Treatment of Company Compensatory Awards. (a) Immediately prior to the Effective Time, by virtue of, and as a condition to, the Merger and without any action on the part of the holder thereof, each Company Option, whether vested or unvested, that has a per share exercise price that is less than the Common Cash Amount (each, an “In-the-Money Company Stock Option”) that is outstanding and unexercised immediately prior to the Effective Time shall be cancelled and automatically converted into the right to receive for each share of Company Common Stock underlying such Company Option, without interest and subject to deduction for any required withholding under applicable Tax Law, (i) an amount in cash from Parent or the Surviving Corporation equal to the excess of the Common Cash Amount over the per share exercise price of such Company Option and (ii) one CVR. (b) Immediately prior to the Effective Time, by virtue of, and as a condition to, the Merger and without any action on the part of the holder thereof, each Company Option that has a per share exercise price that is equal to or more than the Common Cash Amount but less than $2.71, whether vested or unvested (each, an “Out-of-the-Money Company Stock Option”), that is outstanding and unexercised immediately prior to the Effective Time shall be cancelled and automatically converted into the right to receive for each share of Company Common Stock underlying such Company Option, without interest and subject to deduction for any required withholding under applicable Tax Law, upon the occurrence of any Milestone Payment (as defined in the CVR Agreement), a cash payment, if any, equal to (A) the amount, if any, by which (i) the Common Cash Amount plus the applicable Milestone Payment plus any Milestone Payment that was previously paid exceeds (ii) the per share exercise price of such Out-of-the-Money Company Stock Option minus (B) the gross amount of Milestone Payments previously paid with respect to such share of Company Common Stock underlying such Out-of-the-Money Company Stock Option (the “Out-of-the-Money Option Consideration”), which amount shall be paid in accordance with Section 3.7(e). (c) At the Effective Time, without any action on the part of the Company or the holder thereof, each Company Option that has a per share exercise price equal to or greater than $2.71 shall be canceled without any consideration payable therefor whether before or after the Effective Time. (d) Immediately prior to the Effective Time, by virtue of, and as a condition to, the Merger and without any action on the part of the holder thereof, each Company Restricted Stock Award that is outstanding immediately prior to the Effective Time, whether vested or unvested, shall be cancelled and automatically converted into the right to receive for each share of Company Common Stock underlying such Company Restricted Stock Award, without interest and subject to deduction for any required withholding under applicable Tax Law, (i) an amount in cash from Parent or the Surviving Corporation equal to the Common Cash Amount and (ii) one CVR. (e) Prior to the Effective Time, the Company shall take any and all such actions as are necessary to effect the foregoing provisions of this Section 3.7. At or prior to the Effective Time, Parent shall deposit, or cause to be deposited, funds sufficient to pay the aggregate amount payable to the holders of Company Compensatory Awards pursuant to the provisions of this Section 3.7 to an account or accounts identified by the Company prior to the Effective Time. The Common Cash Amount with respect to any Company Compensatory Awards shall, except as may otherwise be required with respect to Company Compensatory Awards by Section 409A of the Code, be paid by the Surviving Corporation at, or within five (5) Business Days of, the Effective Time, without interest. As soon as practicable following delivery of a Milestone Notice (as defined in the CVR Agreement), if any, but in no event later than concurrently with the payment in respect of the Covered Equity Awards (as defined in the CVR Agreement) in connection with such Milestone Notice, Parent shall pay, or shall cause to be paid, the Out-of-the-Money Option Consideration in respect of any Out-of-the-Money Company Stock Options. All payments with respect to Company Compensatory Awards pursuant to this Section 3.7 shall be made through the Surviving Corporation’s payroll and/or equity award maintenance systems, subject to withholding if required under applicable Tax Law. Notwithstanding the foregoing, the terms of the CVRs to be issued to any holder of In-the-Money Company Stock Options and Company Restricted Stock Award, and the circumstances in which any payment is made in respect thereof, shall be governed solely by the CVR Agreement.
Appears in 2 contracts
Samples: Merger Agreement (Harmony Biosciences Holdings, Inc.), Merger Agreement (Harmony Biosciences Holdings, Inc.)
