Template:Nutshell Equity Derivatives 3.4

Section 3.4. Automatic Exercise. If “Automatic Exercise” applies to an Option Transaction then (unless, by the Expiration Time on the Expiration Date Buyer notifies Seller that Automatic Exercise should not occur) each unexercised Option will be automatically exercised:

3.4(a) Cash Settlement: at the Expiration Time on the Expiration Date; and

3.4(b) Physical Settlement: if the Calculation Agent determines the Option to be In-the-Money at such time, as at the Expiration Time on the Expiration Date.

3.4(c) “In-the-Money” means

(i) for a Call, that

(A) the Reference Price is equal to or greater than the price for a Share at which any Related Exchange would automatically exercise a Physically-settled option with the Strike Price relating to such Share, or

(B) if no options relating to such Share are listed on any Related Exchange or no Related Exchange is specified in the related Confirmation, the Reference Price is greater than the Strike Price; and

(ii) in respect of a Put, that

(A) the Reference Price is equal to or less than the price for a Share at which any Related Exchange would automatically exercise a Physically-settled option with the Strike Price relating to such Share, or

(B) if no options relating to such Share are listed on any Related Exchange or no Related Exchange is specified in the related Confirmation, the Reference Price is less than the Strike Price.

3.4(d) “Reference Price” means the price per Share or amount per Basket determined as provided in the related Confirmation as of the Expiration Time on the Expiration Date or, if no means of determining such price or amount are so provided, in respect of a Share Option Transaction, the Relevant Price of the Share (for which purpose the Valuation Time and the Valuation Date will be the Expiration Time and the Expiration Date, respectively) and, in respect of a Share Basket Option Transaction, the sum of the values calculated as of the Expiration Time on the Expiration Date for the Shares of each Issuer as the product of the Relevant Price of such Share (for which purpose the Valuation Time and the Valuation Date will be the Expiration Time and the Expiration Date, respectively) and the relevant Number of Shares comprised in the Basket.