Treatment of Equity Awards (a) The Company Board (or, if appropriate, a committee administering a Company equity incentive plan, inducement award program or other similar plan, program or arrangement under which equity awards or equity-based rights are outstanding (the “Company Equity Plans” and each such plan or program, a “Company Equity Plan”)) has adopted, or, as soon as practicable following the date hereof (and, in any event, prior to the Effective Time), shall adopt, resolutions providing that, as of the Effective Time:
(i) each option to acquire Shares, other than awards under the Company’s 2012 Employee Stock Purchase Plan (the “ESPP”) (each such option, a “Company Stock Option”), and each other equity award or right measured by the value of Shares (or pursuant to which Shares may be delivered) (including deferred units or similar rights or awards of non-employee directors), other than awards under the ESPP (collectively, “Company Equity Awards”), that is outstanding and unvested immediately prior to the Effective Time shall vest in full at the Effective Time;
(ii) each Company Stock Option that is outstanding immediately prior to the Effective Time that has an exercise price per Share that is less than the Merger Consideration shall be cancelled, without any action on the part of the holder of such Company Stock Option, and, in exchange therefor, the former holder of such cancelled Company Stock Option shall be entitled to receive (without interest), in consideration of the cancellation of such Company Stock Option, an amount in cash (less applicable tax withholdings pursuant to Section 3.6) equal to the product of (x) the total number of Shares subject to the unexercised portion of such Company Stock Option immediately prior to the Effective Time (determined after giving effect to the accelerated vesting described in Section 3.2(a)(i) above) multiplied by (y) the excess, if any, of the Merger Consideration over the applicable exercise price per Share under such Company Stock Option;
(iii) each Company Stock Option that is outstanding immediately prior to the Effective Time that has an exercise price per Share that is greater than or equal to the Merger Consideration shall be cancelled at the Effective Time, without any action on the part of the holder of such Company Stock Option, and the holder of such Company Stock Option shall not be entitled to receive any payment in exchange for such cancellation; and
(iv) each Company Equity Award, other than a Company Stock Option, that is outstanding immediately prior to the Effective Time shall be cancelled, and the former holder of such cancelled Company Equity Award shall be entitled, in exchange therefor, to receive (without interest) an amount in cash (less applicable tax withholdings pursuant to Section 3.6) equal to the product of (x) the total number of Shares subject to (or deliverable under) such Company Equity Award immediately prior to the Effective Time (determined after giving effect to the accelerated vesting described in Section 3.2(a)(i) above) multiplied by (y) the Merger Consideration.
(b) Subject to Section 3.6, Parent shall cause the Surviving Corporation to make all payments to former holders of Company Equity Awards required under Section 3.2(a) as promptly as practicable after the Effective Time, and in any event, no later than five (5) Business Days after the Effective Time, in accordance with the foregoing and the terms of the applicable Company Equity Plans pursuant to which such Company Equity Awards were issued.
(c) As soon as practicable following the date hereof, the Company shall take all actions with respect to the ESPP that are necessary to provide that (i) with respect to the Purchase Period (as defined in the ESPP) in effect on the date hereof (“Current Purchase Period”), no individual may enroll in the ESPP after the date hereof with respect to such Current Purchase Period and no participant may increase the percentage amount of his or her payroll deduction election from that in effect on the date hereof for such Current Purchase Period and (ii) no new offering period shall be commenced under the ESPP after the date hereof and prior to the Effective Time. If the Effective Time is expected to occur prior to the end of the Current Purchase Period, the Company shall take action to provide for an earlier exercise date (including for purposes of determining the Purchase Price (as defined in the ESPP) for the Current Purchase Period) (such earlier date, the “Early ESPP Exercise Date”). The Early ESPP Exercise Date shall be as close to the Effective Time as is administratively practicable. The Company shall suspend the commencement of any future Purchase Period (as defined in the ESPP) unless and until this Agreement is terminated and shall terminate the ESPP as of the Effective Time.
Equity Awards You will be eligible to receive awards of stock options or other equity awards pursuant to any plans or arrangements the Company may have in effect from time to time. The Board or Committee, as applicable, will determine in its sole discretion whether you will be granted any such equity awards and the terms of any such award in accordance with the terms of any applicable plan or arrangement that may be in effect from time to time.
