Common use of RECAPITALIZATIONS; ASSUMPTION OF OPTIONS Clause in Contracts

RECAPITALIZATIONS; ASSUMPTION OF OPTIONS. The effect of the following “Events” upon the Option are described below: (i) a merger or consolidation in which the Corporation is the surviving corporation if Corporation shareholders as a result of the merger or consolidation receive stock of another corporation and/or property in exchange for their Corporation shares or any merger or consolidation in which the Corporation is not the surviving corporation (other than a merger or consolidation with a wholly owned subsidiary, a reincorporation of the Corporation in a different jurisdiction, or other transaction in which there is no substantial change in the shareholders of the Corporation and the options granted under this Plan are assumed by the successor corporation, which assumption shall be binding on all optionees); (ii) a dissolution or liquidation of the Corporation; (iii) the sale of substantially all of the assets of the Corporation; or (iv) any other transaction which qualifies as a “corporate transaction” under Section 424(a) of the Code wherein the shareholders of the Corporation give up all of their equity interest in the Corporation (except for the acquisition, sale or transfer of all or substantially all of the outstanding shares of the Corporation). Upon the occurrence of an Event, the Board of Directors shall at its complete discretion make arrangements (the “Arrangements”) which shall be binding upon the Optionee as to any portion of the Option, for the substitution of new options for such portion or for the assumption of such portion by any successor to the Corporation or its affiliate, for the acceleration of the expiration date of such portion to a date not earlier than thirty (30) days after notice to the Optionee, or for the cancellation of such portion in exchange for payment by any successor to the Corporation or its affiliate of deferred compensation to the Optionee. Such deferred compensation may, but need not, be in an amount equal to the difference between the fair market value of the Option Shares subject to such unexpired portion and the aggregate exercise price of the Option Shares under the terms of such unexpired portion on the date of the Event, and may, but need not, be paid in installments which correspond with the vesting schedule of the Option. Any such substitution or assumption of any portion of the Option need not comply with Section 425(a) of the Code nor in the event of the acceleration of the expiration date of any portion of the Option need the exercisability of such portion be accelerated.