Treatment of Company Compensatory Awards. (a) Immediately prior to the Effective Time, by virtue of, and as a condition to, the Merger and without any action on the part of the holder thereof, each Company Option, whether vested or unvested, that has a per share exercise price that is less than the Common Cash Amount (each, an “In-the-Money Company Stock Option”) that is outstanding and unexercised immediately prior to the Effective Time shall be cancelled and automatically converted into the right to receive for each share of Company Common Stock underlying such Company Option, without interest and subject to deduction for any required withholding under applicable Tax Law, (i) an amount in cash from Parent or the Surviving Corporation equal to the excess of the Common Cash Amount over the per share exercise price of such Company Option and (ii) one CVR.
(b) Immediately prior to the Effective Time, by virtue of, and as a condition to, the Merger and without any action on the part of the holder thereof, each Company Option that has a per share exercise price that is equal to or more than the Common Cash Amount but less than $2.71, whether vested or unvested (each, an “Out-of-the-Money Company Stock Option”), that is outstanding and unexercised immediately prior to the Effective Time shall be cancelled and automatically converted into the right to receive for each share of Company Common Stock underlying such Company Option, without interest and subject to deduction for any required withholding under applicable Tax Law, upon the occurrence of any Milestone Payment (as defined in the CVR Agreement), a cash payment, if any, equal to (A) the amount, if any, by which (i) the Common Cash Amount plus the applicable Milestone Payment plus any Milestone Payment that was previously paid exceeds (ii) the per share exercise price of such Out-of-the-Money Company Stock Option minus (B) the gross amount of Milestone Payments previously paid with respect to such share of Company Common Stock underlying such Out-of-the-Money Company Stock Option (the “Out-of-the-Money Option Consideration”), which amount shall be paid in accordance with Section 3.7(e).
(c) At the Effective Time, without any action on the part of the Company or the holder thereof, each Company Option that has a per share exercise price equal to or greater than $2.71 shall be canceled without any consideration payable therefor whether before or after the Effective Time.
(d) Immediately prior to the Effective Time, by virtue of, and as a condition to, the Merger and without any action on the part of the holder thereof, each Company Restricted Stock Award that is outstanding immediately prior to the Effective Time, whether vested or unvested, shall be cancelled and automatically converted into the right to receive for each share of Company Common Stock underlying such Company Restricted Stock Award, without interest and subject to deduction for any required withholding under applicable Tax Law, (i) an amount in cash from Parent or the Surviving Corporation equal to the Common Cash Amount and (ii) one CVR.
(e) Prior to the Effective Time, the Company shall take any and all such actions as are necessary to effect the foregoing provisions of this Section 3.7. At or prior to the Effective Time, Parent shall deposit, or cause to be deposited, funds sufficient to pay the aggregate amount payable to the holders of Company Compensatory Awards pursuant to the provisions of this Section 3.7 to an account or accounts identified by the Company prior to the Effective Time. The Common Cash Amount with respect to any Company Compensatory Awards shall, except as may otherwise be required with respect to Company Compensatory Awards by Section 409A of the Code, be paid by the Surviving Corporation at, or within five (5) Business Days of, the Effective Time, without interest. As soon as practicable following delivery of a Milestone Notice (as defined in the CVR Agreement), if any, but in no event later than concurrently with the payment in respect of the Covered Equity Awards (as defined in the CVR Agreement) in connection with such Milestone Notice, Parent shall pay, or shall cause to be paid, the Out-of-the-Money Option Consideration in respect of any Out-of-the-Money Company Stock Options. All payments with respect to Company Compensatory Awards pursuant to this Section 3.7 shall be made through the Surviving Corporation’s payroll and/or equity award maintenance systems, subject to withholding if required under applicable Tax Law. Notwithstanding the foregoing, the terms of the CVRs to be issued to any holder of In-the-Money Company Stock Options and Company Restricted Stock Award, and the circumstances in which any payment is made in respect thereof, shall be governed solely by the CVR Agreement.
Appears in 2 contracts
Samples: Merger Agreement (Harmony Biosciences Holdings, Inc.), Merger Agreement (Zynerba Pharmaceuticals, Inc.)
Treatment of Company Compensatory Awards. (a) Immediately prior to At the Effective Time, by virtue of, and as a condition to, of the Merger and without any action on the part of the holder holders thereof, each Company Option, whether vested or unvested, that has a per share exercise price that is less than the Common Cash Amount (each, an “In-the-Money Company Stock Option”) Option that is outstanding and unexercised vested as of immediately prior to the Effective Time (“Cashed Out Company Options”) shall be cancelled immediately prior to the Effective Time and converted into the right to receive an amount in cash, rounding such amount down to the nearest whole cent, equal to the product obtained by multiplying (i) the aggregate number of Shares subject to such Company Option immediately prior to the Effective Time and (ii) the excess, if any, of the Merger Consideration less the exercise price per share of such Company Option (the “Option Consideration”). Each Company Option that is outstanding and vested and that has an exercise price per share of Company Common Stock that equals or exceeds the Merger Consideration shall be cancelled and shall cease to exist without entitling the holder thereof to receive any payment under this Section 4.05(a).
