Common use of Stock Options Clause in Contracts

Stock Options. At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. At Immediately prior to the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share shares of Company CAC Common Stock under the Company Equity Plans (each, a “Company CAC Stock Option”) shall vest and become fully exercisablewill, whether or not then vested or subject to any performance condition that has not been satisfied. At at the Effective Time, each Company cease to represent an option to purchase CAC Common Stock Option shall and will be converted automatically into an option to purchase the a number of shares of Parent CEC Common Stock (each, a “Converted Stock Option”) equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share)) of (i) the number of shares of CAC Common Stock subject to such CAC Stock Option and (ii) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (x) the exercise price for each of such share of Company Common Stock subject to a Company CAC Stock Option divided by (y) the Exchange Ratio, and each unvested CAC Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted granted pursuant to the terms of this Section 2.4(a) Caesars Acquisition Company 2014 Performance Incentive Plan shall be referred amended to provide that it shall become vested and exercisable (at target performance levels, if applicable) upon the optionee’s termination of employment without “cause” (as a “Parent Exchange Option.” In connection with defined in the issuance Caesars Acquisition Company 2014 Performance Incentive Plan) by the Surviving Entity or any of Parent Exchange Optionsits Subsidiaries or for Good Reason (as defined herein), Parent shall reserve for issuance in either case within six (6) months following the number of shares of Parent Common Stock that will become subject Effective Time. Prior to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent the CAC Board shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or adopt appropriate resolutions and take all other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts actions necessary to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “each CAC Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment be converted, assumed and amended, as applicable, in accordance with Section 2.1(d)the foregoing. The number Following the Effective Time, except for the amendment of shares subject the unvested CAC Stock Options granted pursuant to any Parent Exchange the Caesars Acquisition Company 2014 Performance Incentive Plan, each Converted Stock Option will continue to be governed by the same terms and conditions as were applicable under the exercise price per share of such Parent Exchange CAC Stock Plan for each CAC Stock Option immediately prior to the Effective Time. Immediately prior to the Effective Time, each outstanding and unvested CEC Stock Option granted under to the Caesars Entertainment Corporation 2012 Performance Incentive Plan shall be determined in a manner which would not result amended to provide that it shall become vested and exercisable (at target performance levels, if applicable) upon the optionee’s termination of employment without “cause” (as defined in the conversion Caesars Entertainment Corporation 2012 Performance Incentive Plan) by the Surviving Entity or any of Company Stock Options into Parent Exchange Options being treated its Subsidiaries or for Good Reason (as a new grant of stock options under Section 409A of defined herein), in either case within six (6) months following the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsEffective Time.

Stock Options. (i) At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock Option under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisablePlans, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Timeunvested, each Company Stock Option shall be converted into deemed to constitute an option to purchase acquire (a "New Parent Option"), on the same terms and conditions as were applicable under such Company Option, the number of shares of Parent Common Stock of Parent (rounded to the nearest whole number) equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (yA) the number of shares Shares issuable upon exercise of such Company Option and (B) the Price Per Share divided by the average of the closing sales prices of Common Stock which could have been obtained of Parent on the New York Stock Exchange for the ten (10) consecutive days immediately prior to and including the day preceding the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share)Time, at an exercise price per share (rounded up to the nearest whole cent) equal to (x) the aggregate exercise price for each the Shares otherwise purchasable pursuant to such share of Company Common Stock subject to a Company Stock Option divided by (y) the aggregate number of shares of Common Stock Option Conversion Fraction, and all references of Parent purchasable pursuant to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, New Parent Option (as calculated immediately above); provided, however, that Parent shall treat each in the case of any Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to which