Treatment of Company Equity Awards (a) At the Effective Time, each Company Option with a per share exercise price equal to or in excess of the Merger Consideration and that is outstanding and unexercised immediately prior to the Effective Time shall, without any action on the part of Parent, the Company or the holder thereof, cease to represent a right to acquire Company Ordinary Shares and shall be assumed and converted automatically into an option to purchase the number of shares of Parent Common Stock (each, an “Adjusted Option”) equal to the product obtained by multiplying (x) the number of Company Ordinary Shares subject to the Company Option immediately prior to the Effective Time, by (y) the Conversion Ratio, with any fractional shares rounded down to the nearest whole share. Each Adjusted Option shall have an exercise price per share of Parent Common Stock equal to (i) the per share exercise price for Company Ordinary Shares subject to the corresponding Company Option immediately prior to the Effective Time divided by (ii) the Conversion Ratio, rounded up to the nearest whole cent. Each Adjusted Option shall otherwise be subject to the same terms and conditions applicable to the corresponding Company Option under the applicable Company Equity Plan and the agreements evidencing grants thereunder, including vesting terms and terms related to the treatment upon termination of employment.
(b) At the Effective Time, each Company Option with a per share exercise price that is less than the Merger Consideration and that is outstanding and unexercised immediately prior to the Effective Time shall, without any action on the part of Parent, the Company or the holder thereof, be cancelled, with the holder of such Company Option becoming entitled to receive, in full satisfaction of the rights of the holder with respect thereto, an amount in cash equal to the product obtained by multiplying (i) the number of Company Ordinary Shares subject to such Company Option as of immediately prior to the Effective Time, by (ii) the excess of the Merger Consideration over the per share exercise price applicable to the Company Option.
(c) At the Effective Time, each Company RSU that is outstanding immediately prior to the Effective Time and that is held by a non-employee director of the Company will vest as of the Effective Time and shall, without any action on the part of Parent, the Company or the holder thereof, be cancelled, with the holder of such Company RSU becoming entitled to receive, in full satisfaction of the rights of such holder with respect thereto, the Merger Consideration in respect of each Company Ordinary Share subject to such Company RSU immediately prior to the Effective Time.
(d) Except as set forth on Section 2.3(d) of the Company Disclosure Letter, at the Effective Time, each Company RSU (other than any Company RSU covered by Section 2.3(c)) that is outstanding immediately prior to the Effective Time shall, without any action on the part of Parent, the Company or the holder thereof, be assumed and converted automatically into a restricted stock unit award with respect to a number of shares of Parent Common Stock (each, an “Adjusted RSU”) equal to the product obtained by multiplying (i) the total number of Company Ordinary Shares subject to the Company RSU immediately prior to the Effective Time by (ii) the Conversion Ratio, with any fractional shares rounded to the nearest whole share. Each Adjusted RSU shall otherwise be subject to the same terms and conditions applicable to the corresponding Company RSU under the applicable Company Equity Plan and the agreements evidencing grants thereunder, including vesting terms and terms related to the treatment upon termination of employment.
(e) At the Effective Time, each Company PSU that is outstanding immediately prior to the Effective Time shall, without any action on the part of Parent, the Company or the holder thereof, fully vest and be cancelled in consideration for the right to receive the Merger Consideration with respect to the number of Company Ordinary Shares equal to the number of Company Ordinary Shares subject to such Company PSU immediately prior to the Effective Time (with such number of Company Ordinary Shares determined based on (i) actual performance as determined by the Compensation and Talent Committee of the Company Board of Directors for any fully completed measurement period or performance period, as applicable, ended prior to the Effective Time to the extent the Compensation and Talent Committee of the Company Board of Directors can reasonably determine the level of achievement of performance for such completed measurement period or performance period, as applicable, prior to the Effective Time, and (ii) target performance for any measurement period or performance period, as applicable, for which performance has not previously been determined as provided in clause (i)).