(b) At the Effective Time, each Company Option that is outstanding and is unvested as of immediately prior to the Effective Time shall be cancelled assumed by Parent and converted automatically converted at the Effective Time into the right to receive for each share an option denominated in shares of Company Parent Common Stock having the same terms and conditions as the Company Option (each, an “Assumed Option”), except that (i) each such Assumed Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of (A) the number of Shares underlying such Company Option, without interest and subject to deduction for any required withholding under applicable Tax Law, (i) an amount in cash from Parent or the Surviving Corporation equal to the excess Option as of the Common Cash Amount over the per share exercise price of such Company Option and (ii) one CVR.
(b) Immediately immediately prior to the Effective Time, multiplied by virtue of, and as (B) a condition tofraction (such ratio, the Merger and without any action on the part of the holder thereof, each Company Option that has a per share exercise price that is equal to or more than the Common Cash Amount but less than $2.71, whether vested or unvested (each, an “Out-of-the-Money Company Stock OptionExchange Ratio”), that the numerator of which is outstanding the Merger Consideration and unexercised the denominator of which is the volume weighted average price for a share of Parent Common Stock for the five trading days immediately prior to (and excluding) the Effective Time shall be cancelled Closing Date as reported by Bloomberg, L.P. (the “Parent Closing Price”), and automatically converted into rounding such product down to the right to receive for each share nearest whole number of Company shares of Parent Common Stock underlying (the amount of such Company rounding, the “Fractional Cancelled Option, without interest ”) and subject to deduction for any required withholding under applicable Tax Law, upon the occurrence of any Milestone Payment (as defined in the CVR Agreement), a cash payment, if any, equal to (A) the amount, if any, by which (i) the Common Cash Amount plus the applicable Milestone Payment plus any Milestone Payment that was previously paid exceeds (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such Out-of-the-Money Assumed Option will be equal to the quotient determined by dividing (A) the exercise price per Share of such Company Stock Option minus as of immediately prior to the Effective Time by (B) the gross Exchange Ratio, and rounding such quotient up to the nearest whole cent (such exercise price, the “Assumed Option Exercise Price”) and (iii) the Fractional Cancelled Option shall be converted into the right to receive an amount in cash, rounding such amount down to the nearest whole cent, equal to the product obtained by multiplying (A) the aggregate number of Milestone Payments previously paid with respect shares of Parent Common Stock subject to such share Fractional Cancelled Option immediately after the Effective Time and (B) the excess, if any, of Company Common Stock underlying such Out-of-the-Money Company Stock the Parent Closing Price less the Assumed Option Exercise Price (the “Out-of-the-Money Fractional Cancelled Option Consideration”). For the avoidance of doubt, which amount the Assumed Option Exercise Price and the number of shares of Parent Common Stock purchasable pursuant to the Company Options shall be paid determined in a manner consistent with the requirements of Section 409A of the Code and the applicable regulations promulgated thereunder; provided, however, that in the case of any Company Option to which Section 422 of the Code applies, the Assumed Option Exercise Price and the number of shares of Parent Common Stock 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 3.7(e)424(a) of the Code. As soon as reasonably practicable following the Effective Time, Parent will deliver to each Person who holds an Assumed Option a document evidencing the foregoing assumption of the Company Option by Parent.
(c) At the Effective Time, without any action on the part each award of the Company or the holder thereof, each Company Option that has a per share exercise price equal to or greater than $2.71 shall be canceled without any consideration payable therefor whether before or after the Effective Time.
