Equity Rollover Merger Agreement Clauses

Summary

These equity rollover clauses are for use in the merger agreement for a transaction in which certain stockholders of the target company—usually management— contribute some or all of their shares (rollover shares) to the acquirer in exchange for equity in the post-merger entity. These clauses include practical guidance and drafting notes. Equity rollover provisions in merger agreements take many forms throughout the document; the rollover may be prominently included in the preamble, representations and warranties, and covenants, or it may be addressed solely as a step in the merger closing process by describing the cancellation of the rollover shares. This template includes examples of provisions that appear in all such sections; you may choose those that best fit your transaction. Since these provisions are intended to be incorporated into the merger agreement, the terms and definitions contained in these provisions may need to be modified to conform with the definitions and terms in the merger agreement. For further discussion of equity rollovers, see Equity Rollover Commitments. For a full listing of related stock acquisition content, see Stock Acquisition Resource Kit. For a full listing of related private merger transaction content, see Private Merger Transaction Resource Kit.