Common use of Treatment of Stock Options Clause in Contracts

Treatment of Stock Options. (a) Effective as of the Effective Time, each option granted by the Company to purchase shares of Company Common Stock that is outstanding and unexercised immediately prior thereto (the "Company Stock Options"), shall cease to represent a right to acquire shares of Company Common Stock and shall be converted automatically into an option to purchase shares of Parent Common Stock in an amount and at an exercise price determined as provided below (and otherwise subject to the terms of the Company 1992 Long-Term Incentive Compensation Plan, as amended and the Company 1992 Non-Employee Directors' Stock Option Plan, as amended (together the "Option Plans"), and the agreements evidencing grants thereunder). The number of shares of Parent Common Stock subject to, and the option price and terms and conditions of, the new option shall be determined in a manner that preserves both (i) the aggregate gain (or loss) on the Company Stock Option immediately prior to the Effective Time and (ii) the ratio of the exercise price per share subject to the Company Stock Option to the fair market value (determined immediately prior to the Effective Time) per share sub- ject to such option, provided that any fractional shares of Parent Common Stock resulting from such determination shall be rounded down to the nearest share. Effective as of the Effective Time, the Surviving Corporation shall assume each Company Stock Option agreement, each as amended, as provided herein. The adjustment provided herein with respect to any Company Stock Options that are "incentive stock options" (as defined in section 422 of the Code) shall be and is intended to be effected in a manner that is consistent with section 424(a) of the Code. The duration, vesting and other terms of the new options shall be the same as the Company Stock Options that they replace, except that all references to the Company shall be deemed to be references to Parent. In the event that a holder of a Company Stock Option is terminated without Cause (as defined in Section 5.5(a) of this Agreement) within 12 months of the Effective Time, then such holder's new option shall become 100% exercisable as of such date of termination.

Treatment of Stock Options. (a) Effective as The merger agreement provides that, at the effective time of the Effective Timemerger, each stock option granted by the Company to purchase shares of Company Common Stock that Convergent which is then outstanding and unexercised immediately prior thereto (the "Company Stock Options"), shall cease to represent a right to acquire shares of Company Common Stock and shall will be converted automatically into an option options to purchase shares common stock of our Parent. Each option assumed by our Parent Common Stock under the merger agreement will continue to have, and be subject to, the same terms and conditions set forth in an amount and at an exercise price determined as provided below (and otherwise subject to the terms of the Company 1992 Long-Term Incentive Compensation Plan, as amended Convergent's stock option plan and the Company 1992 Non-Employee Directors' Stock Option Planapplicable stock option agreement then in effect, as amended except that (together 1) the "Option Plans"), and the agreements evidencing grants thereunder). The option will be exercisable for that number of shares of Parent Common Stock our Parent's common stock equal to the number of shares of Convergent's common stock subject to, and the to such option price and terms and conditions of, the new option shall be determined in a manner that preserves both (i) the aggregate gain (or loss) on the Company Stock Option immediately prior to the Effective Time effective time of the merger, and (ii2) the ratio of the exercise price per share subject to will remain as the Company Stock Option to the fair market value (determined exercise price per share in effect for that option immediately prior to the Effective Time) per share sub- ject effective time of the merger. Consistent with the terms of Convergent's stock option plan and the documents governing the outstanding options under the plan, the merger will not terminate any of the outstanding options under Convergent's stock option plan. Within 20 business days after the effective time of the merger, our Parent will issue to such optioneach person who, provided that any fractional shares of Parent Common Stock resulting from such determination shall be rounded down immediately prior to the nearest share. Effective as effective time of the Effective Timemerger, the Surviving Corporation shall assume each Company Stock Option agreement, each as amended, as provided herein. The adjustment provided herein with respect to any Company Stock Options that are "incentive stock options" (as defined in section 422 of the Code) shall be and is intended to be effected in a manner that is consistent with section 424(a) of the Code. The duration, vesting and other terms of the new options shall be the same as the Company Stock Options that they replace, except that all references to the Company shall be deemed to be references to Parent. In the event that was a holder of an outstanding option under the Convergent's stock option plan, a Company Stock Option is terminated without Cause (as defined document in Section 5.5(a) form and substance satisfactory to Convergent evidencing the assumption of this Agreement) within 12 months options by our Parent. All outstanding rights of Convergent which it held immediately prior to the effective time of the Effective Timemerger will, then such holder's new option shall become 100% at the effective time of the merger, be assigned to our Parent in the merger and will be exercisable as by our Parent upon the same terms and conditions in effect immediately prior to the effective time of such date of terminationthe merger.

