Treatment of Company Options. (i) No Company Options shall be assumed, substituted or continued by Buyer or the Company in connection with the Merger or the other transactions contemplated hereby. Immediately prior to the Effective Time, each Vested Company Option shall be cancelled and converted automatically into the right to receive, with respect to each share of Company Common Stock subject thereto, (u) at the Effective Time, an amount, without interest, in respect of each share of Company Common Stock issuable upon the exercise in full of such Vested Company Option, equal to the excess of (A) Per Share Merger Consideration, without interest, over (B) the applicable per share exercise price of such Vested Company Option, (v) the contingent right to receive disbursements of Adjustment Escrow Cash with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in each case in accordance with Section 2.8, (w) the contingent right to receive cash disbursements required to be made in connection the Post-Closing Excess Amount (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in accordance with Section 2.8(e), (x) the contingent right to receive cash disbursements required to be made in connection with the Indemnification Payment (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the Indemnification Payment), without interest, in accordance with Section 6.22(b), and (y) the contingent right to receive cash disbursements required to be made in connection the release of the Stockholder Representative Expense Amount (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in accordance with Section 8.1(b)(iii). Such payments in respect of any such Vested Company Options that are Employee Options shall be made to the holders of such Vested Company Options through the payroll processing system of the Surviving Corporation in accordance with standard payroll practices net of applicable Tax withholding and deductions, and such payments in respect of any such Vested Company Options that are Non-Employee Options shall be paid to the Paying Agent for further payment to such the holders of such Non-Employee Options; provided, that, as a condition to payment of any amount owed to the holders of Vested Company Options that are Non-Employee Options, each such holder must have first delivered to the Paying Agent a properly completed IRS Form W-9, or the appropriate version of IRS Form W-8, as applicable. For purposes of calculating the aggregate amount of consideration payable in respect of each Vested Company Option held by a Company Optionholder pursuant to this Section 2.1(b)(i), (x) all shares of Company Common Stock issuable upon the exercise in full of the Vested Company Options held by each such Company Optionholder shall be aggregated, and (y) the amount of cash to be paid to each such Company Optionholder shall be rounded down to the nearest whole cent. To the extent the vesting of a Company Option is accelerated by action of the Company (and not automatically in accordance with its terms due to the occurrence of the Effective Time) and such Company Option becomes a Vested Company Option (an “Accelerated Option”), then, in addition to any documents such Company Optionholder must provide pursuant to this Section 2.1(b)(i), as a condition to payment of any amount owed in respect of such Accelerated Option, such Company Optionholder (an “Accelerated Optionholder”) shall provide a release to the Buyer Released Parties in substantially the form provided in Section 10.14 (the “Optionholder Release”). (ii) Immediately prior to the Effective Time, each Unvested Company Option and Company Option that is an Out-of-the-Money Option and that is outstanding shall become be cancelled, terminated and extinguished without any consideration being payable in respect thereof, and have no further force or effect. (iii) Prior to the Effective Time, and subject to the prior review of Buyer, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.1 under the Company Equity Plan and any Contract applicable to any Company Option (whether written or oral, formal or informal), including delivering all required notices, obtaining all necessary approvals and consents, and delivering evidence satisfactory to Buyer that all necessary determinations by the Board or applicable committee of the Board to accelerate and terminate all Vested Company Options have been made. The Company shall take all actions necessary to terminate the Company Equity Plan prior to the Effective Time. (iv) To the extent applicable, any allocable portion of the Total Merger Consideration to be made following the Closing to a holder of Vested Company Options in accordance with this Agreement, if any, shall be paid at the same time as any related payments are made to Company Stockholders in a manner that satisfies Regulation Section 1.409A-3(i)(5)(iv) of the Code, to the extent necessary to satisfy the requirements of Section 409A of the Code.
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Treatment of Company Options. (i) No Company Options Vested Option shall be assumedassumed or otherwise replaced by Parent. Each Company Vested Option shall terminate and cease to be outstanding as of the Effective Time.