(f) Parent shall cause the Company or the Company Subsidiaries to pay through the payroll system of the Surviving Company or one of its Subsidiaries (to the extent applicable) to each holder of a Company Option, Company RSU or Company PSU the amounts due to such holder under Section 2.3(b), Section 2.3(c), Section 2.3(d) and Section 2.3(e), as applicable, without interest and less such amounts as are required to be withheld or deducted under applicable Law with respect to the making of such payment, as promptly as practicable (but no later than two (2) Business Days) following the Effective Time; provided that the Merger Consideration with respect to any Company Equity Award that constitutes nonqualified deferred compensation subject to Section 409A of the Code shall be paid at the earliest time permitted under the terms of such award that will not result in the application of a Tax or penalty under Section 409A of the Code.
(g) Parent shall file or cause to be filed with the SEC, no later than the date on which the Effective Time occurs, a registration statement on a Form S-8 (or any successor form or other appropriate form, including a Form S-1 or Form S-3) relating to the shares of Parent Common Stock issuable with respect to the Adjusted Options and Adjusted RSUs. Parent shall use reasonable best efforts to maintain the effectiveness of such registration statement or statements (and maintain the current status of the prospectuses or prospectuses contained therein) for so long as such awards remain outstanding.
(h) Prior to the Effective Time, the Company shall take all actions and adopt all such resolutions as are necessary to effectuate the treatment of the Company Equity Awards as contemplated by this Section 2.3.
Restricted Stock Awards (i) The restricted shares of common stock of the Company awarded under this paragraph (c) (collectively, the “Restricted Shares”) shall be awarded pursuant to and, to the extent not expressly inconsistent herewith, governed by the Company stock option and incentive compensation plan as in effect as the effective date of the respective award (the “Stock Plan”). All grants described in this paragraph (c) shall be conditioned upon the approval of the shareholders of the Company at the annual shareholders’ meeting in 2008 of (A) an increase in the maximum number of shares that may be issued pursuant to awards under the Stock Plan, or (B) a new or amended plan authorizing grants of restricted shares of the Company. The number of Restricted Shares shall be adjusted in accordance with the terms of the Stock Plan for stock splits, stock dividends, recapitalizations and the like. Until and only to the extent the Restricted Shares shall vest as provided herein, all stock certificates evidencing the Restricted Shares owned by Employee shall be held by the Company for the benefit of Employee. As and to the extent any Restricted Shares shall vest as provided herein, the Company will promptly deliver certificates representing such vested shares to Employee.
(ii) Provided Employee shall continue to be employed hereunder, effective on July 15, 2008, the Company shall award to Employee 5,000 restricted shares of common stock of the Company. The restricted shares awarded as provided in the preceding sentence shall be referred to as the “Fixed Restricted Shares.” The Fixed Restricted Shares shall be subject to vesting as provided below. Provided Employee shall continue to be employed hereunder, one-fourth (1/4) of the Fixed Restricted Shares shall vest on June 1, 2009, an additional one-fourth (1/4) of the Fixed Restricted Shares shall vest on June 1, 2010, an additional one-fourth (1/4) of the Fixed Restricted Shares shall vest on June 1, 2011, and the final one-fourth (1/4) of the Fixed Restricted Shares shall vest on June 1, 2012.
(iii) Provided Employee shall continue to be employed hereunder, and further provided that the applicable Annual Performance Award Test (as defined below) has been satisfied, on the Performance Award Date (as defined below) each year during the Term, commencing in 2009, the Company shall award to Employee that number of shares of common stock of the Company as is equal to $100,000 divided by the Performance Award Price (as defined below), with any fractional share resulting therefrom being rounded up to one whole share if 0.5 or more and eliminated if less than 0.5. For each year, the “Performance Award Date” shall be that date the Company files its Annual Report on Form 10-K with the Securities and Exchange Commission for the immediately preceding calendar year. Satisfaction of the “Annual Performance Award Test” shall be determined as of each Performance Award Date and measured based upon the Company Net Income for the immediately preceding calendar year. The Annual Performance Award Test shall be satisfied for a calendar year if (A) the Annual Net Income Target for the calendar year being measured is at least ten percent (10%) higher than the actual Company Net Income for the immediately preceding calendar year, and (B) the actual Company Net Income for the calendar year being measured equals or exceeds ninety-five percent (95%) of the Annual Net Income Target for the calendar year being measured. The “Performance Award Price” shall be equal to the closing sale price of Company common stock as reported on the Nasdaq National Market on the respective Performance Award Date (or if the respective Performance Award Date is not a trading date for the Company common stock, on the immediately preceding trading date). Any Restricted Shares awarded pursuant to this subparagraph (iii) shall be immediately vested in full on the respective date such shares are awarded.