(d) Immediately prior to the Effective Time, by virtue of, and as a condition to, the Merger and without any action on the part of the holder thereof, each Company Restricted Stock Award RSUs that is outstanding immediately prior to the Effective Time shall be assumed by Parent and converted automatically at the Effective Time into a restricted stock unit award denominated in shares of Parent Common Stock having the same terms and conditions as the award of Company RSUs (each, an “Assumed RSU Award”), except that (i) each such award of Company RSUs will entitle the holder, upon settlement, to that number of whole shares of Parent Common Stock equal to the product of (A) the number of Shares that were issuable with regard to such award of Company RSUs immediately prior to the Effective Time, whether vested or unvestedmultiplied by (B) the Exchange Ratio, and rounding such product down to the nearest whole number of shares of Parent Common Stock (the amount of such rounding, the “Fractional Cancelled RSU”) and (ii) the Fractional Cancelled RSU shall be cancelled and automatically converted into the right to receive for each share of Company Common Stock underlying such Company Restricted Stock Award, without interest and subject to deduction for any required withholding under applicable Tax Law, (i) an amount in cash from cash, rounding such amount down to the nearest whole cent, equal to the product obtained by multiplying (A) the number of shares of Parent Common Stock that were issuable with regard to such Fractional Cancelled RSU immediately after the Effective Time, multiplied by (B) the Parent Closing Price (the “Fractional Cancelled RSU Consideration”). As soon as reasonably practicable following the Effective Time, Parent will deliver to each Person who holds an Assumed RSU Award a document evidencing the foregoing assumption of the award of Company RSUs by Parent.
(d) Any current or former employee of the Company entitled to Option Consideration, Fractional Cancelled Option Consideration or Fractional Cancelled RSU Consideration (collectively, the “Cashed Out Compensatory Award Consideration”) in respect of Cashed Out Company Options, Fractional Cancelled Options and Fractional Cancelled RSUs (collectively, the “Cashed Out Compensatory Awards”) shall be paid such Cashed Out Compensatory Award Consideration through the payroll system of the Surviving Corporation equal to or, if not a current or former employee of the Common Cash Amount and Company, through the Paying Agent, in each case, payable as soon as practicable following the Closing Date (ii) one CVRand, in the case of current or former employees of the Company, in no event later than the next regularly scheduled payroll run of the Surviving Corporation following the Closing Date).
(e) Prior to the Effective Time, the Company shall take any and all such actions as are necessary to effect the foregoing provisions As of this Section 3.7. At or prior to the Effective Time, Parent shall deposit, or cause to be deposited, funds sufficient to pay the aggregate amount payable to the holders of Company Compensatory Awards pursuant to the provisions of this Section 3.7 to an account or accounts identified by assume the Company Stock Plans, provided that (i) all references to “Company” in the applicable Company Stock Plan and award agreements evidencing the Assumed Options, Assumed RSU Awards and any other awards granted thereunder by Parent after the Effective Time will be deemed references to Parent and (ii) the number of shares of Parent Common Stock available for awards under the Company Stock Plans shall be determined by adjusting the number of Shares available for awards under the Company Stock Plans immediately prior to the Effective Time. The Common Cash Amount Time in accordance with respect to any Company Compensatory Awards shall, except as may otherwise be required with respect to Company Compensatory Awards by Section 409A of the Code, be paid by the Surviving Corporation at, or within five Exchange Ratio.
(5f) Business Days of, Following the Effective Time, without interest. As soon as practicable following delivery no holder of a Milestone Notice Company Compensatory Award or any participant in any Company Stock Plan, or other Company Employee Plan or employee benefit arrangement of the Company or under any employment agreement, shall have any right hereunder to acquire any capital stock or other equity interests (as defined including any “phantom” stock or stock appreciation rights) in the CVR Agreement)Company, if any, but in no event later than concurrently with the payment in respect any of the Covered Equity Awards (as defined in the CVR Agreement) in connection with such Milestone Notice, Parent shall pay, its Subsidiaries or shall cause to be paid, the Out-of-the-Money Option Consideration in respect of any Out-of-the-Money Company Stock Options. All payments with respect to Company Compensatory Awards pursuant to this Section 3.7 shall be made through the Surviving Corporation’s payroll and/or equity award maintenance systems, subject to withholding if required under applicable Tax Law. Notwithstanding the foregoing, the terms of the CVRs to be issued to any holder of In-the-Money Company Stock Options and Company Restricted Stock Award, and the circumstances in which any payment is made in respect thereof, shall be governed solely by the CVR Agreement.
