Conversion of Stock Options (a) At the Effective Time, each option to purchase or other right with respect to shares of Magna Common Stock pursuant to stock options, stock appreciation rights or other rights, including stock awards ("Magna Options") granted by Magna under the Magna Stock Plans, which are outstanding at the Effective Time, whether or not exercisable, shall be converted into and become rights with respect to UPC Common Stock, and UPC shall assume each Magna Option, in accordance with the terms of the Magna Stock Plan and stock option or other agreement by which it is evidenced, except that from and after the Effective Time, (i) UPC and its Salary and Benefits Committee shall be substituted for Magna and the Committee of Magna's Board of Directors (including, if applicable, the entire Board of Directors of Magna) or other independent committee administering such Magna Stock Plan, (ii) each Magna Option assumed by UPC may be exercised solely for shares of UPC Common Stock (or cash in the case of stock appreciation rights), (iii) the number of shares of UPC Common Stock subject to such Magna Option shall be equal to the number of shares of Magna Common Stock subject to such Magna Option immediately prior to the Effective Time multiplied by the Exchange Ratio and rounding down to the nearest whole share, and (iv) the per share exercise price under each such Magna Option shall be adjusted by dividing the per share exercise price under each such Magna Option by the Exchange Ratio and rounding up to the nearest cent. Notwithstanding the clauses (iii) and (iv) of the first sentence of this Section 3.5, each Magna Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the Internal Revenue Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of the option, within the meaning of Section 424(h) of the Internal Revenue Code. UPC and Magna agree to take all necessary steps to effectuate the foregoing provisions of this Section 3.5.
Termination of Options To the extent vested in accordance with Section 2 above, the Options will terminate, and be of no force or effect, upon the earlier of:
Exercise of Nonstatutory Stock Option There may be a regular ------------------------------------- federal income tax liability upon the exercise of a Nonstatutory Stock Option. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If Optionee is an Employee or a former Employee, the Company will be required to withhold from Optionee's compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise.
Treatment of Stock Options 6 ARTICLE III.
Company Stock Options (i) Effective as of the Effective Time, each then outstanding option to purchase shares of Company Common Stock (each a “Company Stock Option”), pursuant to the Company’s equity-based compensation plans (the “Company Stock Plans”) and the award agreements evidencing the grants thereunder, granted prior to the date of this Agreement to any current or former employee or director of, consultant or other service provider to, the Company or any of its Subsidiaries shall immediately vest and become exercisable in accordance with the terms of the Company Stock Plans, shall be assumed by Parent and shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into an option to purchase a number of shares of Parent Common Stock (an “Assumed Stock Option”) equal to (i) the number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time multiplied by (ii) the Equity Award Exchange Ratio (rounded down to the nearest whole share); and the per share exercise price for Parent Common Stock issuable upon the exercise of such Assumed Stock Option shall be equal to (i) the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time divided by (ii) the Equity Award Exchange Ratio (rounded up to the nearest whole cent), provided, however, that such conversion and assumption of the Assumed Stock Options shall comply with the regulations and other binding guidance under Section 409A of the Code. Except as otherwise provided herein, the Assumed Stock Options shall be subject to the same terms and conditions (including expiration date and exercise provisions after taking into account the accelerated vesting of the Company Stock Options as of the Effective Time as contemplated by the Company Stock Plans) as were applicable to the corresponding Company Stock Options immediately prior to the Effective Time.
Exercise of Nonqualified Stock Option If the Option does not ------------------------------------- qualify as an ISO, there may be a regular federal and California income tax liability upon the exercise of the Option. Participant will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If Participant is a current or former employee of the Company, the Company may be required to withhold from Participant's compensation or collect from Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise.
Exercise of Stock Options If stock options granted in connection with a Stock Incentive Plan are exercised:
Grant of Stock Options This non-qualified Stock Option is granted under and pursuant to the Plan and is subject to each and all of the provisions thereof.
Vesting of Stock Options All unvested stock options held by Executive, if any, shall vest immediately upon a Change of Control Termination as defined in Section 6.1.2. Executive may exercise such options in accordance with the terms and conditions of the stock option plan and the agreement pursuant to which such options were granted.