(ii) The Company shall give to each holder of a Company Vested Option the opportunity (of not more than 30 days) to decline to accept a modification of such Company Vested Option such that, substituted or continued by Buyer or the Company in connection with the Merger or the other transactions contemplated hereby. Immediately immediately prior to the Effective Time, and conditioned on the consummation of the Merger, such holder shall automatically (without any further action required of such holder) be deemed to have exercised such Company Vested Option pursuant to a net exercise program whereby such holder will be deemed to have paid the aggregate exercise price for such Company Vested Option by relinquishing that number of shares of Company Common Stock underlying such option in an amount necessary to pay the applicable aggregate exercise price and any applicable withholding taxes associated with such net exercise of such Company Vested Option. The number of shares of Company Common Stock deemed delivered to the holder of each Company Vested Company Option pursuant to this net exercise program shall be cancelled and converted automatically into determined by subtracting the right Net Exercise Consideration (as defined below) applicable to receive, with respect to each share such Company Vested Option from the number of shares of Company Common Stock subject theretoto such Company Vested Option. The holder of each such Company Vested Option shall from and after the Effective Time (A) participate in the transactions contemplated by this Agreement in the same manner, (u) and to the same extent, as if at the Effective Time, an amount, without interest, in respect of each share of Company Common Stock issuable upon the exercise in full of such Vested Company Option, equal to the excess of (A) Per Share Merger Consideration, without interest, over (B) the applicable per share exercise price of such Vested Company Option, (v) the contingent right to receive disbursements of Adjustment Escrow Cash with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in each case in accordance with Section 2.8, (w) the contingent right to receive cash disbursements required to be made in connection the Post-Closing Excess Amount (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in accordance with Section 2.8(e), (x) the contingent right to receive cash disbursements required to be made in connection with the Indemnification Payment (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the Indemnification Payment), without interest, in accordance with Section 6.22(b), and (y) the contingent right to receive cash disbursements required to be made in connection the release of the Stockholder Representative Expense Amount (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in accordance with Section 8.1(b)(iii). Such payments in respect of any such Vested Company Options that are Employee Options shall be made to the holders of such Vested Company Options through the payroll processing system of the Surviving Corporation in accordance with standard payroll practices net of applicable Tax withholding and deductions, and such payments in respect of any such Vested Company Options that are Non-Employee Options shall be paid to the Paying Agent for further payment to such the holders of such Non-Employee Options; provided, that, as a condition to payment of any amount owed to the holders of Vested Company Options that are Non-Employee Options, each Time such holder must have first delivered to the Paying Agent a properly completed IRS Form W-9, or the appropriate version owned that number of IRS Form W-8, as applicable. For purposes of calculating the aggregate amount of consideration payable in respect of each Vested Company Option held by a Company Optionholder pursuant to this Section 2.1(b)(i), (x) all shares of Company Common Stock issuable upon delivered after the automatic deemed net exercise in full pursuant to this Section 1.7(ii) and (B) receive, if applicable, the Fractional Share Payment (as defined below). As soon as practicable following the filing of the Registration Statement and in compliance with applicable securities laws, the Company shall provide to each holder of any Company Option an informational notice and consent describing the treatment of Company Vested Options pursuant to this Section 1.7.
(iii) Parent shall, at its sole discretion and pursuant to a written election of Parent made prior to the Closing, either (A) assume every Company Unvested Option in accordance with the terms set forth below in this Section 1.7(iii) or (B) cause all such Company Unvested Options to vest and terminate (each referred to herein as a "CASHED OUT OPTION") and make a cash payment to the holder of each such Cashed Out Option in an amount equal to (x) the number of shares of Company Common Stock underlying all Company Unvested Options held by each such Company Optionholder shall be aggregated, and holder immediately prior to the Effective Time multiplied by (y) the Per Share Amount and minus (z) the aggregate amount necessary to exercise all of the Company Unvested Options held by such holder. If Parent elects to vest and terminate all Company Unvested Options in accordance with the foregoing provisions of this Section 1.7(iii), Parent shall make the cash payment required pursuant to be paid the foregoing provisions of this Section 1.7(iii) to each holder of Company Unvested Options no later than the second Business Day after the Closing. If Parent elects to assume all Company Unvested Options in accordance with the foregoing provisions of this Section 1.7(iii), (i) each such assumed Company Unvested Option shall thereby be converted into an option (an "ASSUMED OPTION") to purchase the number of shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Optionholder shall be Unvested Option immediately prior to the Effective Time multiplied by the Company Option Exchange Ratio (as defined below), rounded down to the nearest whole cent. To number of shares of Parent Common Stock, and (ii) the extent per share exercise price for the vesting shares of a Company Parent Common Stock issuable upon exercise of such Assumed Option is accelerated shall be equal to the quotient obtained by action dividing the per share exercise price of the Company (and not automatically in accordance with its terms due to the occurrence of the Effective Time) and such Company Unvested Option becomes a Vested Company Option (an “Accelerated Option”), then, in addition to any documents such Company Optionholder must provide pursuant to this Section 2.1(b)(i), as a condition to payment of any amount owed in respect of such Accelerated Option, such Company Optionholder (an “Accelerated Optionholder”) shall provide a release to the Buyer Released Parties in substantially the form provided in Section 10.14 (the “Optionholder Release”).
(ii) Immediately immediately prior to the Effective Time, each Unvested Time by the Company Option Exchange Ratio, rounded up to the nearest whole cent. Each Assumed Option shall continue to be subject to the same vesting schedule following the Effective Time as to which it was subject prior to the Effective Time and shall also have the same terms and conditions set forth in the applicable Company Unvested Option that is an Out-of-the-Money Option and that is outstanding shall become be cancelled(including any applicable award agreement or other documents evidencing such security). Notwithstanding the provisions of the immediately preceding sentence, terminated and extinguished without in the event that, at any consideration being payable in respect thereof, and have no further force or effect.
(iii) Prior to time after the Effective Time, Parent or the Surviving Corporation shall terminate for any reason or no reason (other than for Cause) the employment, consultancy or other association of any holder of an Assumed Option, or the holder of any Assumed Option shall terminate for Good Reason his or her employment, consultancy or other association with Parent or the Surviving Corporation, and that at the time of such termination such Assumed Option is not exercisable for all of the shares of Parent Common Stock subject to such Assumed Option, then, immediately upon such termination, such Assumed Option shall automatically (without any further action required by such holder, Parent or the prior review of Buyer, the Company shall take Surviving Corporation) become exercisable for all actions necessary to effect the transactions anticipated by this Section 2.1 under the Company Equity Plan and any Contract applicable to any Company Option (whether written or oral, formal or informal), including delivering all required notices, obtaining all necessary approvals and consents, and delivering evidence satisfactory to Buyer that all necessary determinations by the Board or applicable committee of the Board shares of Parent Common Stock subject to accelerate and terminate all Vested Company Options have been made. The Company shall take all actions necessary to terminate the Company Equity Plan prior to the Effective Timesuch Assumed Option.