Treatment of Stock Options. (a) Effective as of Subject to Section 2.3, at the Effective Time, except for those options listed in Schedule 2.1(e) which are owned by the executive officers of the Company which have not been exercised at or prior to the Effective Time (the “Executive Options”), each option granted by the Company to purchase shares of Company Common Stock that is outstanding and unexercised immediately prior thereto (the "each, a “Company Stock Options"), shall cease to represent a right to acquire shares of Company Common Stock and shall be converted automatically into an option to purchase shares of Parent Common Stock in an amount and at an exercise price determined as provided below (and otherwise subject to the terms of the Company 1992 Long-Term Incentive Compensation Plan, as amended and the Company 1992 Non-Employee Directors' Stock Option Plan, as amended (together the "Option Plans"), and the agreements evidencing grants thereunder). The number of shares of Parent Common Stock subject to, and the option price and terms and conditions of, the new option shall be determined in a manner that preserves both (iOption”) the aggregate gain (or loss) on the Company Stock Option immediately prior to the Effective Time and (ii) the ratio of the exercise price per share subject to the Company Stock Option to the fair market value (determined outstanding immediately prior to the Effective Time, and not exercised, which is vested or which by its terms will become vested at the Effective Time, shall be canceled and extinguished and converted into and become a right following the Effective Time to receive from the Company an amount of cash, without interest thereon and less any required withholding taxes, equal to the excess, if any, of (i) the Merger Consideration over (ii) the exercise price per share sub- ject to of such optionCompany Stock Option (such amount payable in respect of any share of Company Common Stock into which a Company Stock Option is exercisable, provided that any fractional the “Option Consideration”), multiplied by the number of shares of Parent Company Common Stock resulting from for which such determination shall Company Stock Option is exercisable immediately prior to or at the Effective Time, and all other unvested Company Options (“Unvested Company Options”) will be rounded down cancelled without consideration. No cash payment will be due to a holder of such Company Stock Option in respect of such Company Stock Option or its termination if the nearest shareamount set forth in clause (ii) exceeds the amount set forth in clause (i). Effective as of Prior to the Effective Time, the Company shall take all actions (including, without limitation, obtaining all necessary consents from the holders of Company Stock Options) necessary to give effect to the transactions contemplated by this Section 2.1(e), and payments to particular holders pursuant to this Section 2.1(e) shall be conditioned upon their execution of such consents. The Option Consideration shall be payable on the first Business Day following the Effective Time. All Executive Options listed in Schedule 2.1(e) and not exercised as of the Effective Time shall remain outstanding after the Effective Time and should be continued as options to purchase a number (or fraction) of shares of common stock of the Surviving Corporation that corresponds to the percentage of the fully diluted equity of the Company represented by the shares underlying such options (and the exercise price thereof shall assume each be adjusted accordingly) or converted into options to purchase a number (or fraction) of shares of common stock of Parent that corresponds to the percentage of the fully diluted equity of the Company Stock Option agreement, each as amended, as provided herein. The adjustment provided herein represented by the shares underlying such options (and the exercise price thereof shall be adjusted accordingly) in a manner consistent with respect to any Company Stock Options that are "incentive stock options" (as defined in section 422 Section 409A of the Code) , as determined in the sole discretion of Parent, and otherwise shall be and is intended to be effected in a manner that is consistent with section 424(a) of the Code. The duration, vesting and other terms of the new options shall be the same as the Company Stock Options that they replace, except that all references to the Company shall be deemed to be references to Parent. In the event that a holder of a Company Stock Option is terminated without Cause (as defined in Section 5.5(a) of this Agreement) within 12 months of the Effective Time, then such holder's new option shall become 100% exercisable as of such date of terminationgoverned by their existing terms.