(iv) Notwithstanding any provision in this paragraph (c) to the contrary, all of the Restricted Shares that have not been previously vested shall immediately vest if Employee shall continue to be employed hereunder and (A) Employee shall die, (B) Employee shall be subject to a “permanent disability” as described in Section 4(b) hereof, or (C) a Change of Control (as defined below) has occurred with respect to the Company. A “Change of Control” for purposes of this subparagraph (iv) shall have the same meaning as that term is given in the Stock Plan.
Vesting and Exercisability of Option The Option shall vest, and may be exercised, with respect to the Shares as set forth in the Optionee Statement attached hereto and made a part hereof, subject to earlier termination of the Option as provided in Sections 1.4 and 6 hereof or in the Plan. The right to purchase the Shares as they become vested shall be cumulative and shall continue during the Exercise Term unless sooner terminated as provided herein.
Stock Options and Restricted Stock Beginning with the 2001 Fiscal Year and in respect of each of the following Fiscal Years during the term of this Agreement, Employer's public company affiliate, IndyMac Bancorp, Inc., or any successor public company ("Public Company"), may grant to Officer stock options and/or restricted stock for such number of shares of the Public Company's common stock as the Compensation Committee of the Board of Directors of the Public Company ("Compensation Committee") in its sole discretion determines, taking into account Officer's and the Public Company's performance and the competitive practices then prevailing regarding the granting of stock options. Subject to the foregoing, it is anticipated that the number of shares in respect of each annual stock option and/or restricted stock grant shall be in accordance with the number of shares granted to officers of Employer at a level similar to Officer's level. The stock options and/or restricted stock described in this Section 4(d) in respect of a Fiscal Year shall be granted at the same time as the Public Company grants stock options and/or restricted stock to its other officers in respect of such Fiscal Year. Officer agrees that any stock options or restricted stock granted to him under his prior Employment Agreement(s), or granted separate from any such Employment Agreement(s), shall be subject to the terms of the 2000 Stock Option Plan except as may be expressly provided otherwise in this Agreement. All stock options and restricted stock granted in accordance with this Section 4(d): (i) shall be granted pursuant to the Public Company's current stock option plan, or such other stock option plan or plans as may be or come into effect during the term of this Agreement, (ii) shall be priced and vest in accordance with the terms set by the Compensation Committee, (iii) shall be subject to such other reasonable terms and conditions as may be determined by the Compensation Committee and set forth in the agreement or other document evidencing the award, (iv) in the event that Officer's employment is terminated due to death or Disability, shall, if then unvested, become immediately and fully vested, (v) in the event that Officer's employment is terminated through resignation or by Employer for either Cause (as defined in Section 5(c)) or Poor Performance (as defined in Section 5(d)), shall, if not then vested, immediately terminate, and (vi) in the event that Officer's employment is terminated by Employer other than for Cause (as defined in Section 5(e)), shall, if not then vested, become immediately and fully vested only to the extent that such restricted stock or stock options would, under the terms of such restricted stock or stock options, vest within one (1) year of such termination. All stock options granted in accordance with this Section 4(d) shall give Officer the right, upon termination of his employment hereunder, other than for Cause or Poor Performance (as defined in Section 5(e)), to exercise such options for a period of between 3 months and 12 months after such termination as provided hereinafter (but in no event later than their expiration date). In the event the vested options held by Officer immediately after such termination represent shares of common stock in an amount equal to or greater than 500,000, then the maximum period for the exercise of any options shall be 12 months. In the event the vested options held by Officer immediately after such termination represent shares of common stock in an amount equal to or greater than 100,000 but less than 500,000, then the maximum period for the exercise of any options shall be 6 months. In the event the vested options held by Officer immediately after such termination represent shares of common stock in an amount less than 100,000, then the maximum period for their exercise shall be 3 months. If the Board of Directors of Employer determines, in its sole and absolute discretion, that Officer is exhibiting "Poor Performance," as described in Section 5(d), but there is not a resulting termination of Officer's employment, the Compensation Committee