Appears in 1 contract
Treatment of Company Compensatory Awards. (a) Immediately Effective immediately prior to the Effective Time, each Company Option that is outstanding and unexercised shall (i) vest in full, and (ii) by virtue of, and as a condition to, of the Merger and without any action on the part of the holder holders thereof, shall be cancelled immediately prior to the Effective Time and converted into the right to receive an amount in cash equal to the product obtained by multiplying (i) the aggregate number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time and (ii) the excess, if any, of the Merger Consideration less the exercise price per share of such Company Option, subject to any applicable withholding or other Taxes required by Applicable Law to be withheld in accordance with Section 3.04 (the “Option Consideration”). Each holder of an outstanding Company Option shall be entitled to receive in exchange for the cancellation thereof the Option Consideration, if any, with respect to each share of Company Common Stock subject to such outstanding Company Option and Parent shall cause such payment to be made to the holder of such Company Option, if a current or former employee of the Company, through the payroll system of the Surviving Corporation or, if not a current or former employee of the Company, through the Paying Agent, in each case, payable as soon as practicable following the Closing Date (and, in the case of current or former employees of the Company, in no event later than the next regularly scheduled payroll run of the Surviving Corporation following the Closing Date). For the avoidance of doubt, if the exercise price per share of any Company Option, whether vested or unvested, that has a per share exercise price that is less than the Common Cash Amount (each, an “In-the-Money Company Stock Option”) that is outstanding and unexercised immediately prior to the Effective Time shall be cancelled and automatically converted into the right to receive for each share unvested as of Company Common Stock underlying such Company Option, without interest and subject to deduction for any required withholding under applicable Tax Law, (i) an amount in cash from Parent or the Surviving Corporation equal to the excess of the Common Cash Amount over the per share exercise price of such Company Option and (ii) one CVR.
(b) Immediately prior to the Effective Time, is equal to or greater than the Merger Consideration, then by virtue of, and as a condition to, of the Merger occurrence of the Effective Time and without any action on the part of Parent, Merger Sub, the Company or the holders thereof, the Company Option will automatically terminate and be cancelled without payment of any consideration to the holder thereof, each Company Option that has a per share exercise price that is equal to or more than the Common Cash Amount but less than $2.71, whether vested or unvested .
(each, an “Out-of-the-Money Company Stock Option”), that is outstanding and unexercised b) Effective immediately prior to the Effective Time shall be cancelled and automatically converted into Time,
(i) except as provided in Section 6.01(a)(i) of the right to receive for Company Disclosure Letter, each share of Company Common Restricted Stock underlying such Company Option, without interest the vesting of which is time-based shall automatically become fully vested and subject to deduction for any required withholding under applicable Tax Law, upon the occurrence of any Milestone Payment (as defined in the CVR Agreement), a cash payment, if any, equal to (A) the amount, if any, by which (i) the Common Cash Amount plus the applicable Milestone Payment plus any Milestone Payment that was previously paid exceeds restrictions thereon shall lapse; and
(ii) each Company Restricted Stock Award the per share exercise price vesting of such Outwhich is performance-of-the-Money Company Stock Option minus (B) based shall automatically become fully vested, and the gross amount of Milestone Payments previously paid restrictions thereon shall lapse, with respect to such share that number of shares of Company Common Restricted Stock underlying subject to such Out-of-the-Money Company Restricted Stock Option (Award determined based on the “Out-of-the-Money Option Consideration”)achievement of the applicable performance goals set forth in such Company Restricted Stock Award, which amount shall be paid as measured at the Effective Time in accordance with Section 3.7(e)the terms of such Company Restricted Stock Award, and any remaining unvested shares of Company Restricted Stock shall be immediately forfeited without payment of any consideration to the holder thereof.
(c) At the Effective Time, without any action on the part of the Company or the holder thereof, each Company Option that has a per share exercise price equal to or greater Not less than $2.71 shall be canceled without any consideration payable therefor whether before or after the Effective Time.
(d) Immediately ten days prior to the Effective Time, by virtue of, and as the Company shall send a condition to, the Merger and without any action on the part written notice in a form reasonably acceptable to Parent to each holder of the holder thereof, each an outstanding Company Option or Company Restricted Stock Award that is outstanding immediately prior to shall inform such holder of the Effective Time, whether vested or unvested, shall be cancelled treatment of the Company Options and automatically converted into the right to receive for each share of Company Common Stock underlying such Company Restricted Stock Award, without interest and subject to deduction for any required withholding under applicable Tax Law, (i) an amount Awards provided in cash from Parent or the Surviving Corporation equal to the Common Cash Amount and (ii) one CVRthis Section 3.05.
