Common use of Treatment of Equity Awards and Espp Clause in Contracts

Treatment of Equity Awards and Espp. (a) Substantially concurrently with the approval of this Agreement by the Company Board, the Compensation Committee of the Company Board has taken all actions so that (i) each option to acquire Shares granted under the Genelabs Technologies, Inc. 1995 Stock Option Plan, Genelabs Technologies, Inc. 2001 Stock Option Plan and Genelabs Technologies, Inc. 2007 Omnibus Stock Incentive Plan, or any other Company stock plan (the “Company Stock Plans” and each such option, an “Option”), that is outstanding and unexercised, whether vested or unvested immediately prior to the Closing shall, by virtue of the occurrence of the Closing and without any action on the part of Purchaser, the Company or the holder thereof, be cancelled and shall solely represent the right to receive from the Purchaser in exchange, at the Closing or as soon as practicable thereafter, an amount in cash equal to the product of (y) the number of Shares subject to such Option and (z) the excess, if any, of the Offer Price, without interest, over the exercise price per Share subject to such Option, less any required withholding Taxes; and (ii) that each Option that is outstanding and unexercised, whether vested or unvested, shall be amended such that each such Option shall not be exercisable during the period commencing upon acceptance by Purchaser of Shares tendered in the Offer and ending on twelve days following (and including) such date. (b) For the avoidance of doubt, pursuant to such action of the Compensation Committee of the Company Board described in clause (a)(i), if the exercise price per Share of an Option, whether vested or unvested as of the Closing, is equal to or greater than the Offer Price, then by virtue of the occurrence of the Closing and without any action on the part of Purchaser, the Company or the holder thereof, the Option will be cancelled without payment of any consideration to the holder. (c) Substantially concurrently with the approval of this Agreement, the Compensation Committee of the Company Board or the Company Board has taken any and all actions with respect to the Company’s 2001 Employee Stock Purchase Plan (the “ESPP”) as are necessary to provide that: (i) all offering periods under the ESPP shall be terminated on November 5, 2008 and no further offering periods will commence prior to the Closing, (ii) after the date hereof, no participant in the ESPP shall be entitled to increase the rate of his or her payroll deductions into his or her account under the ESPP and (iii) the ESPP will terminate, prior to or effective immediately as of the Closing. (d) The Company Stock Plans shall terminate as of Closing, and any and all rights under any provisions in any other plan, program or arrangement, including any Company Plan, providing for the issuance or grant of any other interest in respect of the capital stock of the Company (other than the ESPP, which is addressed in Section 3.2(c), and the right to receive the payment contemplated by Section 3.2(a)) shall be canceled as of the Closing. (e) The Company shall take any actions reasonably necessary to effectuate the provisions of this Section 3.2; it being understood that the intention of the parties is that immediately following the Purchase Time no holder of any Option or Restricted Share or any participant in any Company Plan or other employee benefit arrangement of the Company shall have any right thereunder to acquire any capital stock (including any “phantom” stock or stock appreciation rights) of the Company, the Surviving Corporation or any of their Subsidiaries pursuant to such Company Plan or other arrangement. Any notice which the Company shall deliver to the holders of Options or Restricted Shares or the participants in any other Company Plan setting forth such holders’ rights pursuant to this Agreement shall be reasonably acceptable to Parent.

Treatment of Equity Awards and Espp. (a) Substantially concurrently with At the approval of this Agreement by the Effective Time, each Company Board, the Compensation Committee of the Company Board has taken all actions so that (i) each option to acquire Shares granted under the Genelabs Technologies, Inc. 1995 Stock Option Plan, Genelabs Technologies, Inc. 2001 Stock Option Plan and Genelabs Technologies, Inc. 2007 Omnibus Stock Incentive Plan, or any other Company stock plan (the “Company Stock Plans” and each such option, an “Option”), that is outstanding and unexercised, whether vested or unvested unexercised immediately prior to the Closing Effective Time (other than a Company Option covered by Section 2.4(b) and Section 2.4(c)) shall, by virtue of the occurrence of the Closing and without any action on the part of PurchaserParent, the Company or the holder thereof, cease to represent a right to acquire Shares and shall be assumed and converted automatically into an option to purchase the number of shares of Parent Class A Common Stock (each, an “Adjusted Option”) equal to the product obtained by multiplying (i) the number of Shares subject to the Company Option immediately prior to the Effective Time, by (ii) the Exchange Ratio, with any fractional shares rounded down to the nearest whole share. Each Adjusted Option shall have an exercise price per share of Parent Class A Common Stock equal to (x) the per share exercise price for Shares subject to the corresponding Company Option immediately prior to the Effective Time, divided by (y) the Exchange Ratio, rounded up to the nearest whole cent. Each Adjusted Option shall otherwise be subject to the same terms and conditions applicable to the corresponding Company Option under the applicable Company Stock Plans and the agreements evidencing grants thereunder, including vesting terms. (b) On the Business Day immediately following Closing, each Company UK Option that is outstanding and unexercised immediately prior to the Effective Time (other