may, in its sole and absolute discretion, cancel any outstanding, but unvested stock options or restricted stock that were previously granted to Officer. In the event that a New Public Company is formed and Officer is assigned by the Chief Executive Officer to be employed by that New Public Company, if such New Public Company is traded on the New York Stock Exchange or the NASDAQ, then, in the discretion of the Chief Executive Officer, up to 50% of the not-yet-vested stock options and restricted stock of Officer (whether previously granted hereunder or otherwise) may be terminated and replaced with such alternate incentive compensation (which may include stock options and/or restricted stock of the New Public Company) as the Chief Executive Officer may determine in his sole and absolute discretion, provided such replacement compensation is equivalent to the value of the replaced stock options and restricted stock. Such alternate incentive compensation may be granted on such terms and conditions as determined by the Chief Executive Officer, which terms and conditions may differ from those in this Agreement for comparable compensation, provided such terms and conditions provide an equivalent value to the replaced compensation. The Company shall select and retain a nationally recognized firm to determine the value of the stock options and restricted stock to be replaced and the value of the replacement compensation, and such firm's final valuation shall be accepted by both parties.
Company Stock Plans (a) Each option to purchase Company Common Stock (“Company Stock Options”) granted under any stock option plans or other equity-related plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall become fully vested and be cancelled as of immediately prior to the Effective Time (without regard to the exercise price of such Company Stock Option) in exchange for the right to receive at the Effective Time, in accordance with this Section 2.9, a lump sum cash payment in the amount of the Option Consideration (as defined below), if any, with respect to such Company Stock Option.
(b) Each holder of a Company Stock Option shall receive from the Purchaser or the Parent, in respect and in consideration of each Company Stock Option so cancelled, promptly following the Effective Time (but in any event not later than 10 Business Days), an amount (net of applicable taxes) equal to the product of (i) the excess, if any, of (A) the Merger Consideration per share of Company Common Stock over (B) the exercise price per share of Company Common Stock subject to such Company Stock Option, multiplied by (ii) the total number of shares of Company Common Stock subject to such Company Stock Option (whether or not then vested or exercisable), without any interest thereon (the “Option Consideration”). In the event that the exercise price of any Company Stock Option is equal to or greater than the Merger Consideration, such Company Stock Option shall be cancelled, without any consideration being payable in respect thereof, and have no further force or effect.
(c) As soon as practicable following the execution of this Agreement, the Company shall mail to each Person who is a holder of Company Stock Options a letter describing the treatment of and payment for such Company Stock Options pursuant to this Section 2.9 and providing instructions for use in obtaining payment for such Company Stock Options, which letter shall be subject to the Parent’s prior review and comment. The Parent shall at all times from and after the Effective Time maintain sufficient liquid funds to satisfy its obligations to holders of Company Stock Options pursuant to this Section 2.9.
(d) Each Restricted Share granted pursuant to the Company Stock Plans outstanding immediately prior to the Effective Time shall become fully vested and free of any vesting or other lapse restrictions immediately prior to the Effective Time.
(e) If the Effective Time occurs on or before the “Exercise Date” relating to the applicable “Plan Period” in effect as of the date of this Agreement (as such terms are defined in the Company ESPP) and there are “Options” (as defined in the Company ESPP) then outstanding with respect to such Plan Period, the Company Board shall, prior to such Effective Time, take such actions as are necessary to provide that all outstanding Options shall be cancelled as of the Closing Date, provided that notice of such cancellation shall be given to each holder of an Option, and to the extent that such holder does not elect to withdraw his or her participation in the Company ESPP prior to the Effective Time, then such Option shall be deemed to have been exercised in full on the Closing Date based on payroll deductions then credited to his or her account as of a date determined by the Company Board, which date shall not be less than ten (10) days preceding the Closing Date. The Company Board shall terminate the Company ESPP prior to the Effective Time. No new “Plan Period” shall commence after the date of this Agreement. As used in this Agreement, “Company ESPP” means the Company’s Restated 1999 Employee Stock Purchase Plan.
