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In the context of stock compensation, a rollover occurs when stock options, restricted stock, and/or other equity grants issued to employees of an acquired company are converted in some way (or "rolled over") into the same type of grants in the buyer. Technically, this occurs through either an assumption or a substitution of the target company's outstanding stock grants. Usually the exchange ratio for the rollover is the same as that used to convert shares. A rollover is opposed to a cashout, in which the acquiring company does not assume the target's stock grants and instead gives the employees payments equivalent to the value of the grants. For details, see the section M&A: Impact on this website.

Another use of the noun rollover occurs in the context of employee stock purchase plans when unused funds from one offering or purchase period are rolled over into the next. This can happen only in limited situations, as explained in an FAQ on this website.

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