Treatment of Company Options Prior to the Effective Time, the Company Board (or, if appropriate, any committee thereof) will adopt resolutions and take all other actions necessary and appropriate to provide that: (i) immediately prior to the Effective Time, each unexpired and unexercised option to purchase Shares (the “Company Options”), under any employee, consultant or director stock option, stock purchase or equity compensation plan, arrangement or agreement of the Company, including the Company’s Amended and Restated 2005 Stock Incentive Plan and the Company’s 2014 Equity Incentive Award Plan, (the “Company Stock Option Plans”), whether or not then exercisable or vested, will vest (in the case of a Company Option that is subject to a performance-based vesting condition, vesting will be determined in accordance with the terms and conditions applicable to the award) and be cancelled and, in exchange therefor, each former holder of any such cancelled Company Option will only be entitled to receive, in consideration of the cancellation of such Company Option and in full settlement therefor, a payment in cash of an amount equal to the product of (A) the total number of Shares previously subject to such Company Option and (B) the excess, if any, of the Merger Consideration over the exercise price per Share previously subject to such Company Option (such amounts payable hereunder being referred to as the “Option Payments”); (ii) from and after the Effective Time, any such cancelled Company Option will no longer be exercisable by the former holder thereof, but will only entitle such holder to the payment of the Option Payment; and (iii) if the exercise price per Share of any such Company Option is equal to or greater than the Merger Consideration or, in the case of a Company Option that is subject to a performance-based vesting condition, to the extent the applicable performance-based vesting condition has not been satisfied as of immediately prior to the Effective Time and such portion of the Company Option is not required (pursuant to the terms and conditions applicable to the award) to become vested in connection with the transactions contemplated by this Agreement, such Company Option shall be cancelled immediately prior to the Effective Time without any payment being made in respect thereof.
Company Restricted Stock Immediately prior to the Effective Time, any then-outstanding shares of Company Restricted Stock shall become fully vested and the Company shall be entitled to deduct and withhold such number of shares of Company Common Stock otherwise deliverable upon such acceleration to satisfy any applicable income and employment withholding Taxes (assuming a fair market value of a share of Company Common Stock equal to the closing price of the Company Common Stock on the last completed trading day immediately prior to the Closing). All shares of Company Common Stock then-outstanding as a result of the full vesting of the shares of Company Restricted Stock and the satisfaction of any applicable income and employment withholding Taxes shall have the right to receive the Merger Consideration in accordance with the terms and conditions of this Agreement.
Company Restricted Stock Units At the Effective Time of the First Merger, each Company Restricted Stock Unit then outstanding shall be assumed by Parent (each, an “Assumed RSU”). Subject to, and in accordance with, the terms of the applicable Company Stock Plan and any applicable award or other agreement, each Assumed RSU shall be converted into the right to receive the number of shares of Parent Common Stock (or an amount in respect thereof for cash settled Company Restricted Stock Unit) equal to the number of shares of Company Common Stock subject to the Company Restricted Stock Unit multiplied by the Stock Award Exchange Ratio (rounded down to the nearest whole number of shares of Parent Common Stock). Each Company Restricted Stock Unit shall have the same terms and conditions as were in effect immediately prior to the Effective Time of the First Merger other than with respect to those Company Restricted Stock Units listed (i) in Section 5.9(c)(i) of the Company Disclosure Schedule that were subject to performance based vesting conditions prior to the date of this Agreement and that shall be deemed issued and vested in their entirety at the Effective Time of the First Merger and released from any forfeiture rights pertaining to such shares in favor of Company, Parent or Surviving Entity, and (ii) in Section 5.9(c)(ii) of the Company Disclosure Schedule, which shall be deemed issued in their entirety at the Effective Time of the First Merger, which shall be converted into the right to receive Parent Common Stock according to the same formula applied to the Assumed RSUs above, and which shall be subject to quarterly vesting over a two-year period following the Effective Date in accordance with the terms of the 2006 Plan. Except as set forth in this Section 5.9(c). Company shall not take or permit any action that would accelerate vesting of any Company Restricted Stock Unit, except to the extent required by the terms of any such Company Restricted Stock Unit as in effect on the date hereof. Copies of the relevant agreements governing such Company Restricted Stock Unit and the vesting thereof have been provided to Parent. Except as set forth in this Section 5.9(c), all outstanding rights that Company may hold immediately prior to the Effective Time of the First Merger to the forfeiture of shares of Company Common Stock subject to the Company Restricted Stock Unit shall be assigned to Parent in the First Merger and shall thereafter be held by Parent upon the same terms and conditions in effect immediately prior to the Effective Time of the First Merger, except that the shares forfeitable pursuant to such rights shall be appropriately adjusted to reflect the Stock Award Exchange Ratio.