(iv) To For the extent applicable, any allocable portion purposes of the Total Merger Consideration to be made following the Closing to a holder of Vested Company Options in accordance with this Agreement, if any, shall be paid at the same time as any related payments are made to Company Stockholders in a manner that satisfies Regulation Section 1.409A-3(i)(5)(iv) of the Code, to the extent necessary to satisfy the requirements of Section 409A of the Code.1.7:
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Treatment of Company Options. (i) No Company Options shall will not be continued, assumed, or substituted or continued for by Buyer or the Company in connection with or Purchaser as part of the Merger or Merger. Prior to the Closing, the Company’s Board of Directors (the “Company Board”) will adopt appropriate resolutions and will have taken all other transactions contemplated hereby. Immediately actions necessary and appropriate to provide that each unexpired and unexercised Company stock option (a “Company Option”) that is outstanding immediately prior to the Effective TimeTime shall become 100% vested and may be exercised or, each if not exercised, will be cancelled in exchange for the consideration in accordance with this Section 2.6(c). After such resolutions have been adopted by the Company Board, prior to the Closing, the Company will provide a notice to the holders of the Company Options (the “Optionholders”) apprising them that all Company Options that are unexercised as of immediately prior to the Effective Time will be cancelled in accordance with this Section 2.6(c) and the applicable Option Plan.
(ii) Upon delivery of an option termination agreement substantially in the form attached as Exhibit G (an “Option Termination Agreement”), duly completed and validly executed, by an Optionholder holding a cancelled Vested Company Option shall Option, such Optionholder will be cancelled entitled to receive in consideration of the cancellation and converted automatically into the right to receive, with respect to each share of Company Common Stock subject thereto, (u) at the Effective Time, an amount, without interest, in respect of each share of Company Common Stock issuable upon the exercise in full settlement of such Vested Company Option, an amount in cash (without interest) equal to the product of (1) the total number of shares of Company Common Stock subject to such Vested Company Option and (2) the excess of (A) the Common Stock Per Share Merger Consideration, without interest, Amount over (B) the applicable exercise price per share exercise price of the Company Common Stock previously subject to such Vested Company Option, (v) the contingent right to receive disbursements of Adjustment Escrow Cash with respect to such share of Company Common Stock issuable upon the exercise in full minus a portion of such Vested Company amount which will be withheld from such Optionholder and deposited in the Escrow Fund pursuant to Section 2.11 (the “Closing Option (based on such Company Optionholder’s Pro Rata Share Consideration” and the aggregate of the released amount), without interest, in each case in accordance with Section 2.8, (w) the contingent right all Closing Option Consideration payable to receive cash disbursements required to be made in connection the Post-Closing Excess Amount (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in accordance with Section 2.8(e), (x) the contingent right to receive cash disbursements required to be made in connection with the Indemnification Payment (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the Indemnification Payment), without interest, in accordance with Section 6.22(b), and (y) the contingent right to receive cash disbursements required to be made in connection the release of the Stockholder Representative Expense Amount (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in accordance with Section 8.1(b)(iii). Such payments in respect of any such Vested Company Options that are Employee Options shall be made to the holders of such Vested Company Options through the payroll processing system of the Surviving Corporation in accordance with standard payroll practices net of applicable Tax withholding and deductions, and such payments in respect of any such Vested Company Options that are Non-Employee Options shall be paid to the Paying Agent for further payment to such the holders of such Non-Employee Options; provided, that, as a condition to payment of any amount owed to the holders of Vested Company Options that are Non-Employee Options, each the “Aggregate Closing Option Consideration”). The portion of the Aggregate Closing Option Consideration payable to holders of any such holder must have first delivered to the Paying Agent a properly completed IRS Form W-9, or the appropriate version of IRS Form W-8, as applicable. For purposes of calculating the aggregate amount of consideration payable in respect of each cancelled Vested Company Option held by a Company Optionholder pursuant to this Section 2.1(b)(i), (x) all shares of Company Common Stock issuable upon the exercise in full of the Vested Company Options held by each such Company Optionholder shall be aggregated, and (y) the amount of cash to be paid to each such Company Optionholder shall be rounded down to the nearest whole cent. To the extent the vesting of a Company Option is accelerated by action who are employees or former employees of the Company (and not automatically in accordance with its terms due to the occurrence of the Effective Time) and such Company Option becomes a Vested Company Option (an “Accelerated Option”), then, in addition to any documents such Company Optionholder must provide pursuant to this Section 2.1(b)(i), as a condition to payment of any amount owed in respect of such Accelerated Option, such Company Optionholder (an “Accelerated OptionholderEmployee Optionholders”) shall provide a release to the Buyer Released Parties in substantially the form provided in Section 10.14 (the “Optionholder Release”).
(ii) Immediately prior to the Effective Time, each Unvested Company Option and Company Option that is an Out-of-be the-Money Option and that is outstanding shall become be cancelled, terminated and extinguished without any consideration being payable in respect thereof, and have no further force or effect.
