Common use of Cancellation of Stock Options Clause in Contracts

Cancellation of Stock Options. Prior to the Effective Time of Merger I, the Company shall take all actions necessary and appropriate to provide that, immediately prior to the Effective Time of Merger I, each unexpired and unexercised option or similar right to purchase Company Common Stock (each, a “Company Option”), under any stock option plan of the Company or any other plan, agreement or arrangement (the “Company Stock Option Plans”), whether or not then exercisable or vested, shall be cancelled and, in exchange therefor, each former holder of any such cancelled Company Option shall be entitled to receive (as promptly as practicable after the Effective Time of Merger I), in consideration of the cancellation of such Company Option and in settlement therefor: (i) a payment in cash in an amount equal to the Initial Option Cash Payment, multiplied by the total number of shares of Company Common Stock previously subject to such Company Option; (ii) a payment in shares of Parent Common Stock (valued at the Closing Average Stock Price) in an amount equal to the Initial Common Stock Stock Payment, multiplied by the total number of shares of Company Common Stock previously subject to such Company Option (the amounts set forth in clauses (i) and (ii) being referred to herein collectively as the “Initial Option Payment”); and (iii) the right to receive the Subsequent Common Consideration in an amount calculated with respect to the total number of shares of Company Common Stock previously subject to such Company Option as if the former holder of any such cancelled Company Option had been a holder of Company Common Stock at the Effective Time of Merger I (the “Subsequent Option Payment,” together with the Initial Option Payment, the “Option Payment”). From and after the Effective Time of Merger I, any such cancelled Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to the payment of the Option Payment. Prior to the Effective Time of Merger I, the Board of Directors of the Company shall have taken all steps necessary to cancel the Company Options and provide for automatic conversion of the Company Options into the right to receive the Option Payment.

Cancellation of Stock Options. Prior (a) Damson and G▇▇▇▇▇ each agree that, upon the Effective Option Cancellation Date (as defined below), each of them shall cancel such number of shares underlying their respective stock options, such that on the Effective Option Cancellation Date, each of G▇▇▇▇▇ and Damson shall beneficially own no more than 9.99% of the Common Stock of the Company on a fully-diluted basis. In connection with the foregoing, each of Damson and G▇▇▇▇▇ have surrendered to the Company's counsel, to be held in escrow, all copies of their respective agreements evidencing the stock options previously granted to them, all as listed on Exhibit C which is attached hereto and made a part hereof. On the Effective Time of Merger IOption Cancellation Date, the Company shall take all actions necessary shall, if necessary, reduce the number of shares underlying the stock options previously granted to Damson and appropriate G▇▇▇▇▇, and deliver to provide thateach of them, immediately prior to the Effective Time of Merger Imodified option certificates, each unexpired and unexercised option or similar right to purchase Company Common Stock (each, a “Company Option”), under any stock option plan of the Company or any other plan, agreement or arrangement (the “Company Stock Option Plans”), whether or not then exercisable or vested, shall be cancelled and, in exchange therefor, each former holder of any for such cancelled Company Option shall be entitled to receive (as promptly as practicable after the Effective Time of Merger I), in consideration of the cancellation of such Company Option and in settlement therefor: (i) a payment in cash in an amount equal to the Initial Option Cash Payment, multiplied by the total lesser number of shares of the Company's Common Stock, as provided in this Section 1.5. The Company Common Stock previously subject shall make all necessary and appropriate notations in its books and records to duly record the reduction, if necessary, of all such Company Option; (ii) a payment in shares of Parent Common Stock (valued at the Closing Average Stock Price) in an amount equal to the Initial Common Stock Stock Payment, multiplied by the total number of shares of Company Common Stock previously subject to such Company Option (the amounts set forth in clauses (i) stock options and (ii) being referred to herein collectively as the “Initial Option Payment”); and (iii) the right to receive the Subsequent Common Consideration in an amount calculated with respect to the total number of shares of Company Common Stock previously subject to such Company Option as if the former holder of any such cancelled Company Option had been a holder of Company Common Stock at the Effective Time of Merger I (the “Subsequent Option Payment,” together with the Initial Option Payment, the “Option Payment”). From and after the Effective Time of Merger I, any such cancelled Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to the payment of the Option Paymentrelated stock option agreements. Prior to the Effective Time Option Cancellation Date, neither Damson nor G▇▇▇▇▇, nor any of Merger Itheir respective Affiliates or "associates" (as that term is defined in Rule 405 under the Securities Act), will exercise any of their respective stock options and the Board Company will not grant additional stock options to Damson or G▇▇▇▇▇ (or any of Directors their respective Affiliates or associates) or amend or modify in any respect the terms of any stock options previously granted thereto, without the prior written consent of the Company Acquirers. (b) For purposes of this Agreement, "Effective Option Cancellation Date" shall mean the earlier to occur of (i) the Closing Date or (ii) June 30, 2006, if the Closing shall not have taken all steps necessary to cancel the Company Options and provide for automatic conversion occurred as a result of the Company Options into Company's breach of a material provision of the right to receive the Option PaymentPurchase Agreement.