Treatment of Company Stock Options Immediately after the Effective Time, each outstanding option to purchase shares of Company Common Stock (a “Company Stock Option”) granted under the Company 2015 Omnibus Incentive Plan and the 2007 Stock Incentive Plan for Key Employees of the Company and its affiliates (collectively, the “Company Stock Plans”), whether vested or unvested, shall, automatically and without any required action on the part of the holder thereof, cease to represent an option to purchase shares of Company Common Stock and shall be converted into an option to purchase a number of shares of Parent Common Stock (such option, a “Converted Stock Option”) equal to the product (with the result rounded down to the nearest whole number) of (i) the number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time and (ii) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of Company Common Stock of such Company Stock Option immediately prior to the Effective Time divided by (B) the Exchange Ratio; provided, however, that the exercise price and the number of shares of Parent Common Stock purchasable pursuant to the Converted Stock Option shall be determined in a manner consistent with the requirements of Section 409A of the Code. Except as specifically provided above, following the Effective Time, each Converted Stock Option shall continue to be governed by the same terms and conditions (including vesting (and acceleration thereof upon the Closing, to the extent provided therein), forfeiture and exercisability terms) as were applicable to the corresponding Company Stock Option at the Effective Time; provided, however, that (1) to the extent that any Company Stock Option that is subject to vesting solely upon achievement of a target price per share of Company Common Stock (such price, the “Target Price” and such Company Stock Option, a “Target Price Option”)) would, by its terms, expire as of the Effective Time, such Target Price Option shall be amended such that it will not expire upon the Effective Time and shall instead become a Converted Stock Option, and remain eligible to vest upon satisfaction of the applicable Target Price, as adjusted to equal the initial Target Price divided by the Exchange Ratio (the “Adjusted Target Price”), (2) all Converted Stock Options held by a Company Employee (other than any Converted Stock Option with an Adjusted Target Price) shall vest in their entirety to the extent such Company Employee undergoes a Covered Termination and (3) all Converted Stock Options with an Adjusted Target Price held by a Company Employee shall be cancelled for no consideration or payment to the extent such Company Employee undergoes any termination of employment (including a Covered Termination) and at the time of such termination, the Adjusted Target Price is not achieved. For purposes hereof, a “Covered Termination” means, with respect to a Company Employee, (A) an involuntary termination of such Company Employee’s employment initiated by the Company that would result in the payment of severance benefits under the applicable Company Benefit Plan under which such Company Employee is eligible for severance benefits or (B) such Company Employee resigns from employment as a result of a material diminution in (I) the duties or responsibilities of such Company Employee as of the date of this Agreement, or (II) the base salary or annual incentive compensation opportunity afforded to such Company Employee as of the date of this Agreement, in each case, to the extent that such termination or resignation occurs on or following the date of this Agreement and on or prior to the second (2nd) anniversary of the Closing Date; provided that, in the case of a Company Employee resigning under clause (B) above, (x) the Company Employee shall provide the Surviving Corporation with written notice specifying the circumstances alleged to constitute the applicable material diminution within sixty (60) days following the first (1st) occurrence of such circumstances, (y) the Surviving Corporation shall have thirty (30) days following receipt of such notice to cure such circumstances and (z) if the Surviving Corporation has not cured such circumstances within such thirty (30)-day period, the Company Employee shall terminate his or her employment not later than thirty (30) days after the end of such thirty (30) day period; provided further that any such resignation under clause (B) above shall constitute a Covered Termination with respect to a Company Employee who is not a Covered Company Employee solely if so determined by the Company CEO (subject to his continued employment with the Company, or, following the Closing, with Parent, through such date).
Treatment of Company Equity Awards (a) Subject to Section 3.05(f), at the Effective Time, each Company Option that is outstanding and unexercised as of immediately prior to the Effective Time, whether vested or unvested, shall, without any further action on the part of any holder of a Company Option, be assumed by Acquiror. Each such Company Option so assumed by Acquiror hereunder (an “Adjusted Option”) shall continue to have, and be subject to, the same terms and conditions (including the term, exercisability and vesting schedule as were applicable to the corresponding Company Option immediately before the Effective Time, except that (i) Acquiror’s board of directors or a committee thereof shall succeed as to the authority and responsibility of the Company Board or any committee thereof with respect to any Adjusted Option; (ii) each Adjusted Option will be exercisable for that number of shares of Class A common stock of the Acquiror (“Acquiror Common Stock”) (rounded down to the nearest whole share) equal to the product of the number of shares of Common Stock to which the corresponding Company Option related immediately prior to the Effective Time and the Equity Award Exchange Ratio, and (iii) the per share exercise price for the shares of Acquiror Common Stock issuable upon exercise of such Adjusted Option will be equal to the quotient of the per share exercise price of the Company Option divided by the Equity Award Exchange Ratio (rounded up to the nearest whole cent). The date of grant of each Adjusted Option will be the date on which the corresponding Company Option was granted. Notwithstanding the foregoing, the adjustment described in this Section 3.05(a) shall be made on a grant-by-grant basis in a manner consistent with Section 409A of the Code and, with respect to each Company Option that is an incentive stock option (within the meaning of Section 422(b) of the Code), no adjustment will be made that would be a modification (within the meaning of Section 424(h) of the Code) to such Company Option.