(iii) Prior to the Effective Time, and subject to the prior review of Buyer, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.1 under the Company Equity Plan and any Contract applicable to any Company Option (whether written or oral, formal or informal), including delivering all required notices, obtaining all necessary approvals and consents, and delivering evidence satisfactory to Buyer that all necessary determinations by the Board or applicable committee of the Board to accelerate and terminate all Vested Company Options have been made. The Company shall take all actions necessary to terminate the Company Equity Plan prior to the Effective Time.
(iv) To the extent applicable, any allocable portion of the Total Merger Consideration to be made following the Closing to a holder of Vested Company Options in accordance with this Agreement, if any, shall be paid at the same time as any related payments are made to Company Stockholders in a manner that satisfies Regulation Section 1.409A-3(i)(5)(iv) of the Code, to the extent necessary to satisfy the requirements of Section 409A of the Code.
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Samples: Merger Agreement (Best Buy Co Inc)
Treatment of Company Options. Each Company Option that is outstanding as of immediately prior to the Effective Time shall be canceled at the Effective Time, and, following the Effective Time, the Company Options shall no longer be exercisable by the holder thereof, and the portion of each Company Option that is vested and unexercised as of the Effective Time (after taking into account any accelerated vesting provisions that may apply) (each, a “Vested Company Option”) shall thereupon be converted into in exchange for the consideration described in clause (i) No below. At the Effective Time, the Company Plan shall be terminated and no further Company Options shall be assumed, substituted or continued by Buyer or the Company in connection with the Merger or the other transactions contemplated herebygranted thereunder. Immediately prior Any Option Consideration each Optionholder is entitled to receive pursuant to this Section 2.6(d) shall be rounded to the nearest whole cent. The portion of each Company Option that is unvested as of the Effective TimeTime (after taking into account any accelerated vesting provisions that may apply) shall be cancelled for no consideration.
(i) Subject to Section 2.7, Article III and Article IX, each holder of any Vested Company Option canceled in accordance with Section 2.6(d) above (each, an “Optionholder”) shall be cancelled and converted automatically into the right entitled to receive, with respect without interest and subject to each any applicable withholding Tax, in consideration of the shares of Company Common Stock subject to such Vested Company Option (such shares, the “Option Shares”): (A) an amount in cash equal to the product obtained by multiplying (I) the number of Option Shares subject to the Vested Company Option by (II) the excess, if any, of (x) the Estimated Per Share Merger Consideration, less (y) the exercise price per share of Company Common Stock subject thereto, (u) at the Effective Time, an amount, without interest, in respect of each share of Company Common Stock issuable upon the exercise in full of such Vested Company Option, equal to the excess of (A) Per Share Merger Consideration, without interest, over (B) the applicable per share exercise price of such Vested Company Option, (v) the contingent right to receive disbursements of Adjustment Escrow Cash with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of amount, an “Option Payment” and, in the released amountaggregate, with all such Option Payments, the “Options Payment Amount”), without interest, plus (B) in each case in accordance with Section 2.8when, if and to the extent payable hereunder, (w1) an amount in cash, equal to the contingent right product obtained by multiplying the number of Option Shares subject to receive cash disbursements required to be made in connection the Post-Closing Vested Company Option by the Per Share Excess Amount (Amount, if any; plus (2) an amount in cash equal to the product obtained by multiplying the number of Option Shares subject to the Vested Company Option by the Per Share Escrow Release Amount with respect to such share any amounts released to the Equityholders from the Escrow Fund from time to time pursuant to the terms of Company Common Stock issuable upon this Agreement and the exercise Escrow Agreement, if any, plus (3) an amount in full cash, equal to the product obtained by multiplying the number of such Option Shares subject to the Vested Company Option (based on such Company Optionholder’s Pro Rata by the Per Share of the released amount), without interest, in accordance with Section 2.8(e), (x) the contingent right to receive cash disbursements required to be made in connection with the Indemnification Payment (if any) Reserve Fund Release Amount with respect to any amounts released to the Equityholders from the Reserve Fund from time to time pursuant to the terms of this Agreement, if any (such share of Company Common Stock issuable upon aggregate amount described in the exercise in full of such Vested Company foregoing clauses (A) and (B), the “Option (based on such Company Optionholder’s Pro Rata Share Consideration”). Notwithstanding anything to the contrary herein, no Option Consideration shall be paid following the fifth anniversary of the Indemnification Payment), without interest, in accordance with Section 6.22(b), Closing Date and (y) any Option Consideration that otherwise would become payable following such anniversary pursuant to this Agreement instead shall be forfeited by the contingent right to receive cash disbursements required to be made in connection the release former holders of the Stockholder Representative Expense Amount (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in accordance with Section 8.1(b)(iii). Such payments in respect of any such Vested Company Options that are Employee Options without consideration therefor and shall be made paid instead to the holders other Equityholders based on their Pro Rata Portion of such the Fully Diluted Common Number, after excluding the Vested Company Options through the payroll processing system from such calculation, provided, that if such portion of the Surviving Corporation in accordance with standard payroll practices net Option Consideration remains subject to a substantial risk of applicable Tax withholding forfeiture for purposes of Section 409A of the Code as of such fifth anniversary date, such amounts shall not be forfeited and deductions, and such payments in respect of any such Vested Company Options that are Non-Employee Options shall be paid to the Paying Agent for further payment to such the holders of such Non-Employee Options; provided, that, as a condition to payment of any amount owed to the applicable former holders of Vested Company Options that are Non-Employee Optionsas soon as reasonably practicable after such substantial risk of forfeiture lapses, each such holder must have first delivered to the Paying Agent a properly completed IRS Form W-9, or the appropriate version of IRS Form W-8, as applicable. For purposes of calculating the aggregate amount of consideration payable but in respect of each Vested Company Option held by a Company Optionholder pursuant to this Section 2.1(b)(i), (x) all shares of Company Common Stock issuable upon the exercise in full no event later than March 15 of the Vested Company Options held by each year following the year in which such Company Optionholder shall be aggregated, and (y) the amount substantial risk of cash to be paid to each such Company Optionholder shall be rounded down to the nearest whole cent. To the extent the vesting of a Company Option is accelerated by action of the Company (and not automatically in accordance with its terms due to the occurrence of the Effective Time) and such Company Option becomes a Vested Company Option (an “Accelerated Option”), then, in addition to any documents such Company Optionholder must provide pursuant to this Section 2.1(b)(i), as a condition to payment of any amount owed in respect of such Accelerated Option, such Company Optionholder (an “Accelerated Optionholder”) shall provide a release to the Buyer Released Parties in substantially the form provided in Section 10.14 (the “Optionholder Release”)forfeiture lapses.