Treatment of Stock Options. Each option to purchase shares of Garfield Common Stock granted pursuant to the Garfield Stock Incentive Plans (aas defined below) (each, a “Stock Option”) outstanding at the end of the day immediately before the Closing Date, whether or not vested or exercisable, shall, on the Closing Date prior to the Effective Time, be cancelled and the holder of such Stock Option shall be entitled to receive, in lieu of such cancelled Stock Option, an amount in cash, less any applicable Tax withholding, equal to the product of (i) the number of shares of Garfield Common Stock issuable upon the exercise of such Stock Option (the “Option Shares”) multiplied by (ii) the amount, if any, by which the Merger Consideration exceeds the per share exercise price of such Stock Option. Garfield will ensure that (i) the Garfield Stock Incentive Plans shall terminate as of the Effective Time and all awards issued under such plans shall be terminated and the provisions in any other plan, program, arrangement or agreement providing for the issuance or grant of any other interest in respect of the equity interests of Garfield or any of its subsidiaries shall be of no further force or effect and shall be deemed to be terminated as of the Effective Time, each option granted by (ii) no holder of a Stock Option or any participant in any Garfield Stock Incentive Plan shall have any right thereunder to acquire any securities of Garfield, the Company Surviving Corporation or any subsidiary thereof or to purchase shares receive any payment or benefit with respect to any award under a Garfield Stock Incentive Plan (except as provided above in this paragraph) and (iii) no holder of Company Common a Stock Option shall be permitted to exercise such Stock Option after the day that is outstanding and unexercised immediately prior thereto (the "Company Stock Options"), shall cease to represent a right to acquire shares of Company Common Stock and shall be converted automatically into an option to purchase shares of Parent Common Stock in an amount and at an exercise price determined as provided below (and otherwise subject to the terms of the Company 1992 Long-Term Incentive Compensation Plan, as amended and the Company 1992 Non-Employee Directors' Stock Option Plan, as amended (together the "Option Plans"), and the agreements evidencing grants thereunder). The number of shares of Parent Common Stock subject to, and the option price and terms and conditions of, the new option shall be determined in a manner that preserves both (i) the aggregate gain (or loss) on the Company Stock Option immediately two business days prior to the Effective Time and (ii) the ratio of the exercise price per share subject scheduled Closing Date. Garfield shall make such payments to the Company holders of such cancelled Stock Option to Options on the fair market value (determined Closing Date, immediately prior to the Effective Time) per share sub- ject . For purposes of this Agreement, “Garfield Stock Incentive Plans” shall mean the 1991 Incentive Stock Option Plan, the 1994 Nonqualified Performance Option Plan, the 1996 Stock Option Plan, the 1999 Stock Option Plan and the 2004 Stock Incentive Plan. Garfield shall take all actions necessary to such option, provided that any fractional shares of Parent Common Stock resulting from such determination shall be rounded down effectuate the foregoing prior to the nearest share. Effective as of the Effective Time, the Surviving Corporation shall assume each Company Stock Option agreement, each as amended, as provided herein. The adjustment provided herein with respect to any Company Stock Options that are "incentive stock options" (as defined in section 422 of the Code) shall be and is intended to be effected in a manner that is consistent with section 424(a) of the Code. The duration, vesting and other terms of the new options shall be the same as the Company Stock Options that they replace, except that all references to the Company shall be deemed to be references to Parent. In the event that a holder of a Company Stock Option is terminated without Cause (as defined in Section 5.5(a) of this Agreement) within 12 months of the Effective Time, then such holder's new option shall become 100% exercisable as of such date of termination.

