Common use of Cancellation of Options and Unvested Stock Clause in Contracts

Cancellation of Options and Unvested Stock. At the Effective Time, each then outstanding option (including stock purchase rights and unrestricted stock awards) to purchase or acquire shares of Company Common Stock under the Company's 1989 Senior Executive Stock Option Plan, 1989 Employee Incentive Stock Plan, Executive Incentive Stock Option Plan, 1994 Employee Incentive Stock Plan and 1994 Incentive Compensation Plan (collectively, the "Stock Option Plans"), or otherwise as set forth on Schedule 4.1(b), whether or not then exercisable or vested (collectively, the "Options"), and each share of not yet vested restricted stock granted under any such Stock Option Plan ("Unvested Stock") shall be (x) cancelled and shall represent the right to receive the following consideration in settlement thereof or (y) as may be otherwise agreed upon by Parent and the holder thereof, converted into an option to purchase shares as described in clause (ii) below, as follows: (i) as to all Options that are to be cancelled, for each share of Company Common Stock subject to such Option, including any additional shares subject thereto by reason of their terms upon consummation of the "change of control" resulting from the Merger, such holder shall receive an amount (subject to any applicable withholding tax) in cash equal to the difference between the per share Merger Consideration and the per share exercise price of such Option to the extent such difference is a positive number, (ii) as to the Options that are to be converted, each such Option shall be converted into an equivalent option to purchase a number of shares of common stock, par value $0.01, of Atrium Corporation upon expiration of the vesting periods, if any, currently applicable to such Options, and at the exercise price as agreed to by Parent and each such holder of Options (such amount in cash or such options received upon conversion as described in clauses (i) and (ii) above being hereinafter referred to as the "Option Consideration"), and (iii) as to the holders of Unvested Stock identified in Schedule 3.5(a), for each share of Unvested Stock, cash in an amount equal to the product of (x) the number of shares of Unvested Stock and (y) the per share Merger Consideration (such amount in cash being hereinafter referred to as the "Unvested Stock Consideration"); provided, however, that with respect to any person subject to Section 16(a) of the Exchange Act, any such Option Consideration or Unvested Stock Consideration shall not be payable until the first date payment can be made without liability to such person under Section 16(b) of the Exchange Act, but shall be paid as soon as practicable thereafter.

Cancellation of Options and Unvested Stock. At the Effective Time, each then outstanding option (including stock purchase rights and unrestricted stock awards) to purchase or acquire shares of Company Common Stock under the Company's 1989 Senior Executive Stock Option Plan, 1989 Employee Incentive Stock Plan, Executive Incentive Stock Option Plan, 1994 Employee Incentive Stock Plan and 1994 Incentive Compensation Plan (collectively, the "Stock Option Plans"), or otherwise as set forth on Schedule 4.1(b), whether or not then exercisable or vested (collectively, the "Options"), and each share of not yet vested restricted stock granted under any such Stock Option Plan ("Unvested Stock") shall be (x) cancelled canceled and shall represent the right to receive the following consideration in settlement thereof or (y) as may be otherwise agreed upon by Parent and the holder thereof, converted into an option to purchase shares as described in clause (ii) below, as follows: (i) as to all Options that are to be cancelledOptions, for each share of Company Common Stock subject to such Option, including any additional shares subject thereto by reason of their terms upon consummation of the "change of control" resulting from the Merger, such holder shall receive an amount (subject to any applicable withholding tax) in cash equal to the difference between the per share Merger Consideration and the per share exercise price of such Option to the extent such difference is a positive number, (ii) as to the Options that are to be converted, each such Option shall be converted into an equivalent option to purchase a number of shares of common stock, par value $0.01, of Atrium Corporation upon expiration of the vesting periods, if any, currently applicable to such Options, and at the exercise price as agreed to by Parent and each such holder of Options (such amount in cash or such options received upon conversion as described in clauses (i) and (ii) above being hereinafter referred to as the "Option Consideration"), and (iiiii) as to the holders of Unvested Stock identified in Schedule 3.5(a), for each share of Unvested Stock, cash in an amount equal to the product of (x) the number of shares of Unvested Stock and (y) the per share Merger Consideration (such amount in cash being hereinafter referred to as the "Unvested Stock Consideration"); provided, however, that with respect to any person subject to Section 16(a) of the Exchange Act, any such Option Consideration or Unvested Stock Consideration shall not be payable until the first date payment can be made without liability to such person under Section 16(b) of the Exchange Act, but shall be paid as soon as practicable thereafter. Upon consummation of the Offer, all Options shall immediately vest and become exercisable.