Common use of Treatment of Stock Options and Other Stock-Based Awards Clause in Contracts

Treatment of Stock Options and Other Stock-Based Awards. (a) Prior to the Effective Time, the Board of Directors of the Company (or, if appropriate, any committee thereof) shall adopt appropriate resolutions and take all other actions necessary and appropriate to provide that, immediately prior to the Effective Time, each option to purchase shares of Company Common Stock (a “Company Option”) granted under the equity incentive plans of the Company or under any and all individual consultant, employee, director, independent contractor, independent sales personnel or distributor agreement (collectively, the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall be cancelled and, in exchange therefor, each former holder of any such cancelled Company Option shall be entitled to receive, in consideration of the cancellation of such Company Option and in settlement therefor, a payment (comprised of Parent Common Stock and cash) equal to the product of (i) the total number of shares of Company Common Stock previously subject to such Company Option and (ii) the excess, if any, of the Merger Consideration Value over the exercise price per share of Company Common Stock previously subject to such Company Option (such amounts payable hereunder being referred to as the “Per Option Consideration”). From and after the Effective Time, any such cancelled Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to the payment of an allocable portion of the Aggregate Option Consideration. At, or as promptly as reasonably practicable after the Effective Time, Parent shall or shall cause the Surviving Corporation to deliver in exchange for each Company Option which is canceled pursuant to this Section 4.6(a) a payment (comprised of Parent Common Stock and cash) equal to the product of (i) the Aggregate Option Consideration and (ii) a fraction, the numerator of which is the Per Option Consideration for such Company Option and the denominator of which is the aggregate of the Per Option Consideration for all Company Options. The portion of each such payment consisting of cash shall be equal to the ratio which (i) the value of the Aggregate Adjusted Cash Consideration bears to (ii) the value of the Aggregate Consideration (based, for such purposes, on the Parent Reference Price in respect of the value of the Parent Common Stock that comprised part of the Aggregate Consideration). The portion of each such payment consisting of Parent Common Stock shall be equal to the ratio which (i) the value of the Aggregate Stock Consideration bears to (ii) the value of the Aggregate Consideration (based, for such purposes, on the Parent Reference Price in respect of the value of the Parent Common Stock that comprised part of the Aggregate Consideration). The cash and shares payable pursuant to the preceding sentence shall be subject to any applicable withholding or other taxes required by Applicable Law to be withheld, with any such amounts being withheld from the cash payment to the maximum extent possible.

Treatment of Stock Options and Other Stock-Based Awards. (a) Prior to Upon payment by the Effective TimeCompany of the Recapitalization Dividend, the Board of Directors of the Company (or, if appropriate, any committee thereof) shall adopt appropriate resolutions and take all other actions necessary and appropriate to provide that, immediately prior to the Effective Time, adjust each option to purchase shares a share of Company Common Stock (each, a “Company Stock Option”) granted under by reducing the equity incentive plans exercise price of each such Company Stock Option by the amount payable in respect of one Share in connection with the payment of the Recapitalization Dividend, as determined by the Company or under any and all individual consultant, employee, director, independent contractor, independent sales personnel or distributor agreement (collectively, the “in its sole discretion. Each Company Stock Plans”)Option, whether vested or unvested, that is outstanding immediately prior to the Effective Time and that is an In-the-Money Option shall, as of the Effective Time, become fully vested. At the Closing, each In-the-Money Option shall be cancelled and, in exchange therefor, each former and converted automatically into the right of the holder of any such cancelled Company Option shall be entitled thereof to receive, subject to the holder’s execution and delivery to the Company of an acknowledgment in consideration the form reasonably satisfactory to the Company and Parent (the “Optionholder Acknowledgement”): (i) an amount of cash equal to the product of the cancellation Option Spread Value and the Total Cash Percentage (the “Recapitalization Option Cash Consideration”), (ii) an amount of such Company Option and Verso First Lien Notes (valued at fair market value as determined by the Company’s Board of Directors in settlement therefor, a payment (comprised its sole discretion after taking into account the trading price of Parent Common Stock and cashthe Existing Verso First