AND CLASS OF
SECURITIES AND EXERCISE PRICE PER SHARE OF EACH OUTSTANDING OPTION, SHALL BE
APPROPRIATELY ADJUSTED BY THE COMPANY (OR SUBSTITUTED OPTIONS MAY BE MADE, IF
APPLICABLE) TO THE EXTENT DETERMINED BY THE BOARD.
(B)
REORGANIZATION EVENTS.
(1)
DEFINITION.
A "REORGANIZATION EVENT" SHALL MEAN:
(A) ANY MERGER
OR CONSOLIDATION OF THE COMPANY WITH OR INTO ANOTHER ENTITY AS A RESULT OF WHICH
ALL OF THE COMMON STOCK OF THE COMPANY IS CONVERTED INTO OR EXCHANGED FOR THE
RIGHT TO RECEIVE CASH, SECURITIES OR OTHER PROPERTY OR IS CANCELLED, (B) ANY
EXCHANGE OF ALL OF THE COMMON STOCK OF THE COMPANY FOR CASH, SECURITIES OR OTHER
PROPERTY PURSUANT TO A SHARE EXCHANGE TRANSACTION OR (C) ANY LIQUIDATION OR
DISSOLUTION OF THE COMPANY.
4
(2)
CONSEQUENCES OF A REORGANIZATION EVENT ON OPTIONS.
IN CONNECTION
WITH A REORGANIZATION EVENT, THE BOARD SHALL TAKE ANY ONE OR MORE OF THE
FOLLOWING ACTIONS AS TO ALL OR ANY OUTSTANDING OPTIONS ON SUCH TERMS AS THE
BOARD DETERMINES:
(I) PROVIDE THAT OPTIONS SHALL BE ASSUMED, OR SUBSTANTIALLY
EQUIVALENT OPTIONS SHALL BE SUBSTITUTED, BY THE ACQUIRING OR SUCCEEDING
CORPORATION (OR AN AFFILIATE THEREOF), (II) UPON WRITTEN NOTICE TO A
PARTICIPANT, PROVIDE THAT THE PARTICIPANT'S UNEXERCISED OPTIONS OR OTHER
UNEXERCISED OPTIONS SHALL BECOME EXERCISABLE IN FULL AND WILL TERMINATE
IMMEDIATELY PRIOR TO THE CONSUMMATION OF SUCH REORGANIZATION EVENT UNLESS
EXERCISED BY THE PARTICIPANT WITHIN A SPECIFIED PERIOD FOLLOWING THE DATE OF
SUCH NOTICE, (III) PROVIDE THAT OUTSTANDING OPTIONS SHALL BECOME REALIZABLE OR
DELIVERABLE, OR RESTRICTIONS APPLICABLE TO AN OPTION SHALL LAPSE, IN WHOLE OR IN
PART PRIOR TO OR UPON SUCH REORGANIZATION EVENT, (IV) IN THE EVENT OF A
REORGANIZATION EVENT UNDER THE TERMS OF WHICH HOLDERS OF COMMON STOCK WILL
RECEIVE UPON CONSUMMATION THEREOF A CASH PAYMENT FOR EACH SHARE SURRENDERED IN
THE REORGANIZATION EVENT (THE "ACQUISITION PRICE"), MAKE OR PROVIDE FOR A CASH
PAYMENT TO A PARTICIPANT EQUAL TO (A) THE ACQUISITION PRICE TIMES THE NUMBER OF
SHARES OF COMMON STOCK SUBJECT TO THE PARTICIPANT'S OPTIONS OR OTHER OPTIONS (TO
THE EXTENT THE EXERCISE PRICE DOES NOT EXCEED THE ACQUISITION PRICE) MINUS
(B) THE AGGREGATE EXERCISE PRICE OF ALL SUCH OUTSTANDING OPTIONS OR OTHER
OPTIONS, IN EXCHANGE FOR THE TERMINATION OF SUCH OPTIONS OR OTHER OPTIONS,
(V) PROVIDE THAT, IN CONNECTION WITH A LIQUIDATION OR DISSOLUTION OF THE
COMPANY, OPTIONS SHALL CONVERT INTO THE RIGHT TO RECEIVE LIQUIDATION PROCEEDS
(IF APPLICABLE, NET OF THE EXERCISE PRICE THEREOF) AND (VI) ANY COMBINATION OF
THE FOREGOING.
For purposes of clause (i) above, an Option shall be considered assumed if,
following consummation of the Reorganization Event, the Option confers the right
to purchase, for each share of Common Stock subject to the Option immediately
prior to the consummation of the Reorganization Event, the consideration
(whether cash, securities or other property) received as a result of the
Reorganization Event by holders of Common Stock for each share of Common Stock
held immediately prior to the consummation of the Reorganization Event (and if
holders were offered a choice of