(ii) Immediately If any Vested Company Options issued and outstanding as of immediately prior to the Effective Time, each Unvested Company Option and Company Option that is an OutTime were out-of-the-Money money as of such time (i.e. the Estimated Per Share Merger Consideration is less than the exercise price per share of such Vested Company Option) and any Additional Payment is made, then, prior to distributing such Additional Payment, the Per Share Merger Consideration shall be recomputed using the Post-Closing Adjusted Aggregate Merger Consideration in clause (i) of the definition of Estimated Per Share Merger Consideration after giving effect to such Additional Payment and any prior Additional Payments (instead of the Estimated Initial Merger Consideration) (such recomputed amount the “Adjusted Per Share Amount”) and, if such calculation were to result in any of such out-of-the money Vested Company Options becoming in-the-money Vested Company Options (had such calculation been made on the Closing Date), then such Vested Company Options (the “Affected Securities”) shall be included in the calculation of Fully Diluted Common Number, Aggregate Exercise Price and the Pro Rata Portion from and after the date of such Additional Payment for purposes of determining the allocation of such Additional Payments pursuant to this Agreement, the Option and that is outstanding shall become be cancelled, terminated and extinguished without any consideration being payable in respect thereofCancellation Agreements, and have no further force or effectthe Warrant Cancellation Agreements; provided that holders of Affected Securities shall only receive an amount equal to the Adjusted Per Share Amount minus the exercise price of the applicable Affected Securities with respect to the initial Additional Payment that results in such Vested Company Options becoming Affected Securities (and the remaining portion of such Additional Payment shall be allocated among holders of other Company securities pursuant to this Agreement, the Option Cancellation Agreements, and the Warrant Cancellation Agreements (other than out-of-the-money Vested Company Options), pro rata based on their respective portions of the so-recomputed Fully Diluted Common Number).
(iii) Prior to the Effective Time, and subject to the prior review of Buyer, the Company shall take all any actions reasonably necessary to effect the transactions anticipated by contemplated under this Section 2.1 2.6(d) under the Company Equity Plan and any Contract applicable to any all agreements evidencing Company Option (whether written or oral, formal or informal), including delivering all required notices, obtaining all necessary approvals and consents, and delivering evidence satisfactory to Buyer that all necessary determinations by the Board or applicable committee of the Board to accelerate and terminate all Vested Company Options have been made. The Company shall take all actions necessary to terminate the Company Equity Plan prior to the Effective TimeOptions.
(iv) To the extent applicable, any allocable portion of the Total Merger Consideration to be made following the Closing to a holder of Vested Company Options in accordance with this Agreement, if any, shall be paid at the same time as any related payments are made to Company Stockholders in a manner that satisfies Regulation Section 1.409A-3(i)(5)(iv) of the Code, to the extent necessary to satisfy the requirements of Section 409A of the Code.
Appears in 1 contract
Treatment of Company Options. (a) The Company shall take all actions necessary, including using reasonable efforts to obtain any requisite consents of the holders of the Company Options, to provide that, as of immediately prior to the First Effective Time, (i) No Company Options shall be assumed, substituted or continued by Buyer or the Company in connection with the Merger or the other transactions contemplated hereby. Immediately prior to the Effective Time, each Vested Company Option shall be cancelled in part in respect of a cash payment as provided in Section 3.06(b) and shall be converted in part as provided in Section 3.06(c) and (ii) each Unvested Company Option shall be converted as provided in Section 3.06(d).
