Performance-Based Vesting Option Clause Samples
A Performance-Based Vesting Option clause establishes that the vesting of certain equity or stock options is contingent upon the achievement of specific performance targets or milestones. Typically, this means that employees or stakeholders will only earn the right to exercise their options if predefined business goals, such as revenue targets or project completions, are met within a set timeframe. This clause incentivizes recipients to focus on key objectives and aligns their interests with the company's success, ensuring that rewards are tied directly to measurable performance outcomes.
Performance-Based Vesting Option. Subject to the approval of the Board, the Company shall grant to Executive one or more performance-based vesting options, to be evidenced by the Stock Option Agreement most recently approved for use by the Board and pursuant to the terms and conditions set forth herein. In the event that Executive is granted an IPO Option pursuant to Section 4.4(a)(iii) hereof, Executive shall not be granted any performance-based vesting options pursuant to this Section 4.4(a)(ii).
(A) Subject to Executive’s continued employment with the Company through the date of grant, upon return to the Company’s investors as of the Employment Commencement Date of $210 million or more (which amount represents 200% of such investors’ invested capital as of the Employment Commencement Date) through one or more mergers, acquisitions, asset sales, joint ventures, dividends or otherwise (each, a “Return Event”), as determined by the Board in its sole discretion and subject to approval by the Board, Executive shall be granted a stock option (the “Initial Performance-Based Vesting Option”) to purchase a number of shares of the Company’s common stock representing ownership of three quarters of one percent (0.75%) of the total equity of the Company on a fully diluted basis as of the Employment Commencement Date. The Initial Performance-Based Vesting Option shall be fully vested at the time of grant; and
(B) Subject to Executive’s continued employment with the Company through the date of grant, upon return to the Company’s investors as of the Employment Commencement Date of $420 million or more (which amount represents 400% of such investors’ invested capital as of the Employment Commencement Date) through one or more Return Events, as determined by the Board in its sole discretion and subject to approval by the Board, Executive shall be granted a stock option (the “Second Performance-Based Vesting Option,” and together with the Initial Performance-Based Vesting Option, the “Performance-Based Vesting Options”) to purchase a number of shares of the Company’s common stock representing ownership of an additional three quarters of one percent (0.75%) of the total equity of the Company on a fully diluted basis as of the Employment Commencement Date, The Second Performance-Based Vesting Option shall be fully vested at the time of grant.
Performance-Based Vesting Option. Subject to approval of the Board or a duly authorized committee thereof, Employee will be issued a second option (the “Performance-Based Vesting Option”, and together with the Time-Based Vesting Option, the “New Options”) to purchase 476,483 shares of the Company’s common stock pursuant and subject to the Plan and the Company’s standard form of Stock Option Agreement between Employee and the Company. Subject to the approval of the Board or a designated committee thereof, the Performance-Based Vesting Option will vest and become exercisable according to the following schedule: following achievement and approval by the Board of the first Bonus Accelerator (for calendar year 2014) (as set forth on Exhibit B attached hereto), 100% of the Performance-Based Vesting Option shares will vest in equal 1/48th installments at the end of each month commencing after the above-referenced Board approval of the first Bonus Accelerator (e.g., beginning in January 2015) and continuing over the following four (4) years subject to Employee’s Continuous Status as an Employee, Consultant or Non-Employee Director with the Company on such dates. If the 2014 Bonus Accelerator is not achieved but a subsequent year Bonus Accelerator (e.g. for calendar year 2015) is achieved and approved by the Board, then 100% of the Performance-Based Vesting Option shares will begin to vest in equal 1/48th installments at the end of each month commencing after the above-referenced Board approval (e.g. beginning in January 2016) and continuing over the following four (4) years subject to Employee’s Continuous Status as an Employee, Consultant or Non-Employee Director with the Company on such dates. In the event that no Bonus Accelerator is achieved by December 31, 2017, the Performance-Based Vesting Option shall expire in its entirety on that date. The Performance-Based Vesting Option shall be an incentive stock option to the extent permissible under Section 422 of the Internal Revenue Code and will have an exercise price per share based upon the fair market value of the Company’s common stock on the date of grant, based on a third party valuation report approved by the Board.
Performance-Based Vesting Option. Subject to approval of the Board, the Company shall grant to Executive a performance-based vesting option (the “Performance-Based Vesting Option”) with terms and conditions substantially similar to the terms and conditions set forth in the stock option agreement attached hereto as Exhibit C.
Performance-Based Vesting Option. The Company has granted to Executive 1,244,690 options to purchase the Company’s common stock (the “Performance Based Option”) which represents ownership of one and a half percent (1.50%) of the total equity of the Company on a fully diluted basis as of the Employment Commencement Date and which vests and becomes exercisable pursuant to the terms and conditions of that Notice of Grant of Stock Option and Stock Option Agreement identified by Grant Number A0552 with a grant date of February 5, 2013 (the “Performance Based Option Agreement”). The Executive and the Company agree that notwithstanding anything contained in the Performance Based Option Agreement to the contrary, that the Performance Based Option shall terminate and Executive will have no further rights to exercise the Performance Based Option effective at 5:00 pm Pacific time on the day immediately prior to the date that the Company’s common stock is first traded on a national securities exchange (the “Trading Date”) pursuant to a registration statement filed with, and declared effective by, the Securities and Exchange Commission under the Securities Act of 1933, as amended (an “IPO”).