An acquiring company's use of its stock plan and shares to replace outstanding stock grants in the target company. The selling company's grants are canceled, and grants under the acquirer's plan are substituted in their place. Consequently, when employees exercise stock options or SARs, or when their restricted stock/RSUs vest, they receive stock in the acquirer. A substitution contrasts with an assumption, in which the acquirer merely continues the seller's outstanding stock grants. For details, see the FAQS in the section M&A: Impact on this website.