(b) Each Vested Company Option issued and outstanding immediately prior to the First Effective Time will be automatically into deemed for all purposes to represent the right to receive, subject to Section 3.02(b):
(i) in the case of a Vested Company Option with respect to which an Assumed Vested Company Option Election has been properly made and not revoked or lost pursuant to Section 3.03 (each, an “Assumed Electing Option”), the Assumed Vested Company Option Election Consideration;
(ii) in the case of a Vested Company Option with respect to which an Optionholder Standard Mixed Election has been properly made and not revoked or lost pursuant to Section 3.03 or with respect to which no election has been made (each, a “Standard Mixed Electing Option”), the Optionholder Standard Mixed Election Consideration;
(iii) in the case of a Vested Company Option with respect to which an Optionholder Cash Weighted Mixed Election has been properly made and not revoked or lost pursuant to Section 3.03 (each, a “Cash Weighted Mixed Electing Option”), the Optionholder Cash Weighted Mixed Election Consideration; and
(iv) notwithstanding the foregoing, (A) with respect to the holders of Company Options set forth on Section 3.06(b)(iv) of the Company Disclosure Letter, the Optionholder Cash Weighted Mixed Election Percentage with respect to each share of Company Common Stock subject thereto, (u) at the Effective Time, an amount, without interest, in respect of each share of Company Common Stock issuable upon the exercise in full of such Vested Company Option, equal to the excess of (A) Per Share Merger Consideration, without interest, over (B) the applicable per share exercise price of such Vested Company Option, (v) the contingent right to receive disbursements of Adjustment Escrow Cash with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on held by each such Company Optionholder’s Pro Rata Share of the released amount), without interest, in each case in accordance with Section 2.8, (w) the contingent right to receive cash disbursements required to be made in connection the Post-Closing Excess Amount (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in accordance with Section 2.8(e), (x) the contingent right to receive cash disbursements required to be made in connection with the Indemnification Payment (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the Indemnification Payment), without interest, in accordance with Section 6.22(b), and (y) the contingent right to receive cash disbursements required to be made in connection the release of the Stockholder Representative Expense Amount (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in accordance with Section 8.1(b)(iii). Such payments in respect of any such Vested Company Options that are Employee Options holder shall be made to the holders of such Vested Company Options through the payroll processing system of the Surviving Corporation in accordance with standard payroll practices net of applicable Tax withholding and deductions, and such payments in respect of any such Vested Company Options that are Non-Employee Options shall be paid to the Paying Agent for further payment to such the holders of such Non-Employee Optionsas set forth therein; provided, that, as a condition that in no event shall the foregoing adjustment result in the aggregate cash amount payable to payment of any amount owed to the Pre-Closing Holders and holders of Vested Company Options exceeding the Closing Cash Consideration, and (B) the Adjusted Stockholder Cash Weighted Mixed Election Percentage with respect to each Cash Weighted Mixed Electing Share shall be adjusted to such an amount so as to preserve the intended Optionholder Cash Weighted Mixed Election Percentage with respect to the Vested Company Options held by the individuals set forth on Section 3.06(b)(iv) of the Company Disclosure Letter, as compared to the Optionholder Cash Weighted Mixed Election Percentage for all Cash Weighted Mixed Electing Options.
(c) With respect to each Eligible Cash-Out Vested Company Option outstanding as of immediately prior to the First Effective Time that are Non-Employee Optionsis entitled to receive a cash payment as set forth in Section 3.06(b), such portion of the Vested Company Option shall be automatically canceled (such cancelled portion, the “Cancelled Option Portion”) in exchange for such cash payment, and Acquiror shall, within five Business Days after the First Effective Time, cause the Company’s (or the Surviving Corporation’s) payroll provider, on behalf of the Company, to deliver to each holder of a Vested Company Option the amount of cash such holder must have first delivered has the right to receive pursuant to Section 3.06(b). Notwithstanding anything in this Section 3.06 to the Paying Agent a properly completed IRS Form W-9contrary, or the appropriate version of IRS Form W-8, as applicable. For purposes of calculating the aggregate cash amount of consideration payable in respect of each Vested Company Option held by a Company Optionholder pursuant to this Section 2.1(b)(i), (x3.06(b) all shares of Company Common Stock issuable upon the exercise in full of the Vested Company Options held by each such Company Optionholder shall be aggregated, and (y) the amount of cash to be paid to each such Company Optionholder shall be rounded down to the nearest whole cent. To the extent the vesting of a Company Option is accelerated by action of the Company (and not automatically in accordance with its terms due to the occurrence of the Effective Time) and such Company Option becomes a Vested Company Option (an “Accelerated Option”), then, in addition to any documents such Company Optionholder must provide pursuant to this Section 2.1(b)(i), as a condition to payment of any amount owed in respect of such Accelerated Option, such Company Optionholder (an “Accelerated Optionholder”) shall provide a release to the Buyer Released Parties in substantially the form provided in Section 10.14 (the “Optionholder Release”).
(ii) Immediately prior to the Effective Time, each Unvested Company Option and Company Option that is an Out-of-the-Money Option and that is outstanding shall become be cancelled, terminated and extinguished without any consideration being payable in respect thereof, and have no further force or effect.
(iii) Prior to the Effective Time, and subject to the prior review of Buyer, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.1 under the Company Equity Plan and any Contract applicable to any Company Option (whether written or oral, formal or informal), including delivering all required notices, obtaining all necessary approvals and consents, and delivering evidence satisfactory to Buyer that all necessary determinations by the Board or applicable committee of the Board to accelerate and terminate all Vested Company Options have been made. The Company shall take all actions necessary to terminate the Company Equity Plan prior to the Effective Time.
(iv) To the extent applicable, any allocable portion of the Total Merger Consideration to be made following the Closing to a holder of Vested Company Options in accordance with this Agreement, if any, shall be paid at the same time as any related payments are made to Company Stockholders determined in a manner that satisfies Regulation Section 1.409A-3(i)(5)(iv) of the Code, to the extent necessary to satisfy consistent with the requirements of Section 409A of the Code.