(ed) Prior to the Effective Time, the Company Board (or, if appropriate, any committee administering the Company Stock Plans) shall take any and all adopt such actions as resolutions that are necessary to effect for the foregoing provisions treatment of this Company Compensatory Awards as set forth in Section 3.7. At or prior to 3.05.
(e) Following the Effective Time, Parent shall depositno holder of a Company Compensatory Award or any participant in any Company Stock Plan, or cause to be deposited, funds sufficient to pay the aggregate amount payable to the holders other Company Employee Plan or employee benefit arrangement of Company Compensatory Awards pursuant to the provisions of this Section 3.7 to an account or accounts identified by the Company prior or under any employment agreement shall have any right hereunder to the Effective Time. The Common Cash Amount with respect to acquire any Company Compensatory Awards shall, except as may otherwise be required with respect to Company Compensatory Awards by Section 409A of the Code, be paid by the Surviving Corporation at, capital stock or within five other equity interests (5including any “phantom” stock or stock appreciation rights) Business Days of, the Effective Time, without interest. As soon as practicable following delivery of a Milestone Notice (as defined in the CVR Agreement)Company, if any, but in no event later than concurrently with the payment in respect any of the Covered Equity Awards (as defined in the CVR Agreement) in connection with such Milestone Notice, Parent shall pay, its Subsidiaries or shall cause to be paid, the Out-of-the-Money Option Consideration in respect of any Out-of-the-Money Company Stock Options. All payments with respect to Company Compensatory Awards pursuant to this Section 3.7 shall be made through the Surviving Corporation’s payroll and/or equity award maintenance systems, subject to withholding if required under applicable Tax Law. Notwithstanding the foregoing, the terms of the CVRs to be issued to any holder of In-the-Money Company Stock Options and Company Restricted Stock Award, and the circumstances in which any payment is made in respect thereof, shall be governed solely by the CVR Agreement.
Appears in 1 contract
Samples: Merger Agreement (Cbeyond, Inc.)
Treatment of Company Compensatory Awards. (a) Immediately At the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each In-the-Money Company Option that is outstanding and vested (including any unvested Company Options that are not assumed pursuant to Section 3.05(b) and vest in connection with the Transaction contemplated by this Agreement by virtue of such non-assumption pursuant to the terms of the applicable Company Stock Plan) as of immediately prior to the Effective Time other than Company Options set forth in Section 3.05(a) of the Company Disclosure Schedule (“Cashed Out Company Options”) shall be cancelled immediately prior to the Effective Time and converted into the right to receive an amount in cash equal to the product obtained by multiplying (i) the aggregate number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time and (ii) the excess, if any, of the Merger Consideration less the exercise price per share of such Company Option (the “Option Consideration”). In the event that any Cashed Out Company Option is subject to Section 409A of the Code, as jointly determined by Parent and the Company, the payment of the amount of cash with respect thereto shall be delayed to the extent necessary to comply with Section 409A of the Code. Each holder of an outstanding In-the-Money Company Option shall be entitled to receive in exchange for the cancellation thereof the Option Consideration with respect to each share of Company Common Stock subject to such outstanding In-the-Money Company Option and the Company shall cause such payment to be made to the holder of such Company Option, if a current or former employee of the Company, through the payroll system of the Surviving Corporation or, if not a current or former employee of the Company, through the Paying Agent, in each case, payable as soon as practicable following the Closing Date (and, in the case of current or former employees of the Company, in no event later than the next regularly scheduled payroll run of the Surviving Corporation following the Closing Date).
(b) At the Effective Time, each Company Option that is either outstanding and unvested immediately prior to the Effective Time and is held by an Acquired Company Employee or Acquired Company Service Provider or set forth in Section 3.05(b) of the Company Disclosure Schedule shall be assumed by Ultimate Parent and converted automatically at the Effective Time into an option denominated in Ultimate Parent Ordinary Shares having the same terms and conditions as the Company Option (each, an “Assumed Option”), except that (i) each such Assumed Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole Ultimate Parent Ordinary Shares equal to the product of (A) the number of shares of Company Common Stock that were issuable upon exercise of such Company Option immediately prior to the Effective Time, multiplied by (B) a fraction (such ratio, the “Exchange Ratio”), the numerator of which is the Merger Consideration and the denominator of which is the volume weighted average price for an Ultimate Parent Ordinary Share for the five trading days immediately prior to (and excluding) the Closing Date as reported by Bloomberg, L.P., and rounding such product down to the nearest whole number of Ultimate Parent Ordinary Shares, (ii) the per share exercise price for the Ultimate Parent Ordinary Shares issuable upon exercise of such Assumed Option will be equal to the quotient determined by dividing (A) the exercise price per share of Company Common Stock at which such Company Option was exercisable immediately prior to the Effective Time by (B) the Exchange Ratio, and rounding such quotient up to the nearest whole cent and (iii) all references to the “Company” in the applicable Company Stock Plans and the stock option agreements will be references to Ultimate Parent. The Company will not take any action to accelerate the vesting of any Company Options (other than to implement any existing agreements or arrangements for such acceleration in effect as of the date of this Agreement). As soon as reasonably practicable, Ultimate Parent will use reasonable best efforts to issue to each Person who holds an Assumed Option a document evidencing the foregoing assumption of such Company Option by Ultimate Parent.