Treatment of Stock Options. (a) Effective as of the Effective Time, each option granted by the Company to purchase shares of Company Common Stock that is outstanding and unexercised immediately prior thereto (the "Company Stock Options"), whether vested or unvested as of the Effective Time, shall cease to represent a right to acquire shares of Company Common Stock and shall be converted automatically into an a fully vested and exercisable option to purchase shares of Parent Common Stock in an amount and amount, at an exercise price and for an exercise period determined as provided below (and otherwise subject to the terms of the Company 1992 Long-Term Incentive Compensation Plan, as amended and the Company 1992 Non-Employee Directors' Stock Option Plan, as amended plans (together the "Option Plans"), and the agreements evidencing grants thereunder). The number of shares of Parent Common Stock subject to, and the option price and terms and conditions of, the new option shall be determined in a manner that preserves both (i) the aggregate gain (or loss) on the Company Stock Option immediately prior to the Effective Time and (ii) the ratio of the exercise price per share subject to the Company Stock Option to the fair market value (determined immediately prior to the Effective Time) per share sub- ject subject to such option, provided that any fractional shares of Parent Common Stock resulting from such determination shall be rounded down to the nearest share. Effective as of the Effective Time, the Surviving Corporation shall assume each Company Stock Option agreement, each as amended, as provided herein. The adjustment provided herein with respect to any Company Stock Options that are "incentive stock options" (as defined in section 422 of the Code) shall be and is intended to be effected in a manner that is consistent with section 424(a) of the Code. The duration, vesting duration and other terms of the new options shall be the same as the Company Stock Options that they replace, except that all references to the Company shall be deemed to be references to Parent. In ; provided, however, that all such new options shall not expire until at least sixty (60) days after the event that a holder end of a Company Stock Option is terminated without Cause the first fiscal quarter of Parent ending at least thirty (as defined in Section 5.5(a30) of this Agreement) within 12 months of days after the Effective Time, then such holder's . New option award agreements will be provided to each holder of new option shall become 100% exercisable as of such date of terminationoptions within 30 days after the Effective Time.

Treatment of Stock Options. The Merger Agreement provides that Parent will not assume any option to purchase Shares granted under a Company stock plan, or any option that the Company converted pursuant to a prior acquisition or merger (aeach an "Option"), that falls into one or more of the following categories: • is held by a person who is not an employee or service provider of Parent, the Surviving Corporation or any other subsidiary of Parent immediately after the Effective Time, • is outstanding and vested and exercisable (after taking into account the effect of any accelerated vesting under the Merger Agreement or any other applicable contract or arrangement) immediately prior to the Effective Time, • has an exercise price immediately prior to the Effective Time that is equal to or greater than the Merger Consideration, • is subject to the laws of a non-U.S. jurisdiction and/or held by an employee located in a non-U.S. jurisdiction and which Parent reasonably determines may not be assumed by Parent and converted into an Assumed Option (as defined below) under applicable legal requirements of the relevant non-U.S. jurisdiction or under the generally applicable policies and practices of Parent with respect to the grant of equity awards in such jurisdiction, or • is held by a non-employee member of the Company's board of directors. However, any Option described in the fourth and fifth bullets above will be accelerated in full so that each such Option is fully vested and exercisable immediately prior to the Effective Time. At the Effective Time, each option granted Option described above will be cancelled and, if such Option is vested and exercisable at the Effective Time, converted into the right to receive from the Surviving Corporation an amount in cash equal to the number of Shares underlying such Option multiplied by the Company difference between the Merger Consideration and the exercise price per share of such Option. Parent is obligated to purchase shares of Company Common Stock pay these amounts within 15 business days after the Effective Time. The Merger Agreement provides that at the Effective Time, each Option that is outstanding and unexercised immediately prior thereto not cancelled as described above (the an "Company Stock OptionsAssumed Option"), shall cease to represent a right to acquire shares of Company Common Stock and shall ) will be converted automatically into an option to purchase shares of Parent Common Stock in an amount common stock of Parent. Each Assumed Option will continue to have the same material terms and at an exercise price determined conditions as provided below (and otherwise subject were applicable prior to the terms of Effective Time, except that it will become exercisable for the Company 1992 Long-Term Incentive Compensation Plan, as amended and the Company 1992 Non-Employee Directors' Stock Option Plan, as amended (together the "Option Plans"), and the agreements evidencing grants thereunder). The number of shares of Parent Common Stock subject to, and common stock determined by multiplying the option price and terms and conditions of, number of Shares issuable upon the new option shall be determined in a manner that preserves both (i) exercise of the aggregate gain (or loss) on the Company Stock Assumed Option immediately prior to the