(d) As of immediately prior to the First Effective Time, by virtue of the First Merger and without any action on the part of the holders thereof, a portion of each Vested Company Option that is then outstanding shall be assumed and converted into an option to purchase shares of Acquiror Common Stock, as described in this Section 3.06(d) (such assumed portion, the “Vested Acquiror Option”). The number of shares of Company Common Stock subject to such portion of the Vested Acquiror Option shall equal (i) the total number of shares of Company Common Stock subject to such Vested Company Option minus (ii) the number of shares (if any) of Company Common Stock subject to the Cancelled Option Portion of such Vested Company Option. Each such Vested Acquiror Option as so assumed and converted shall continue to have, and shall be subject to, the same terms and conditions as applied to the Vested Company Option immediately prior to the First Effective Time (but taking into account any changes thereto by reason of this Section 3.06(d)). As of immediately prior to the First Effective Time, each such Vested Acquiror Option as so assumed and converted shall be an option to acquire that number of whole shares of Acquiror Common Stock (rounded down to the nearest whole share) equal to the product of (i) the number of shares of Company Common Stock subject to such Vested Company Option and (ii) the Exchange Ratio, at an exercise price per share of Acquiror Common Stock (rounded up to the nearest whole cent) equal to the quotient obtained by dividing (x) the exercise price per share of Company Common Stock of such Vested Company Option by (y) the Exchange Ratio. Notwithstanding anything in this Section 3.06(d) to the contrary, the exercise price and the number of shares of Acquiror Common Stock subject to the Vested Acquiror Option shall be determined in a manner consistent with the requirements of Section 409A of the Code, and, in the case of Vested Company Option that is intended to qualify as incentive stock options within the meaning of Section 422 of the Code, consistent with the requirements of Section 424 of the Code.
(e) As of immediately prior to the First Effective Time, by virtue of the First Merger and without any action on the part of the holders thereof, each Unvested Company Option that is then outstanding shall be assumed and converted into an option to purchase shares of Acquiror Common Stock (each, an “Unvested Acquiror Option” and, collectively and together with the Vested Acquiror Options, the “Acquiror Options”). Each such Unvested Acquiror Option as so assumed and converted shall continue to have, and shall be subject to, the same terms and conditions as applied to the Unvested Company Option immediately prior to the First Effective Time (but taking into account any changes thereto by reason of this Section 3.06(e)). As of immediately prior to the First Effective Time, each such Unvested Acquiror Option as so assumed and converted shall be an option to acquire that number of whole shares of Acquiror Common Stock (rounded down to the nearest whole share) equal to the product of (i) the number of shares of Company Common Stock subject to such Unvested Company Option and (ii) the Exchange Ratio, at an exercise price per share of Acquiror Common Stock (rounded up to the nearest whole cent) equal to the quotient obtained by dividing (x) the exercise price per share of Company Common Stock of such Unvested Company Option by (y) the Exchange Ratio. Notwithstanding anything in this Section 3.06(e) to the contrary, the exercise price and the number of shares of Acquiror Common Stock subject to the Acquiror Options shall be determined in a manner consistent with the requirements of Section 409A of the Code, and, in the case of Unvested Company Options that is intended to qualify as incentive stock options within the meaning of Section 422 of the Code, consistent with the requirements of Section 424 of the Code.
Appears in 1 contract
Samples: Merger Agreement (Hudson Executive Investment Corp.)
Treatment of Company Options. (i) No Parent will not assume any Company Options shall be assumed, substituted or continued by Buyer or the Company in connection with the Merger or the other transactions contemplated herebyOptions. Immediately prior to At the Effective TimeTime and by virtue of the First Step Merger, each Vested Company Option shall be cancelled and converted automatically into the right to receive, with respect to each share of Company Common Stock subject thereto, (u) at the Effective Time, an amount, without interest, in respect of each share of Company Common Stock issuable upon the exercise in full of such Vested Company Option, equal to the excess of (A) Per Share Merger Consideration, without interest, over (B) the applicable per share exercise price of such Vested Company Option, (v) the contingent right to receive disbursements of Adjustment Escrow Cash with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in each case in accordance with Section 2.8, (w) the contingent right to receive cash disbursements required to be made in connection the Post-Closing Excess Amount (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in accordance with Section 2.8(e), (x) the contingent right to receive cash disbursements required to be made in connection replaced with the Indemnification Payment consideration set forth in this Section 2.7(f) (if any) with respect to such share of the “Cancelled Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the Indemnification Payment), without interest, in accordance with Section 6.22(b), and (y) the contingent right to receive cash disbursements required to be made in connection the release of the Stockholder Representative Expense Amount (if any) with respect to such share of Company Common Stock issuable upon the exercise in full of such Vested Company Option (based on such Company Optionholder’s Pro Rata Share of the released amount), without interest, in accordance with Section 8.1(b)(iiiOptions”). Such payments in respect of any such Vested Cancelled Company Options that are Employee Options shall be made to the holders of such Vested Company Options through will be cancelled and replaced with (A) the payroll processing system right to receive a number of the Surviving Corporation in accordance with standard payroll practices net of applicable Tax withholding and deductions, and such payments in respect of any such Vested Company Options that are Non-Employee