(c) All Company Options which are not In-the-Money Company Options or Assumed Options shall be cancelled as of immediately prior to the Effective Time in exchange for no consideration. In no event shall the Company Options described in this Section 3.05(c) be assumed by Ultimate Parent.
(d) At the Effective Time each Company RSU that is outstanding immediately prior to the Effective Time and is held by an Acquired Company Employee or Acquired Company Service Provider shall be assumed by Ultimate Parent and converted automatically at the Effective Time into a restricted stock unit denominated in Ultimate Parent Ordinary Shares having the same terms and conditions as the Company RSU (each, an “Assumed RSU”), except that (i) each such Company RSU will entitle the holder, upon settlement, to that number of whole Ultimate Parent Ordinary Shares equal to the product of (A) the number of shares of Company Common Stock that were issuable with regard to such Company RSU immediately prior to the Effective Time, multiplied by (B) the Exchange Ratio, and rounding such product down to the nearest whole number of Ultimate Parent Ordinary Shares, (ii) all references to the “Company” in the applicable Company Stock Plans and the Company RSU agreements will be references to Ultimate Parent and (iii) the performance-based vesting criteria, if any, shall be deemed met at the Effective Time with respect to such Company RSU at a level that would result in the payout of a Target Award (as defined in the applicable award agreement relating to such Company RSU as in effect on the date of this Agreement). The Company will not take any action to accelerate the vesting of any Company RSU (other than to implement any existing agreements or arrangements for such acceleration in effect as of the date of this Agreement). As soon as reasonably practicable, Ultimate Parent will issue to each Person who holds an assumed Company RSU a document evidencing the foregoing assumption of such Company RSU by Ultimate Parent.
(e) At the Effective Time, by virtue ofof the Merger and without any action on the part of the holders thereof, each Company RSU that is not an Assumed RSU (“Cashed Out Company RSUs” and together with Cashed Out Company Options, “Cashed Out Compensatory Awards”) shall vest in full and be cancelled immediately prior to the Effective Time and converted into the right to receive an amount in cash equal to the product obtained by multiplying (i) the aggregate number of shares of Company Common Stock subject to such Company RSU immediately prior to the Effective Time and (ii) the Merger Consideration (the “RSU Consideration”). In the event that any Cashed Out Company RSU is subject to Section 409A of the Code, as jointly determined by Parent and the Company, the payment of the amount of cash with respect thereto shall be delayed to the extent necessary to comply with Section 409A of the Code. Each holder of an outstanding Cashed Out Company RSU shall be entitled to receive in exchange for the cancellation thereof the RSU Consideration with respect to each share of Company Common Stock subject to such outstanding Company RSU and the Company shall cause such payment to be made to the holder of such Company RSU, if a condition tocurrent or former employee of the Company, through the payroll system of the Surviving Corporation or, if not a current or former employee of the Company, through the Paying Agent, in each case, payable as soon as practicable following the Closing Date (and, in the case of current or former employees of the Company, in no event later than the next regularly scheduled payroll run of the Surviving Corporation following the Closing Date).
(f) At the Effective Time, each share of Company Common Stock issued in connection with a Company Compensatory Award, which share is then subject to vesting or other lapse restrictions (collectively, the “Company Restricted Stock”) shall, by virtue of the Merger and without any action on the part of the holder thereof, each Company Option, whether vested or unvested, that has a per share exercise price that is less than the Common Cash Amount (each, an “In-the-Money Company Stock Option”) that is outstanding and unexercised immediately prior to the Effective Time shall be cancelled and automatically converted into the right to receive for each share of Company Common Stock underlying such Company Option, without interest and subject to deduction for any required withholding under applicable Tax Law, (i) an amount in cash from Parent or the Surviving Corporation equal to the excess of the Common Cash Amount over the per share exercise price of such Company Option and (ii) one CVR.