Section 422 of the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with Code applies, the issuance of Parent Exchange Optionsoption price, Parent shall reserve for issuance the number of shares purchasable pursuant to such option and the terms and conditions of Parent Common Stock that will become exercise of such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. At or prior to the Effective Time, the Company shall take all necessary actions to permit the assumption of the unexercised Company Options by Parent Exchange Options pursuant to this Section 2.4(a)and shall take all action necessary to cause the funds held in the Company's Employee Stock Purchase Plan to be used to purchase outstanding Shares through open market transactions so that such Shares will be converted into the right to receive cash in the Merger; provided that thereafter the Company shall terminate the Company's Employee Stock Purchase Plan. As promptly as reasonably practicable after -40- 44 (ii) Effective at the Effective Time, Parent shall issue to assume, as a New Parent Option, each holder outstanding Company Option in accordance with this Section and with the terms of an outstanding Parent Exchange Option a document evidencing the foregoing assumption Stock Plan under which it was issued and the stock option agreement by Parentwhich it is evidenced. Not later than thirty calendar days after the Closing Date, Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act of 1933 on the Closing Date with respect to the Form S-8, or other appropriate form, covering shares of Parent Common Stock subject to such New Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans Shares (each, a “Company Stock MediVision Option”) shall vest and become fully exercisableunder the Option Plans (as defined in Section 5.01(b)(i)(A)), whether or not then vested exercisable and whether or subject to any performance condition that has not been satisfied. At the Effective Timevested, each Company Stock Option shall be assumed by OIS such that it is converted into an option (a “Replacement Option”) to purchase the a number of shares of Parent OIS Common Stock equal to the product number of (x) the Stock Shares underlying such MediVision Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share)Conversion Ratio, at an exercise price per share (rounded up to the nearest cent) of Common Stock equal to the exercise price for each per Share of such share of Company Common Stock subject MediVision Option as in effect immediately prior to a Company Stock Option the Closing divided by the Stock Option Conversion Fraction, Ratio and all references to the Company in each with such option shall be deemed to refer to Parent, where appropriate. The other terms of and conditions as were applicable to such Company Stock MediVision Option (including any repurchase rights or vesting provisions); provided, that OIS shall use its reasonable efforts to effect the conversion in such a manner that the Replacement Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, have the same tax attributes as the MediVision Options; provided, however, that Parent (i) the exercise price and the number of shares of OIS Common Stock purchasable pursuant to the Replacement Options shall treat each Company Stock Option be determined in a manner consistent with the requirements of Sections 409A, 422 and 424(a) of the Code, as fully vested applicable; (ii) for the purposes of converting option exercise prices, euros will be converted into U.S. dollars at the exchange rate prevailing at the close of business on the trading date prior to the date of this Agreement; and exercisable. Each Company Stock Option converted (iii) the Replacement Options will be issued pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange OIS Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange OptionsPlans. For purposes of this Section 2.4(a4.04(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option OIS shall be determined in a manner which would not result in considered to have used its "reasonable efforts" to effect the conversion of Company the MediVision Options so that the Replacement Options have the same tax attributes as the MediVision Options in the following circumstances: (i) if the Options Tax Ruling is not issued prior to the Effective Date, OIS issues “Nonqualified Stock Options into Parent Exchange Options being treated Options,” meaning options which do not qualify as a new grant of incentive stock options within the meaning of Section 422 of the Code (“ISOs”), for all of the Replacement Options; and (ii) if the Options Tax Ruling is issued prior to the Effective Date, (A) for the MediVision Options with favorable tax treatment under Israeli tax law as described in Section 409A 6.12(c)(i) (“Favorable MV Options”), OIS coordinates the issuance of such Replacement Options with the Options Tax Ruling so that ISOs may be issued to the extent such conversion is permitted and consistent with Sections 422 and 424(a) of the Code, and (B) for the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid non-Favorable MV Options, OIS issues Nonqualified Stock Options for such new grant of stock optionsReplacement Options.