Treatment of Company Warrants Each outstanding warrant to purchase Company Common Shares (the “Company Warrants”), whether or not exercisable at the Effective Time, shall, at the option of the holder thereof: (i) be surrendered to Parent in exchange for an amount equal to (A)the per share Consideration multiplied by (B) the number of Company Common Shares the holder of such Company Warrant would have received had such holder exercised such Company Warrant immediately prior to the Closing (assuming for the purposes of this calculation, the cashless exercise of such Company Warrant); or (ii) remain outstanding following the Effective Time in accordance with the terms thereof (each such Company Warrant that remains outstanding following the Effective Time, a “Company Converted Warrant”). For the avoidance of doubt, following the Effective Time, Company Converted Warrants will, in accordance with the provisions of Section 7 thereof, represent a right to purchase, for a price equal to the Exercise Price (as defined in such Company Converted Warrant) multiplied by the number of Company Common Shares for which such Company Converted Warrant may have been exercised immediately prior to the Closing, (I) an amount of cash equal to the Cash Consideration multiplied by the number of Company Common Shares for which such Company Converted Warrant may have been exercised immediately prior to the Closing and (II) that number of Parent Common Shares equal to the number of Company Common Shares for which such Company Converted Warrant may have been exercised immediately prior to the Closing multiplied by the Exchange Ratio, together with any cash paid in lieu of a fractional share in accordance with the terms of the Company Converted Warrants; provided, that, the number of Parent Common Shares deliverable upon the exercise of the Company Converted Warrants following the Closing shall be subject to adjustment for events subsequent to the Closing on terms economically equivalent to those provided in the Company Converted Warrants. Also for the avoidance of doubt, upon exercise, to the extent applicable, the holder of any Company Converted Warrant shall be entitled to receive any evidences of indebtedness, assets (including cash) or other property such holder would have been entitled to receive in lieu of an adjustment to the Exercise Price (as defined in the Company Warrants) in accordance with the terms of such Company Converted Warrant.
Company Restricted Shares At the Effective Time, each share of Company Stock subject to vesting, repurchase or other restrictions pursuant to the Company Stock Plan (a “Company Restricted Share”) that is outstanding immediately prior to the Effective Time shall vest in full and become free of restrictions and any repurchase rights shall lapse, and the holder thereof shall be entitled to receive only the Merger Consideration with respect to each such Company Restricted Share in accordance with Section 2.05(b).
Treatment of Equity Awards Upon a Change of Control, all equity awards with time-based vesting shall immediately fully vest and become non-forfeitable and each equity award which has been granted (or any other equity award which would otherwise have been granted to the Executive during the applicable performance period/calendar year in the ordinary course) with performance vesting shall vest at an amount based upon and to the extent of the Employers’ achievement of performance goals during the performance period under each such equity award through the end of the calendar month immediately preceding the Change in Control.
Stock Options and Restricted Stock Units The Executive acknowledges that as of the Resignation Date, the Executive was vested in Stock Options and Restricted Stock Units (“RSUs”) as reflected in the report attached as Exhibit A hereto. Except as specifically set forth herein, the Executive’s rights with respect to Stock Options and RSUs issued to him/her are governed by the Stock Option and Restricted Stock Unit Agreements entered into between the Executive and the Company, and the applicable Company equity incentive plan(s) and Notice(s) of Grant.
Stock Options and Restricted Stock In the event that (a) USPI elects to terminate this Agreement pursuant to Section 5, (b) there is a “Change of Control Event” (as defined below) or (c) USPI terminates Employee without the notice required under Section 5 or without Cause under Section 7, then in each such event, all USPI stock options held by Employee and all restricted stock awards made to him/her by USPI (including issued subject to forfeiture) shall thereupon automatically be amended so as to (i) cause to vest, immediately prior to the date of such Change in Control Event or such termination of employment, all then unvested stock options and restricted stock awards, and (ii) provide Employee 90 days to exercise such options (or such greater period as may be provided by the terms of such options). For purposes of the foregoing, the term “Change of Control Event” shall mean (A) a consolidation or merger of USPI with or into any other corporation (other than a merger which will result in the voting capital stock of USPI outstanding immediately before the effective date of such consolidation or merger being converted into more than 50% of the voting capital stock of the surviving entity outstanding immediately after such consolidation or merger), (B) a sale of all or substantially all of the properties and assets of the Company as an entirety in a single transaction or in a series or related transactions to any other “person” or (C) the acquisition of “beneficial ownership” by any “person” or “group” of voting stock of the Company representing more than 50% of the voting power of all outstanding shares of such voting stock, whether by way of merger of consolidation or otherwise. As used herein, (x) the terms “person” and “group” shall have the meanings set forth in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not applicable, (y) the term “beneficial owner” shall have the meaning set forth in Rules 13d-3 and 13d-5 under the Exchange Act, whether or not applicable, except that a person shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time or upon the occurrence of certain events, and (z) any “person” or “group” will be deemed to beneficially own any voting stock so long as such person or group beneficially owns, directly or indirectly, in the aggregate a majority of the voting stock of a registered holder of such voting stock.