(b) Immediately prior to the Effective Time, by virtue of, and as a condition to, the Merger and without any action on the part of the holder thereof, each Company Option that has a per share exercise price that is equal to or more than the Common Cash Amount but less than $2.71, whether vested or unvested (each, an “Out-of-the-Money Company Stock Option”), that is outstanding and unexercised immediately prior to the Effective Time shall be cancelled and automatically converted into the right to receive for each share of Company Common Stock underlying such Company Option, without interest and subject to deduction for any required withholding under applicable Tax Law, upon the occurrence of any Milestone Payment (as defined in the CVR Agreement), a cash payment, if anyfrom Ultimate Parent, upon vesting, equal to (A) the amount, if any, by which (i) the Common Cash Amount plus the applicable Milestone Payment plus any Milestone Payment that was previously paid exceeds (ii) the per share exercise price of such Out-of-the-Money Company Stock Option minus (B) the gross amount of Milestone Payments previously paid with respect to such share of Company Common Stock underlying such Out-of-the-Money Company Stock Option Merger Consideration (the “Out-of-the-Money Option ConsiderationCompany Restricted Cash”). Except as set forth in the preceding sentence, which amount the Company Restricted Cash shall be paid in accordance with Section 3.7(e)have the same terms and conditions as the Company Restricted Stock.
(cg) At the Effective Time, without any action on the part of the Company or the holder thereof, each Company Option that has a per share exercise price equal to or greater Not less than $2.71 shall be canceled without any consideration payable therefor whether before or after the Effective Time.
(d) Immediately 30 days prior to the Effective Time, by virtue of, and as a condition to, the Merger and without any action on the part of the holder thereof, each Company Restricted Stock Award that is outstanding immediately prior to the Effective Time, whether vested or unvested, shall be cancelled and automatically converted into the right to receive for each share of Company Common Stock underlying such Company Restricted Stock Award, without interest and subject to deduction for any required withholding under applicable Tax Law, (i) an amount in cash from Parent or the Surviving Corporation equal to the Common Cash Amount and (ii) one CVR.
(e) Prior to the Effective Time, the Company shall take any send a written notice in a form reasonably acceptable to Parent to each holder of an outstanding Company Option or Company RSU that shall inform such holder of the treatment of the Company Options and all such actions as are necessary to effect the foregoing provisions of Company RSUs provided in this Section 3.7. At 3.05.
(h) Notwithstanding anything in this Section 3.05 or prior otherwise in this Agreement to the Effective Timecontrary, Parent shall deposit, or cause to be deposited, funds sufficient to pay the aggregate amount payable to the holders conversion of Company Compensatory Awards pursuant to the provisions of Options and Company RSUs provided for in this Section 3.7 to an account or accounts identified by the Company prior to the Effective Time. The Common Cash Amount 3.05 shall be effected in a manner consistent with respect to any Company Compensatory Awards shall, except as may otherwise be required with respect to Company Compensatory Awards by Section 409A of the Code, be paid by the Surviving Corporation at, or within five .
(5i) Business Days of, Following the Effective Time, without interest. As soon as practicable following delivery no holder of a Milestone Notice Company Compensatory Award or any participant in any Company Stock Plan, or other Company Employee Plan or employee benefit arrangement of the Company or under any employment agreement shall have any right hereunder to acquire any capital stock or other equity interests (as defined including any “phantom” stock or stock appreciation rights) in the CVR Agreement)Company, if any, but in no event later than concurrently with the payment in respect any of the Covered Equity Awards (as defined in the CVR Agreement) in connection with such Milestone Notice, Parent shall pay, its Subsidiaries or shall cause to be paid, the Out-of-the-Money Option Consideration in respect of any Out-of-the-Money Company Stock Options. All payments with respect to Company Compensatory Awards pursuant to this Section 3.7 shall be made through the Surviving Corporation’s payroll and/or equity award maintenance systems, subject to withholding if required under applicable Tax Law. Notwithstanding the foregoing, the terms of the CVRs to be issued to any holder of In-the-Money Company Stock Options and Company Restricted Stock Award, and the circumstances in which any payment is made in respect thereof, shall be governed solely by the CVR Agreement.
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