Effective Time by a fraction, the numerator of which is the Offer Price and (ii) the ratio denominator of which is the exercise average closing sale price per of a share subject to of Parent common stock on the Company New York Stock Option to Exchange for the fair market value (determined immediately five consecutive trading days ending on the date that is two trading days prior to the Effective Time) per share sub- ject to such option, provided that any fractional shares of Parent Common Stock resulting from such determination shall be rounded down to the nearest sharewhole number of shares of Parent common stock. Effective as of the Effective Time, the Surviving Corporation shall assume each Company Stock Option agreement, each as amended, as provided herein. The adjustment provided herein with respect We refer to any Company Stock Options that are "incentive stock options" (as defined in section 422 of the Code) shall be and is intended to be effected in a manner that is consistent with section 424(a) of the Code. The duration, vesting and other terms of the new options shall be the same such fraction as the Company Stock Options that they replace"Exchange Ratio." The exercise price per Share for each Assumed Option will be determined by dividing the exercise price per Share of each Assumed Option by the Exchange Ratio, except that all references rounded up to the Company shall be deemed to be references to Parent. In the event that a holder of a Company Stock Option is terminated without Cause (as defined in Section 5.5(a) of this Agreement) within 12 months of the Effective Time, then such holder's new option shall become 100% exercisable as of such date of terminationnearest cent.

Treatment of Stock Options. (a) Effective as of Each option to purchase Shares (individually a “Stock Option” and collectively, the “Stock Options”) outstanding immediately prior to the Effective Time, each option granted by the Time pursuant to any Company to purchase shares of Company Common Stock that is outstanding and unexercised immediately prior thereto (the "Company Stock Options"), shall cease to represent a right to acquire shares of Company Common Stock and Benefit Plan or otherwise shall be converted automatically into substituted for an option to purchase shares of Parent Common Stock in an amount and at an exercise price determined as provided below (and otherwise subject to the terms common stock of the Company 1992 Long-Term Incentive Compensation PlanSurviving Corporation or, as amended and at the Company 1992 Non-Employee Directors' Stock Option Planelection of Parent, as amended (together the "Option Plans"), and the agreements evidencing grants thereunder). The number of shares of Parent Common Stock subject to, and the option price and terms and conditions of, the new option shall be determined in a manner that preserves both (i) the aggregate gain (any direct or loss) on the Company Stock Option immediately prior to the Effective Time and (ii) the ratio indirect parent of the exercise price per share subject to the Company Stock Option to the fair market value Surviving Corporation (determined immediately a “Rollover Option”); provided, however, that prior to the Effective Time, the Company shall provide each holder of a Stock Option that is “in-the-money” a Stock Option cancellation agreement, in a form acceptable to Parent, and if such holder executes and delivers to the Company such Stock Option cancellation agreement, in lieu of the conversion described above, each Stock Option will be canceled at the Effective Time and each holder of a Stock Option will, in full settlement of such Stock Option and in exchange for the surrender to the Company of any certificate or other document evidencing such Stock Option, receive from the Company an amount (subject to any applicable withholding) in cash equal to the product of (x) the excess, if any, of the Merger Consideration over the exercise price per share sub- ject Share of such Stock Option multiplied by (y) the number of Shares subject to such option, provided that any fractional shares Stock Option (with the aggregate amount of Parent Common Stock resulting from such determination shall be payment rounded down up to the nearest sharewhole cent). Effective If the applicable exercise price of any Stock Option equals or exceeds the Merger Consideration, such Stock Option shall be cancelled without payment of additional consideration, and all rights with respect to such Stock Option shall terminate as of the Effective Time. Each Rollover Option shall be adjusted equitably to prevent any increase or decrease in the intrinsic value of its corresponding Stock Option as a result of the transactions contemplated hereby. At the election of Parent, the substitution of Rollover Options contemplated hereby may be satisfied either by assumption and continuation of the relevant Stock Options and the Company Benefit Plans under which such Stock Options have been granted or by granting new Rollover Options under a stock incentive plan established by the Surviving Corporation shall assume each Company Stock Option agreementor, each as amendedat the election of Parent, as provided herein. The adjustment provided herein with respect to any Company Stock Options that are "incentive stock options" (as defined in section 422 direct or indirect parent of the Code) shall be and is intended to be effected in a manner that is consistent with section 424(a) of the Code. The duration, vesting and other terms of the new options shall be the same as the Company Stock Options that they replace, except that all references to the Company shall be deemed to be references to Parent. In the event that a holder of a Company Stock Option is terminated without Cause (as defined in Section 5.5(a) of this Agreement) within 12 months of the Effective Time, then such holder's new option shall become 100% exercisable as of such date of terminationSurviving Corporation.