Stock Options. At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans Shares (each, a “"COMPANY STOCK OPTION") under Company Stock Option”) shall vest and become fully exercisableOption Plans or under any agreement which Company disclosed in Section 2.3 of the Company Disclosure Schedule, whether or not then vested or vested, shall by virtue of the Merger be assumed by Parent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options immediately prior to any performance condition that has not been satisfied. At the Effective TimeTime (including, without limitation, any repurchase rights or vesting provisions and provisions regarding the acceleration of vesting on certain transactions), except that: (i) each Company Stock Option shall will be converted into an option to purchase the solely exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares Company Shares that were issuable upon exercise of such Company Common Stock which could have been obtained Option immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option Exchange Ratio (as defined below), rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after and (ii) the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to per share exercise price for the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause issuable upon exercise of such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “assumed Company Stock Option Conversion Fraction” shall mean will be equal to the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and quotient determined by dividing the exercise price per share Company Share at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Option Exchange Ratio, rounded up to the nearest whole cent. Parent shall comply with the terms of all such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange and use its best efforts to ensure, to the extent required by, and subject to the provisions of, Company Option Plans and permitted under the Code or other relevant laws and regulations that any Company Stock Options being treated as a new grant of stock options that qualified for tax treatment under Section 409A 422 of the CodeCode prior to the Effective Time and that any Company Stock Options that qualified for tax treatment under Section 102 of the Ordinance prior to the Effective Time continue to so qualify, with the same rights, after the Effective Time. Parent shall take all corporate actions necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of all Company Stock Options pursuant to the terms set forth in this Section 5.11(a). Prior to the Effective Time, the Company shall take all actions necessary to effect the transactions contemplated by this Section 5.11(a); provided, however, Company shall not be required to obtain consents from optionees with respect to the option assumption formula set forth herein: The "OPTION EXCHANGE RATIO" shall be equal to the greater of (i) the quotient obtained by dividing the Per Share Cash Consideration by the average closing sale price of one share of Parent Common Stock as reported on Nasdaq for the five (5) consecutive trading days ending immediately prior to the Effective Time and (ii) the sum of (A) 0.2365, and (B) the Company and quotient obtained by dividing $12.375 by the average closing sale price of one share of Parent shall agree upon any adjustments Common Stock as reported on Nasdaq for the five (5) consecutive trading days ending immediately prior to this Section 2.4(a) necessary to avoid such new grant of stock optionsthe Effective Time.

Stock Options. At Company will, promptly on or after the date of this Agreement, take all such actions as it is permitted or required to take under the terms of its stock option plans to cancel, after the Offer Completion (as defined in Section 6.5(a)) and prior to the Effective Time, each all outstanding unexpired options (collectively, the "STOCK OPTIONS" and unexercised option individually, a "STOCK OPTION") to purchase or acquire a share shares of Company Common Stock heretofore granted under any such employee or nonemployee director stock option plan with Company and to pay, promptly, and in any event within five days, after the Company Equity Plans Offer Completion, in cancellation of each such Stock Option (each, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company such Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock is then exercisable) a cash amount equal to the product amount, if any, by which the Merger Consideration exceeds the per share exercise price of (x) the such Stock Option Conversion Fraction (as defined in this Section 2.4(a)) Option, multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior then subject to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share"STOCK OPTION SETTLEMENT AMOUNT"), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock but subject to all required tax withholdings by Company. Each holder of a Company then outstanding Stock Option divided by the Stock Option Conversion Fraction, and all references that Company does not have a right to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted cancel pursuant to the terms of this Section 2.4(athe applicable stock option plan, upon execution of a cancellation agreement (a "STOCK OPTION CANCELLATION AGREEMENT") shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange OptionsCompany, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and which Company shall use its commercially reasonable efforts to cause obtain from each such registration statement holder prior to remain effective until or promptly after the exercise Offer Completion, shall have the right to receive in cancellation of such Stock Option (whether or expiration not such Stock Option is then exercisable) a cash payment from Company promptly and in any event within five days after the later of the Parent Exchange OptionsOffer Completion or the execution of a Stock Option Cancellation Agreement, in an amount equal to the Stock Option Settlement Amount, without interest, but subject to all required tax withholdings by Company. For Each Stock Option that is subject to a Stock Option Cancellation Agreement shall be canceled upon payment of the Stock Option Settlement Amount for such Option. The Company Board or the Committee appointed pursuant to Section 2 of the Funco, Inc. 1993 Stock Option Plan Amended and Restated Through July 31, 1998 has determined that a Potential Change in Control (as defined in said Stock Option Plan) has occurred for purposes of this Section 2.4(a), determining the “Change in Control Price (as defined in said Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(dPlan). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. At (a) Each grantee under any of the Effective TimeMII Legacy Equity Plans (i) who is a B&W Legacy Award Holder or will be a B&W Employee, or who will not be a B&W Employee but will serve on the board of directors of B&W and not on the board of directors of MII immediately after the Distribution Date, and (ii) who holds as of the Distribution Date, one or more MII Options, shall receive, as a replacement award in substitution for each outstanding unexpired and unexercised such MII Option (which shall be cancelled), an option to purchase or acquire a share number of Company shares of B&W Common Stock under the Company B&W New Equity Plans Plan (each, a “Company Stock Replacement B&W Option”) shall vest and become fully exercisable, whether or not then vested or having a value (calculated using the Post-Distribution B&W Share Price) equal to the value of the MII Common Stock subject to any performance condition that has not been satisfiedthe MII Option (calculated using the Pre-Distribution MII Share Price), as calculated pursuant to the following provisions. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the The number of shares of Parent B&W Common Stock subject to a Replacement B&W Option shall be equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (yi) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company MII Common Stock subject to an MII Option as of the Distribution Date and (ii) a Company Stock fraction, the numerator of which is the Pre-Distribution MII Share Price and the denominator of which is the Post-Distribution B&W Share Price. Each such Replacement B&W Option divided by shall have the Stock Option Conversion Fraction, and all references same comparative ratio of the exercise price to the Company in Post-Distribution B&W Share Price as the exercise price of each such option MII Option to the Pre-Distribution MII Share Price. B&W shall be deemed to refer to Parent, where appropriate. The other terms responsible for (i) the satisfaction of such Company Stock all tax reporting and withholding requirements in respect of the exercise of Replacement B&W Options shall continue to apply issued in accordance with their termsthis Section 3.4(a) and (ii) remitting the appropriate tax or withholding amounts to the appropriate taxing authorities. Replacement B&W Options shall not be exercisable until the Registration Statement Effectiveness Date. Except as provided in the foregoing provisions of this Section 3.4(a), Replacement B&W Options granted under this Section 3.4(a) shall be granted on terms which are in all material respects identical (including pursuant with respect to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant vesting) to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange MII Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsthey replace.

Stock Options. At (i) On the Effective TimeDate, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisableFBKP Option which is then outstanding, whether or not then vested or subject exercisable, shall cease to any performance condition that has not been satisfied. At the Effective Time, each Company represent a right to acquire shares of FBKP Common Stock Option and shall be converted automatically into an option to purchase the number of shares of Parent PSB Common Stock equal to Stock, and PSB shall assume each FBKP Option, in accordance with the product terms of (x) the FBKP Stock Option Conversion Fraction Plan, the FBKP Standby Options and the stock option agreements and certificates by which they are evidenced, except that from and after the Effective Date, (as defined in this Section 2.4(a)i) multiplied PSB and its Board of Directors or a duly authorized committee thereof shall be substituted for FBKP and FBKP's Board of Directors or duly authorized committee thereof administering such FBKP Stock Option Plan, (ii) each FBKP Option assumed by PSB may be exercised solely for shares of PSB Common Stock, (yiii) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company PSB Common Stock subject to a Company Stock such FBKP Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed equal to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent FBKP Common Stock subject to Parent such FBKP Option immediately prior to the Effective Date multiplied by the Applicable Exchange Options Ratio, provided that any fractional shares of PSB Common Stock resulting from such multiplication shall be rounded to the nearest share, and (iv) the per share exercise price under each such FBKP Option shall use its commercially reasonable efforts be adjusted by dividing the per share exercise price under each such FBKP Option by the Applicable Exchange Ratio, provided that such exercise price shall be rounded to cause such registration statement to remain effective until the exercise or expiration nearest cent. Notwithstanding clauses (iii) and (i v) of the Parent Exchange Optionspreceding sentence, each FBKP Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the IRC, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of the option within the meaning of Section 424(h) of the IRC. For purposes PSB and FBKP agree to take all necessary steps to effect the foregoing provisions of this Section 2.4(a1.02(f), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. (a) At the Effective Time, each outstanding unexpired and unexercised stock option that is then outstanding, whether vested or unvested (a "Company Option"), shall be assumed by Parent in accordance with the terms (as in effect as of the Effective Time) of the Company's 1996 Stock Option Plan, the stock option agreement and/or warrant agreement by which such Company Option is evidenced. All rights with respect to purchase or acquire a share of Company Common