(f) As of the Effective Time, the Company Stock Plans shall terminate and all rights under any provision of any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company or any Subsidiary of the Company shall be cancelled.
Equity Plan For purposes of this Agreement, “Equity Plan” means the CS Disco, Inc. 2021 Equity Incentive Plan, as amended from time to time, or any successor plan thereto.
Treatment of Company Options (a) At the Effective Time, by virtue of the Merger and without any action of any Party or any other Person (but subject to, in the case of the Company, Section 2.4(c)), each Company Option (whether vested or unvested) shall be assumed by the SPAC and substituted with an option to purchase a number of shares of SPAC New Common Shares (such option, a “Substituted Option”) equal to the product (rounded down to the nearest whole number) of (i) the number of Company Common Shares subject to such Company Option immediately prior to the Effective Time and (ii) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such Company Option immediately prior to the Effective Time divided by (B) the Exchange Ratio; provided, however, that the exercise price and the number of SPAC New Common Shares purchasable pursuant to the Substituted Options shall be determined in a manner consistent with the requirements of Section 409A of the Code; provided, further, that, in the case of any Substituted Option to which Section 422 of the Code applies, the exercise price and the number of SPAC New Common Shares purchasable pursuant to such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code; provided, further, that, except as specifically provided above, following the Effective Time, each Substituted Option shall continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding former Company Option immediately prior to the Effective Time.
(b) At the Effective Time, no new awards will be granted under the Company Equity Plans, and the Company Equity Plans shall, to the extent not already expired, terminate without any further obligations or Liabilities to the Company or any of its Affiliates (including, for the avoidance of doubt, the SPAC) except as expressly contemplated herein.
(c) Prior to the Closing, the Company shall take, or cause to be taken, all necessary or appropriate actions (including adopting resolutions by the Company Board or a committee thereof) under the Company Equity Plans, or other applicable instruments under the underlying grant, award, warrant or similar agreement and otherwise, in each case, to give effect to the provisions of this Section 2.4. Prior to such adoption, the Company will provide the SPAC with drafts of, and a reasonable opportunity to comment on, all such resolutions.
Stock Plans (a) At the Effective Time, the Stock Plans (other than the ESPP) and each Option which is outstanding thereunder immediately prior to the Effective Time (whether or not then vested or exercisable) shall, subject to Schedule 5.8(a), be assumed by Parent. Each such Option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the applicable Stock Plans and the stock option agreements, immediately prior to the Effective Time, except that (i) such Option will be exercisable for that number of whole Parent Ordinary Shares equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Option immediately prior to the Effective Time multiplied by the Option Exchange Ratio and rounded down to the nearest whole number of Parent Ordinary Shares, and (ii) the per share exercise price for the Parent Ordinary Shares issuable upon exercise of such assumed Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Option was exercisable immediately prior to the Effective Time by the Option Exchange Ratio, rounded up to the nearest whole cent. Except as set forth in Section 5.8 of the Disclosure Schedule, neither the Merger nor the transactions contemplated by this Agreement will terminate any of the outstanding Options under the Stock Plans or accelerate the exercisability or vesting of such Options or the Parent Ordinary Shares which will be subject to those Options upon Parent’s assumption of the Options in the Merger. It is the intention of the parties that the Options so assumed by Parent hereunder qualify, to the maximum extent permissible, following the Effective Time as “incentive stock options” as defined in Section 422 of the Code to the extent such Options qualified as incentive stock options prior to the Effective Time.
(b) For purposes of this Agreement, (i) “Option Exchange Ratio” shall be equal to the quotient obtained by dividing the Merger Consideration by the Parent Fair Market Value, and (ii) “Parent Fair Market Value” means the average closing selling price per share of Parent Ordinary Shares as quoted on the London Stock Exchange for the ten (10) trading days preceding the Closing Date (as converted to U.S. Dollars at the Currency Exchange Rate as quoted in the New York edition of The Wall Street Journal on the Effective Date).
