Common use of Stock Options; Warrants Clause in Contracts

Stock Options; Warrants. (a) Except with respect to the stock options set forth on Section 4.3(a) of the Target Disclosure Schedule (the “Excepted Options”), Target represents and warrants that each stock option of Target (the “Target Options”) that is not fully exercisable as of the date of this Agreement will automatically become fully vested and exercisable immediately prior to the Effective Time pursuant to the terms of the applicable employee benefit plan and other agreements. The consideration for the cancellation of each Target Option shall be (x) the amount by which the Merger Consideration exceeds the per share exercise price of such Target Option multiplied by (y) the number of Target Common Shares covered by the outstanding portion of the cancelled Target Option; provided that if the exercise price of such Target Option is equal to or greater than the Merger Consideration, such Target Option shall be cancelled without any cash payment being made in respect thereof. Any payment made pursuant to this Section 4.3(a) shall be reduced by any income or employment Tax withholding required under (i) any applicable state or local Tax laws or (ii) any other applicable laws. Each Target Option shall be cancelled and no longer be outstanding at or immediately prior to the Effective Time. The Surviving Company shall pay such consideration to the holders of Target Options promptly after the Effective Time, but in no event more than two (2) Business Days after the Effective Time. Target will take any and all actions necessary on or before the Effective Time to terminate all Excepted Options as provided in Section 4.3(c). (b) Target shall cause each warrant of Target (the “Target Warrants”) to become fully exercisable immediately prior to the Effective Time. The consideration for the cancellation of each Target Warrant shall be (x) the amount by which the Merger Consideration exceeds the per share exercise price of such Target Warrant multiplied by (y) the number of Target Common Shares covered by the outstanding portion of the cancelled Target Warrant. Each Target Warrant shall be cancelled and no longer be outstanding at or immediately prior to the Effective Time. The Surviving Company shall pay such consideration to the holders of Target Warrants promptly after the Effective Time, but in no event more than two (2) Business Days after the Effective Time. (c) With respect to the Excepted Options, each Excepted Option that is not fully exercisable and that is outstanding immediately prior to the Effective Time, will automatically become fully vested and exercisable immediately prior to the Effective Time. Prior to the Effective Time, Target shall cause each holder of an Excepted Option to enter into a written agreement, substantially in the form attached hereto as Exhibit B, pursuant to which the aggregate number of such Excepted Options will be canceled at the Effective Time and converted into the right to receive a $10.00 cash payment, without interest (the “Option Waiver, Cancellation and Release Agreement”). Each optionholder who holds an Excepted Option that has been canceled (a “Cancelled Excepted Option”) shall have no rights with respect to such Cancelled Excepted Option to receive any other consideration in connection with the Merger or otherwise. Any payments made to a holder of an Excepted Option will be reduced by any income or employment Tax withholding required under (x) the Code, (y) any applicable state or local Tax laws, or (z) any other applicable laws. To the extent that any amounts are so withheld, those amounts shall be treated as having been paid to the holder of a Cancelled Excepted Option for all purposes under this Agreement. Target shall make the payments in respect of the Cancelled Excepted Options as promptly as practicable following the cancellation of such Cancelled Excepted Options as contemplated by this Section 4.3(c).