NjY2NjY2NjY2NjY2NjY2NjY2NjY2NjY2NjY2NjY2NjY2NjY2NjY2NjY2P/wgARCAAUABQDASIAAhEBAxEB/8QAGAABAAMBAAAAAAAAAAAAAAAAAAIDBQT/xAAWAQEBAQAAAAAAAAAAAAAAAAAAAgP/2gAMAwEAAhADEAAAAboK870hU4HaFoP/xAAbEAEBAQACAwAAAAAAAAAAAAACAQMABBEhMv/aAAgBAQABBQLZ0DJXzzsfOHtcqtrVlGqp/8QAFBEBAAAAAAAAAAAAAAAAAAAAIP/aAAgBAwEBPwEf/8QAFREBAQAAAAAAAAAAAAAAAAAAASD/2gAIAQIBAT8BY//EAB0QAAICAQUAAAAAAAAAAAAAAAEhABEQAhIxQVH/2gAIAQEABj8CXJgvXuvA9nWLJcsJAqOf/8QAGxAAAgMBAQEAAAAAAAAAAAAAAREAIUFREDH/2gAIAQEAAT8hEPkifIrIYPgAmwaHZUKpzPAcw4PIYWoDkjn/2gAMAwEAAgADAAAAEDvXff/EABYRAQEBAAAAAAAAAAAAAAAAAAEQEf/aAAgBAwEBPxADGE//xAAWEQEBAQAAAAAAAAAAAAAAAAARARD/2gAIAQIBAT8QTDLn/8QAHRABAQEBAAIDAQAAAAAAAAAAAREAITFxQVFhof/aAAgBAQABPxBERBosSrNWnl4U/SabyrrjY+eesU1Qqo7Xg1wnR1H+PrIYPUA6nfZ3SAwyyXf/2Q==","aspectRatio":1,"src":"/static/d7bbad08c257f3987a4a5710553e9e17/bdd4d/Rajah.jpg","srcSet":"/static/d7bbad08c257f3987a4a5710553e9e17/2b9ee/Rajah.jpg 80w,\n/static/d7bbad08c257f3987a4a5710553e9e17/e5d64/Rajah.jpg 160w,\n/static/d7bbad08c257f3987a4a5710553e9e17/bdd4d/Rajah.jpg 320w,\n/static/d7bbad08c257f3987a4a5710553e9e17/6e63d/Rajah.jpg 400w","sizes":"(max-width: 320px) 100vw, 320px"}}}},"tags":["ESOP","Adjustments","Human Resources","Rajah","Options and Buyback"]}}},"pageContext":{"slug":"/adjustment-clause-in-a-stock-option-plan-allows-flexibility-for-future-change/","previous":{"fields":{"slug":"/background-ip-licensing-agreements-promote-innovation/"},"frontmatter":{"title":"Background IP Licensing Agreements Promote Innovation","tags":["Intellectual Property","Grant of Licence","Background Intellectual Property","Commercial Activities","Rajah"],"author":{"id":"rajah@cobaltcounsel.com","first":"Rajah","last":"Lehal"}}},"next":{"fields":{"slug":"/drag-along-provisions-how-when-why/"},"frontmatter":{"title":"Drag-along Provisions: How, When, Why","tags":["ESOP","Drag Along Right","Human Resources","Rajah"],"author":{"id":"rajah@cobaltcounsel.com","first":"Rajah","last":"Lehal"}}}}}}