Stock under the outstanding Company Equity Plans (eachOptions shall thereupon be converted into rights with respect to Parent Common Stock. Accordingly, a “Company Stock Option”) shall vest from and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At after the Effective Time, (a) each Company Stock Option shall assumed by Parent may be converted into an option to purchase exercised solely for shares of Parent Common Stock, (b) the number of shares of Parent Common Stock subject to each such assumed Company Option shall be equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained that were subject to such Company Option immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option (Exchange Ratio, rounded down to the nearest whole share)number of shares of Parent Common Stock, at an (c) the per share exercise price for the Parent Common Stock issuable upon exercise of each such assumed Company Option shall be determined by dividing the exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a such Company Stock Option divided Option, as in effect immediately prior to the Effective Time, by the Stock Option Conversion FractionExchange Ratio, and all references rounding the resulting exercise price up to the Company in nearest whole cent, and (d) all restrictions on the exercise of each such option assumed Company Option shall be deemed to refer to Parentcontinue in full force and effect, where appropriate. The and the term, exercisability, vesting schedule and other terms provisions of such Company Stock Options Option shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, otherwise remain unchanged; provided, however, that each such assumed Company Option shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any Recapitalization Event after the Effective Time. The Company and Parent shall treat each Company take all action that may be necessary (under the Company's 1996 Stock Option as fully vested Plan and exercisable. Each Company Stock Option converted pursuant otherwise) to effectuate the terms provisions of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with 1.6. Following the issuance of Parent Exchange OptionsClosing, Parent shall reserve for issuance will send to each holder of an assumed Company Option a written notice setting forth (i) the number of shares of Parent Common Stock that will become subject to such assumed Company Option, and (ii) the exercise price per share of Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder Common Stock issuable upon exercise of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parentsuch assumed Company Option. Parent shall file with the SEC, within thirty (30) days after the Closing Date, a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the registering shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until issuable upon the exercise or expiration of the Company Options assumed by Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments pursuant to this Section 2.4(a) necessary to avoid 1.6, provided such new grant of stock optionsCompany Options are registrable on Form S-8.

Stock Options. (a) At the Effective Time, the Target Stock Option Plan and each outstanding unexpired Target Option, whether vested or unvested, shall be assumed by Acquiror, and unexercised Target's repurchase right with respect to any unvested option to purchase or acquire a share of Company Common Stock shares granted under the Company Equity Plans (eachTarget Stock Option Plan shall be assigned to Acquiror and Acquiror shall thereafter comply with the terms of the Target Stock Option Plan with respect to such assumed Target Options. On the Closing Date, a “Company Target shall deliver to Acquiror an updated Option Schedule current as of such date. Each Target Option so assumed by Acquiror under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Target Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject Option Plan immediately prior to any performance condition that has not been satisfied. At the Effective Time, each Company Stock except that (i) such Target Option shall be converted into an option to purchase the exercisable for that number of whole shares of Parent Acquiror Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Target Common Stock which could have been obtained that were issuable upon exercise of such Target Option immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option Exchange Ratio (as defined below) and rounded down to the nearest whole share)number of shares of Acquiror Common Stock, at an (ii) the per share exercise price for the shares of Acquiror Common Stock issuable upon exercise of such Target Option shall be equal to the quotient determined by dividing the exercise price per share (of Target Common Stock at which such option was exercisable immediately prior to the Effective Time by the Option Exchange Ratio, rounded up down to the nearest whole cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms vesting of such Company Stock any unvested Target Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option will not accelerate as fully vested and exercisable. Each Company Stock Option converted pursuant to a result of the terms execution of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with Agreement or the issuance consummation of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a)transactions contemplated hereby. As promptly as reasonably practicable Within 45 business days after the Effective Time, Parent shall Acquiror will issue to each person who, immediately prior to the Effective Time was a holder of an outstanding Parent Exchange a Target Option a document evidencing the foregoing assumption of such Target Option by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect Acquiror, and within 45 business days after an adjustment to the shares of Parent Common Stock subject to Parent Option Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration Ratio as a result of the Parent provisions of Annex A hereto, Acquiror will issue to each such person a revised document reflecting the adjusted Option Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d)Ratio. The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options."