than a Company UK Option covered by Section 2.4(c)) shall, provided the holder thereof has so agreed on or prior to the Business Day prior to the Closing Date (absent which agreement, such Company UK Option shall lapse as of immediately prior to the Effective Time), cease to represent a right to acquire the Shares and shall be assumed and converted automatically into an Adjusted Option on the terms set forth in Section 2.4(a) above. The Company and Parent shall take commercially reasonable efforts to ensure that any replacement of a Company UK Option hereunder shall satisfy paragraph 27 of Schedule 4 to the UK Income Tax (Earnings and Pensions) Xxx 0000. (c) At the Effective Time, each unvested Company Option held by any former employee or former service provider of the Company or a Company Subsidiary that is outstanding and unexercised as of immediately prior to the Effective Time shall be cancelled without the payment of any consideration and each vested Company Option held by any former employee or former service provider of the Company or a Company Subsidiary that is outstanding and unexercised as of immediately prior to the Effective Time shall, without any action on the part of Parent, the Company or the holder thereof, be cancelled and shall solely represent the converted into a right to receive from the Purchaser in exchange, at the Closing or as soon as practicable thereafter, an amount in cash number of shares of Parent Class A Common Stock equal to the product of (yi) the number of Shares subject to such the Company Option and (z) immediately prior to the Effective Time multiplied by the excess, if any, of (x) the Offer Price, without interest, Company Share Value over (y) the per share exercise price per Share for Shares subject to such Optionthe corresponding Company Option immediately prior to the Effective Time, less any required withholding Taxes; and divided by (ii) that the Company Share Value multiplied by (iii) the Exchange Ratio, with any fractional shares rounded down to the nearest whole share. (d) At the Effective Time, each Option Company RSU (other than a Company RSU covered by Section 2.4(e)) that is outstanding and unexercisedimmediately prior to the Effective Time, whether or not vested or unvestedissuable, shall be amended such that each such Option shall not be exercisable during the period commencing upon acceptance by Purchaser of Shares tendered in the Offer and ending on twelve days following (and including) such date. (b) For the avoidance of doubtshall, pursuant to such action of the Compensation Committee of the Company Board described in clause (a)(i), if the exercise price per Share of an Option, whether vested or unvested as of the ClosingEffective Time, is equal to or greater than the Offer Price, then by virtue of the occurrence of the Closing automatically and without any action on the part of Purchaserthe holder thereof, be assumed and converted automatically into a restricted stock unit with respect to a number of shares of Parent Class A Common Stock (each, an “Assumed RSU”) equal to the product obtained by multiplying (i) the total number of Shares subject to the Company RSU immediately prior to the Effective Time by (ii) the Exchange Ratio, with any fractional shares rounded down to the nearest whole share. Each Assumed RSU shall otherwise be subject to the same terms and conditions applicable to the corresponding Company RSU under the applicable Company Stock Plans and the agreements evidencing grants thereunder, including vesting terms. (e) At the Effective Time, each Company RSU held by a current or former non-employee director of the Company shall, without any action on the part of Parent, the Company or the holder thereof, the Option will be cancelled without payment of any consideration to the holder. (c) Substantially concurrently with the approval of this Agreement, the Compensation Committee of the Company Board or the Company Board has taken any and all actions with respect to the Company’s 2001 Employee Stock Purchase Plan (the “ESPP”) as are necessary to provide that: (i) all offering periods under the ESPP shall be terminated on November 5, 2008 and no further offering periods will commence prior to the Closing, (ii) after the date hereof, no participant in the ESPP shall be entitled to increase the rate of his or her payroll deductions converted into his or her account under the ESPP and (iii) the ESPP will terminate, prior to or effective immediately as of the Closing. (d) The Company Stock Plans shall terminate as of Closing, and any and all rights under any provisions in any other plan, program or arrangement, including any Company Plan, providing for the issuance or grant of any other interest in respect of the capital stock of the Company (other than the ESPP, which is addressed in Section 3.2(c), and the a right to receive the payment contemplated by Section 3.2(a)number of shares of Parent Class A Common Stock equal to (i) shall be canceled as the number of the Closing. (e) The Company shall take any actions reasonably necessary Shares subject to effectuate the provisions of this Section 3.2; it being understood that the intention of the parties is that immediately following the Purchase Time no holder of any Option or Restricted Share or any participant in any Company Plan or other employee benefit arrangement of the Company shall have any right thereunder to acquire any capital stock (including any “phantom” stock or stock appreciation rights) of the Company, the Surviving Corporation or any of their Subsidiaries pursuant to such Company Plan or other arrangement. Any notice which the Company shall deliver RSU immediately prior to the holders of Options or Restricted Shares or Effective Time multiplied by (ii) the participants in Exchange Ratio, with any other Company Plan setting forth such holders’ rights pursuant fractional shares rounded down to this Agreement shall be reasonably acceptable to Parentthe nearest whole share.