Lien Notes) equal to the product of the Option Spread Value and the Total Note Percentage (ithe “Recapitalization Option Note Consideration”), and (iii) the total a number of shares of Company Common Stock previously subject to such Company Option and (ii) the excess, if any, of the Merger Consideration Value over the exercise price per share of Company Common Stock previously subject to such Company Option (such amounts payable hereunder being referred to as the “Per Option Consideration”). From and after the Effective Time, any such cancelled Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to the payment of an allocable portion of the Aggregate Option Consideration. At, or as promptly as reasonably practicable after the Effective Time, Parent shall or shall cause the Surviving Corporation to deliver in exchange for each Company Option which is canceled pursuant to this Section 4.6(a) a payment (comprised of Parent Common Stock and cash(valued at the Parent Trading Price) equal to the product of the Option Spread Value and the Total Share Percentage (i) the Aggregate “Recapitalization Option Share Consideration”), in each case as reasonably determined by the Company’s Board of Directors based on the Waterfall Schedule; provided that the Recapitalization Option Cash Consideration, the Recapitalization Option Note Consideration and the Recapitalization Option Share Consideration shall each be reduced on a Relative Recapitalization Option Pro Rata Basis by the Option Withholding Amount. Notwithstanding the foregoing, if a holder of In-the-Money Options does not deliver an Optionholder Acknowledgement to the Company, then each In-the-Money Option held by such holder shall be cancelled and converted automatically into the right of such holder to receive (iix) a fraction, the numerator of which is the Per Option Consideration for such Company Option and the denominator of which is the aggregate of the Per Option Consideration for all Company Options. The portion of each such payment consisting an amount of cash shall be equal to the ratio which (i) the value product of the Aggregate Adjusted Option Spread Value and the Option Cash Consideration bears to Percentage (iithe “Option Cash Consideration”), (y) an amount of Verso First Lien Notes (valued at fair market value as determined by the value Company’s Board of Directors in its sole discretion after taking into account the trading price of the Aggregate Consideration (based, for such purposes, on Existing Verso First Lien Notes) equal to the Parent Reference Price in respect product of the value Option Spread Value and the Option Note Consideration Percentage (the “Option Note Consideration”), and (z) a number of the Parent Common Stock that comprised part of the Aggregate Consideration). The portion of each such payment consisting shares of Parent Common Stock shall be (valued at Parent Trading Price) equal to the ratio which (i) the value product of the Aggregate Option Spread Value and the Option Share Consideration Percentage (the “Option Share Consideration”), each as reasonably determined by the Company’s Board of Directors based on the Waterfall Schedule; provided that the Option Cash Consideration, the Option Note Consideration and the Option Share Consideration shall each be reduced on a Relative Option Pro Rata Basis by the Option Withholding Amount. The Surviving Corporation or one of its Subsidiaries, as applicable, shall pay or issue, as the case may be, to the former holders of In-the-Money Options the consideration described in this Section 2.3(a) on or as soon as reasonably practicable following the Closing Date through the Company’s payroll system; provided that the recipients thereof shall be required, as a condition of receiving such consideration, to execute a Stockholder Release. All Company Stock Consideration bears to (ii) the value Options that are Out-of-the-Money Options shall automatically be canceled and terminated as of the Aggregate Consideration Effective Time without payment and shall be of no further force or effect. As of the Effective Time, all Company Stock Options shall no longer be outstanding and shall automatically cease to exist, and each holder of a Company Stock Option shall cease to have any rights with respect thereto, except the right to receive the payments, if any, specified in this Section 2.3(a). The Company shall deliver written notice to each holder of a Company Stock Option informing such holder of the effect of the Merger on the Company Stock Options (basedwhich notice, for such purposesthe avoidance of doubt, on the Parent Reference Price in respect of the value of the Parent Common Stock that comprised may be included as part of the Aggregate ConsiderationOptionholder Acknowledgements contemplated by this Section 2.3(a). The cash and shares payable pursuant to , as determined by the preceding sentence shall be subject to any applicable withholding or other taxes required by Applicable Law to be withheld, with any such amounts being withheld from the cash payment to the maximum extent possibleCompany in its sole discretion).