Treatment of Stock Options. (a) Effective Prior to the Purchase Time, the Company Board and the Company shall take all actions (including obtaining any necessary determinations and/or resolutions of the Company Board or a committee thereof) that may be necessary (under the Company Equity Plans and award agreements pursuant to which options outstanding immediately prior to the Purchase Time that represent the right to acquire Shares) to (i) convert each unexpired and unexercised Option that is unvested as of the Purchase Time (each an “Unvested Option”) (other than Unvested Options held by Non-Employee Optionees) to a substitute award to acquire cash consideration in an amount equal to (A) the total number of Shares subject to such Unvested Option multiplied by (B) the difference, if positive, obtained by subtracting (x) the exercise price payable per Share under such Unvested Option from (y) the Merger Consideration (each, a “Substitute Award”); which amount, shall be paid in accordance with Section 2.10(c) and (ii) accelerate the vesting of each Substitute Award then outstanding and then held by an Employee whose service relationship with the Company had not terminated prior to the Purchase Time so that each such Substitute Award shall become fully vested on the third (3rd) Business Day after the Effective Time, provided that such Employee has not voluntarily terminated service prior to such day. For the avoidance of doubt, each option granted Substitute Award held by an Employee shall become immediately vested in full prior to such third (3rd) Business Day in the event that such Employee’s service relationship with the Company to purchase shares of Company Common Stock that is outstanding and unexercised immediately prior thereto (the "Company Stock Options"), shall cease to represent a right to acquire shares of Company Common Stock and shall be converted automatically into an option to purchase shares of Parent Common Stock in an amount and at an exercise price determined as provided below (and otherwise subject to the terms of the Company 1992 Long-Term Incentive Compensation Plan, as amended and the Company 1992 Non-Employee Directors' Stock Option Plan, as amended (together the "Option Plans"), and the agreements evidencing grants thereunder). The number of shares of Parent Common Stock subject to, and the option price and terms and conditions of, the new option shall be determined in a manner that preserves both (i) the aggregate gain (terminates on or loss) on the Company Stock Option immediately prior to after the Effective Time and before such third (ii3rd) Business Day for any reason other than the ratio voluntary termination of the service by such Employee. No holder of an Option that has an exercise price per share subject Share that is equal to or greater than the Company Stock Option to the fair market value (determined immediately prior to the Effective Time) per share sub- ject to such option, provided that any fractional shares of Parent Common Stock resulting from such determination Merger Consideration shall be rounded down entitled to the nearest share. Effective as of the Effective Time, the Surviving Corporation shall assume each Company Stock Option agreement, each as amended, as provided herein. The adjustment provided herein any payment with respect to any Company Stock Options that are "incentive stock options" (as defined in section 422 of such cancelled Option before or after the Code) shall be and is intended to be effected in a manner that is consistent with section 424(a) of the Code. The duration, vesting and other terms of the new options shall be the same as the Company Stock Options that they replace, except that all references to the Company shall be deemed to be references to Parent. In the event that a holder of a Company Stock Option is terminated without Cause (as defined in Section 5.5(a) of this Agreement) within 12 months of the Effective Purchase Time, then such holder's new option shall become 100% exercisable as of such date of termination.