Common use of Target Options Clause in Contracts

Target Options. (a) Target and Acquiror acknowledge that at the Effective Time, all Target Options shall terminate pursuant to section 10.2 of the Target Stock Option Plan, provided that holders of Target Options shall have the right immediately prior to the Effective Time to exercise Target Options in whole or in part whether or not the applicable vesting requirements have been satisfied. Target shall take all necessary steps to ensure that the Target Stock Option Plan and all Target Options are terminated at the Effective Time. Target shall deliver written notice to all holders of Target Options prior to the Effective Date advising such holders that: (1) the holders of Target Options may exercise Target Options in order to participate in the Arrangement as holders of Target Shares, with such exercise being conditional on the closing of the Arrangement; (2) Target will make the election referred to in Section 5.3(b) below in respect of the payment of the exercise price by the holders of Target options and the issuance of Target Shares or payment of cash to such holders; and (3) all Target Options will be terminated pursuant to section 10.2 of the Target Stock Option Plan upon the closing of the Arrangement. (b) Target shall elect pursuant to section 8.2 of the Target Stock Option Plan that the payment of the exercise price by the holders of Target Options who exercise Target Options (the "Exercising Optionholders") and the issuance of Target Shares or payment of cash to the Exercising Optionholders shall be pursuant to section 8.2(c)(i) of the Target Stock Option Plan, provided that if the aggregate of (i) the number of Acquiror Shares that would be issued to all Exercising Optionholders under the Arrangement in respect of the Target Shares issued upon exercise of their Target Options (the "Optionholder Number") and (ii) the aggregate of the number of Acquiror Shares to be issued to Target Shareholders (excluding the Optionholder Number) pursuant to the Arrangement and the number of Acquiror Shares issuable to holders of Target Warrants and Target Exchangeable Shares following the Arrangement (the "Non-Optionholder Share Number"), exceeds the Share Maximum, then the payment of the exercise price by Exercising Optionholders and the issuance of Target Shares and payment of cash to the Exercising Optionholders shall be apportioned between sections 8.2(c)(i) and 8.2(c)(ii) of the Target Stock Option Plan to provide for a reduction in the Optionholder Number (on a pro rata basis between the Exercising Optionholders) so that the Optionholder Number when aggregated with the Non- Optionholder Share Number equals the Share Maximum. In addition, if any amounts are required to be withheld and remitted to any Governmental Entity as a result of the exercise of a Target Option, then the payment of the exercise price by Exercising Optionholders and the issuance of Target Shares and payment of cash to the holder of such Target Option shall be apportioned between sections 8.2(c)(i) and 8.2(c)(ii) of the Target Stock Option Plan to provide for a sufficient cash entitlement of such holder pursuant to section 8.2(c)(ii) of the Target Stock Option to permit such withholding.