Options shall be paid to the Paying Agent for further payment to such the holders of such Non-Employee Options; provided, that, as a condition to payment of any amount owed to the holders of Vested Company Options that are Non-Employee Options, each such holder must have first delivered to the Paying Agent a properly completed IRS Form W-9, or the appropriate version of IRS Form W-8, as applicable. For purposes of calculating the aggregate amount of consideration payable in respect of each Vested Company Option held by a Company Optionholder pursuant to this Section 2.1(b)(i), (x) all whole shares of Company Parent Common Stock issuable upon the exercise in full of the Vested Company Options held by each such Company Optionholder shall be aggregated, and (y) the amount of cash to be paid to each such Company Optionholder shall be rounded down to the nearest whole cent. To share of Parent Common Stock) equal to (1) the extent product of (x) the vesting total number of a shares of Company Common Stock subject to such Vested Company Option is accelerated by action that were issuable upon exercise of the Vested Company (and not automatically in accordance with its terms due Option immediately prior to the occurrence of the Effective Time; multiplied by (y) the excess of (a) the Per Share Closing Merger Consideration Value; over (b) the entire exercise price per share of such Vested Company Option; divided by (2) the Closing Price; and (B) the right to receive a portion of the Earnout Consideration as set forth in Section 2.16, when and if paid, with the amount of any such payment to be determined based on the total number of shares of Company Option becomes a Common Stock subject to such Vested Company Option (an “Accelerated Option”)together, then, in addition to any documents such Company Optionholder must provide pursuant to this Section 2.1(b)(i), as a condition to payment of any amount owed in respect of such Accelerated Option, such Company Optionholder (an “Accelerated Optionholder”) shall provide a release to the Buyer Released Parties in substantially the form provided in Section 10.14 (the “Optionholder ReleaseVested Option Merger Consideration”).
(ii) Immediately Cancelled Company Options that are Unvested Company Options (other than Unvested Company Options that are not held by Continuing Employees or Persons who will continue to be service providers to Parent or its Subsidiaries immediately after the Effective Time, all of which will be cancelled and not replaced) will be cancelled and replaced with (A) the right to receive a number of whole shares of Parent Common Stock (rounded down to the nearest whole share of Parent Common Stock) equal to (1) the product of (x) the total number of shares of Company Common Stock subject to such Unvested Company Option immediately prior to the Effective Time; multiplied by (y) the excess of (a) the Per Share Closing Merger Consideration Value; over (b) the entire exercise price per share of such Unvested Company Option; divided by (2) the Closing Price; and (B) the right to receive a portion of the Earnout Consideration as set forth in Section 2.16, when and if paid, with the maximum amount of any such payment to be determined based on the total number of shares of Company Common Stock subject to such Unvested Company Option (together, the “Unvested Option Merger Consideration”). The Unvested Option Merger Consideration will be paid to the holder in accordance with the vesting schedule applicable to the Unvested Company Option prior to the Effective Time, each subject to the satisfaction of any vesting conditions (including continued service) that applied to the Unvested Company Option and Company prior to the Effective Time. If the service of a holder of Unvested Option that is an Out-of-the-Money Merger Consideration with Parent or one of its Subsidiaries terminates prior to the vesting of the Unvested Option and that is outstanding Merger Consideration, then Parent shall become be cancelled, terminated and extinguished without any consideration being payable in respect thereof, and have no further force obligation to pay any Unvested Option Merger Consideration to such holder, except that such holder shall still be entitled to receive, in respect of the portion of holder’s Unvested Option Merger Consideration that vested prior to or effectin connection with such termination of service, any amounts payable pursuant to Section 2.16, when and if paid.
(iii) Payment of the Vested Option Merger Consideration and any payment of the Unvested Option Merger Consideration will be subject to applicable Tax withholding in accordance with the procedures implemented by Parent in its reasonable discretion. To the extent necessary to comply with applicable Law, Parent may limit the sale of transfer of any shares of Parent Common Stock paid pursuant to any Vested Option Merger Consideration or earned Unvested Option Merger Consideration.
(iv) Prior to the Effective Time, and subject to the prior review and approval of BuyerParent, the Company shall take all actions necessary to effect the transactions anticipated contemplated by this Section 2.1 2.7(f) under the Plan, and all Company Equity Plan Option agreements and any Contract other applicable to any plan or arrangement of the Company Option (whether written or oral, formal or informal), including delivering adopting all required noticesresolutions, giving all requisite notices and obtaining all necessary approvals and consents, and delivering evidence satisfactory appropriate consents from each holder of Company Options. Materials to Buyer that all necessary determinations by the Board or applicable committee of the Board to accelerate and terminate all Vested Company Options have been made. The Company shall take all actions necessary to terminate the Company Equity Plan prior be submitted to the Effective Time.
(iv) To the extent applicable, any allocable portion holders of the Total Merger Consideration to be made following the Closing to a holder of Vested Company Options in accordance connection with any notice required under this Agreement, if any, Section 2.7(f) shall be paid at the same time as any related payments are made subject to Company Stockholders in a manner that satisfies Regulation Section 1.409A-3(i)(5)(iv) of the Code, to the extent necessary to satisfy the requirements of Section 409A of the Codereview and approval by Parent.
Appears in 1 contract
Samples: Merger Agreement (Solarcity Corp)
