Common use of Initial Equity Grant Clause in Contracts

Initial Equity Grant. As soon as practicable after the effectiveness of the Restructuring, the Ultimate Corporate Parent shall grant the Director a stock option (the “Initial Option”) for the purchase of 1,280,572 shares of common stock of the Ultimate Corporate Parent (the “Initial Shares”) at a purchase price per share equal to the fair market value per share of common stock of the Ultimate Corporate Parent on the date of grant as determined by the Ultimate Corporate Parent Board based on the results of a Section 409A valuation. The Company hereby represents and warrants that the Initial Shares will represent a one and one half percent (1.5%) ownership interest in the Ultimate Corporate Parent as of the date of grant (based on the number of shares of common stock of the Ultimate Corporate Parent then outstanding, assuming the issuance of all shares of capital stock reserved for future issuance under any stock incentive plan of the Ultimate Corporate Parent, the exercise of all outstanding options, warrants and other rights to purchase capital stock of the Ultimate Corporate Parent and the conversion of all securities convertible, directly or indirectly, into common stock of the Ultimate Corporate Parent (the method of such calculation, a “Fully Diluted Basis”)). Subject to the acceleration provisions set forth in Sections 3.2(c) and 3.5, the Initial Option will vest, starting on the date hereof (the “Vesting Commencement Date”), at the rate of 1/48th of the Initial Shares for each consecutive month that the Director continues to provide services to the Ultimate Corporate Parent or any of its parent companies or subsidiaries, including the LLC Parent and the Company (collectively, the “Company Entities”), from and after the Vesting Commencement Date until the date that is four (4) full years after the Vesting Commencement Date, at which time, subject to the Director’s continued service, the Initial Option will be fully vested.