Target Options. (a) Target and Acquiror acknowledge that at At the Effective Time, each of Target's then outstanding options (the "Target Options") to purchase Target Common Stock (including all outstand- -------------- ing incentive stock options to purchase Target Options shall terminate pursuant Common Stock (the "Target ISOs") ----------- non-qualified stock options to section 10.2 of purchase Target Common Stock (the "Target NQSOs") ------------ granted under Target's 1997 Stock Option Plan, as amended (the "Target Option ------------- Plan") or granted pursuant to rollover option agreements in the form previously ---- provided to Parent (the "Rollover Options")), by virtue of the Merger and ---------------- without any further action on the part of any holder thereof, shall be assumed by Parent and shall be automatically converted into an option (the "Assumed ------- Option") to purchase a number of shares of Parent Common Stock that holders the holder ------ of such Target Options shall Option would have received had such holder exercised such Option immediately prior to the right Effective Time, at an exercise price per share of Parent Common Stock equal to (i) the exercise price in effect under such Target Option immediately prior to the Effective Time divided by (ii) the number of Merger Shares to exercise Target Options in whole or in part whether or not the applicable vesting requirements have been satisfied. Target shall take all necessary steps to ensure that the Target Stock Option Plan and all Target Options are terminated at the Effective Time. Target shall deliver written notice to all holders be issued for each share of Target Options prior Common Stock pursuant to Section 2.1(c). The Assumed Option shall contain the Effective Date advising same term, status as an "incentive stock option" under Section 422 of the Code (if such holders that: Target Option was theretofore a Target ISO), vesting schedule (1without acceleration thereof by virtue of the Merger and the transactions contemplated hereby except as otherwise set forth in any written agreement between Target and a holder of a Target Option) and otherwise be on substantially the holders of Target Options may exercise Target Options in order to participate same terms and conditions as set forth in the Arrangement as holders of assumed Target Shares, with such exercise being conditional on the closing of the Arrangement; (2) Target will make the election referred to in Section 5.3(b) below in respect of the payment of the exercise price by the holders of Target options and the issuance of Target Shares or payment of cash to such holders; and (3) all Target Options will be terminated pursuant to section 10.2 of the Target Stock Option Plan upon the closing of the ArrangementOption. (b) Target Parent shall elect pursuant take all corporate action necessary to section 8.2 of the Target Stock Option Plan that the payment of the exercise price by the holders of Target Options who exercise Target Options (the "Exercising Optionholders") and the reserve for issuance of Target Shares or payment of cash to the Exercising Optionholders shall be pursuant to section 8.2(c)(i) of the Target Stock Option Plan, provided that if the aggregate of (i) the a sufficient number of Acquiror Shares that would be issued to all Exercising Optionholders under the Arrangement in respect shares of the Target Shares issued Parent Common Stock for delivery upon exercise of their Target the Assumed Options (the "Optionholder Number") and (ii) the aggregate of the number of Acquiror Shares to be issued to Target Shareholders (excluding the Optionholder Number) pursuant to the Arrangement and the number of Acquiror Shares issuable to holders of Target Warrants and Target Exchangeable Shares following the Arrangement (the "Non-Optionholder Share Number"), exceeds the Share Maximum, then the payment of the exercise price by Exercising Optionholders and the issuance of Target Shares and payment of cash to the Exercising Optionholders shall be apportioned between sections 8.2(c)(i) and 8.2(c)(ii) of the Target Stock Option Plan to provide for a reduction in the Optionholder Number (on a pro rata basis between the Exercising Optionholders) so that the Optionholder Number when aggregated accordance with the Non- Optionholder Share Number equals the Share Maximum. In addition, if any amounts are required to be withheld and remitted to any Governmental Entity as a result of the exercise of a Target Option, then the payment of the exercise price by Exercising Optionholders and the issuance of Target Shares and payment of cash to the holder of such Target Option shall be apportioned between sections 8.2(c)(i) and 8.2(c)(ii) of the Target Stock Option Plan to provide for a sufficient cash entitlement of such holder pursuant to section 8.2(c)(ii) of the Target Stock Option to permit such withholdingthis Section 2.3.

Target Options. As soon as practicable following the date of this Agreement, the Board of Directors of Target (aor, if appropriate, any committee thereof administering the 2005 Equity Incentive Plan) shall adopt such resolutions or take such other actions as may be required to adjust the terms of all outstanding Target Options, whether vested or unvested, as necessary to provide that Target Options will become fully exercisable and Acquiror acknowledge that may be exercised before the Effective Time at such applicable time or times as specified in the 2005 Equity Incentive Plan, and at the Effective Time, all each Target Options shall terminate pursuant to section 10.2 of the Target Stock Option Plan, provided that holders of Target Options shall have the right outstanding immediately prior to the Effective Time to exercise Target Options in whole or in part Time, whether or not then vested or exercisable, shall be canceled and the applicable vesting requirements have been satisfied. Target holder thereof shall take all necessary steps then become entitled to ensure that receive, in full satisfaction of the Target Stock Option Plan and all Target Options are terminated at rights of such holder with respect thereto, an amount equal to: (a) an amount of cash equal to (i) the Effective Time. Target shall deliver written notice to all holders product of (A) the number of shares of Target Options Common Stock subject to such Target Option immediately prior to the Effective Date advising such holders that: Time, multiplied by (1B) the holders of Target Options may exercise Target Options in order to participate in amount by which the Arrangement as holders of Target Shares, with such exercise being conditional on the closing of the Arrangement; (2) Target will make the election referred to in Section 5.3(b) below in respect of the payment of Per Share Price exceeds the exercise price by the holders per share of Target options and the issuance of Target Shares or payment of cash Common Stock that is subject to such holdersTarget Option; and minus (3ii) all the Escrow Contribution Amount for such Target Options will Option; plus (iii) any cash disbursements required to be terminated pursuant made from the Escrow Fund with respect to section 10.2 such Target Option to the Former Optionholder thereof in accordance with the terms of the Target Stock Option Plan upon the closing of the Arrangement. Escrow Agreement, as and when such disbursements are required to be made; plus (b) Target shall elect pursuant to section 8.2 of if the Target Stock Option Plan that the payment of the exercise price by the holders of Target Options who exercise Target Options (the "Exercising Optionholders") and the issuance of Target Shares or payment Milestone Event occurs, an amount of cash equal to the Exercising Optionholders shall be pursuant to section 8.2(c)(i) of the Target Stock Option Plan, provided that if the aggregate product of (i) the number of Acquiror Shares that would be issued shares of Target Common Stock subject to all Exercising Optionholders under such Target Option immediately prior to the Arrangement in respect Effective Time, multiplied by (ii) an amount equal to (A) the Additional Merger Consideration divided by (B) the sum of (1) the aggregate number of shares of Target Shares issued upon exercise Capital Stock outstanding immediately prior to the Effective Time plus (2) the aggregate number of their shares of Target Capital Stock subject to unexercised Target Options (whether vested or unvested) that are outstanding immediately prior to the "Optionholder Number") and Effective Time. As soon as practicable following the Effective Time, Acquiror shall cause the payment described in subsections (ii) the aggregate a)(i), as reduced by subsection (a)(ii), of the number of Acquiror Shares preceding sentence to be issued to Target Shareholders (excluding the Optionholder Number) pursuant to the Arrangement and the number of Acquiror Shares issuable to holders of Target Warrants and Target Exchangeable Shares following the Arrangement (the "Non-Optionholder Share Number"), exceeds the Share Maximum, then the payment of the exercise price by Exercising Optionholders and the issuance of Target Shares and payment of cash to the Exercising Optionholders shall be apportioned between sections 8.2(c)(i) and 8.2(c)(ii) of the Target Stock Option Plan to provide for a reduction in the Optionholder Number (on a pro rata basis between the Exercising Optionholders) so that the Optionholder Number when aggregated with the Non- Optionholder Share Number equals the Share Maximum. In addition, if any amounts are required to be withheld and remitted to any Governmental Entity as a result of the exercise of a Target Option, then the payment of the exercise price by Exercising Optionholders and the issuance of Target Shares and payment of cash made to the holder of such Target Option by wire transfer of immediately available funds to the account designated by such holder in writing, and such holder shall be apportioned between sections 8.2(c)(iremain entitled to receive any additional cash disbursements as provided in subclause (a)(iii) and 8.2(c)(iisubclause (b) of (if applicable). If the Target Stock Option Plan Milestone Event occurs, Acquiror shall, as promptly as practicable thereafter, but in no event later than forty-five days after such occurrence, cause the payment described in Section 1.11(b) to provide for a sufficient cash entitlement be made to the holder of such Target Option by wire transfer of immediately available funds to the account designated by such holder pursuant to section 8.2(c)(ii) of the Target Stock Option to permit such withholdingin writing.