Stock Options. At (a) Immediately prior to the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share shares of Company IRT Common Stock (an "IRT Option") granted under any IRT Plan (as defined below) (other than any "Stock Purchase Plan" within the Company Equity Plans (eachmeaning of Section 423 of the Code), a “Company Stock Option”) shall vest and become fully exercisableshall, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Timeexercisable, each Company Stock Option shall be converted into become and represent an option to purchase the number of shares of Parent Company Common Stock equal (an "Assumed Option") rounded up to the product of nearest whole share, determined by multiplying: (x) the number of shares of IRT Common Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied subject to such option immediately prior to the Effective Time by (y) the Exchange Ratio, at an exercise price per share of Company Common Stock (increased to the nearest whole cent) equal to the exercise price per share of IRT Common Stock immediately prior to the Effective Time divided by the Exchange Ratio; provided, however, that in the case of any IRT Option to which Section 421 of the Code applies by reason of its qualification as an incentive stock option under Section 422 of the Code, the conversion formula shall be adjusted if necessary to comply with Section 424(a) of the Code. After the Effective Time, each Assumed Option shall vest only to the extent required by the terms of the underlying IRT Option. If no automatic vesting requirement is set forth in the underlying IRT Option or other agreement, then the Assumed Option shall be subject to the same vesting schedule and be exercisable upon the same terms and conditions as were applicable to the related option immediately prior to the Effective Time. As soon as reasonably practical, the Company shall register under the Securities Act on Form S-8 or another appropriate SEC form (and use its commercially reasonable efforts to maintain the effectiveness thereof and maintain the current status of the prospectuses contained therein) all shares of Company Common Stock issuable pursuant to all Assumed Options. At or prior to the Effective Time, the Company shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company delivery in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance Assumed Options. Schedule 2.8 of Parent Exchange Options, Parent shall reserve for issuance the number IRT Disclosure Memorandum contains a true and complete list of all IRT Options and shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder restricted capital stock of an IRT issued and outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to date of this Agreement and the vesting schedules and exercise prices of such IRT Options and shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsrestricted stock.

Stock Options. At Subject to and conditioned upon the Effective TimeExecutive’s delivering to the Company the Release provided for in Section 16 with all periods for revocation expired and notwithstanding any provision in the Incentive Compensation Plan, each outstanding unexpired the 1998 Option Plan, other relevant plan or program or this Section 6, all stock options granted to the Executive by the Company which have not otherwise vested shall vest immediately upon a Termination that occurs upon the date of the Change in Control or thereafter on or before the second anniversary of the Change in Control and unexercised such vested stock options shall remain exercisable for a period of ninety (90) days following the Termination Date (or such longer period as may be set forth in the applicable stock option to purchase plan or acquire award agreement), but not later than the expiration of the stated option term; provided, however, such stock options shall vest immediately upon the consummation of a share of Company Common Stock Change in Control if the successor entity has not either assumed (expressly or impliedly) the Company’s obligations under the Company Equity Plans (eachapplicable option award or plan document or issued to the Executive a substitute stock option award of equivalent value on no less favorable terms for vesting or payment as provided under the stock option award so replaced; provided further that, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At Section 6(d), within five (5) days after all periods for revocation have expired in the Effective TimeRelease provided for in Section 16, each the Company Stock Option shall be converted into may, at its election, pay to the Executive in cash an option to purchase the number of shares of Parent Common Stock amount equal to the product aggregate of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) difference between the number exercise price of shares of Company Common Stock which could have been obtained each stock option granted to the Executive prior to the Effective Time upon consummation of the exercise Change in Control that remains outstanding and unexercised at the time of each such Company Termination, and the fair market value (computed as the average of the high and low trades reported on the New York Stock Option (rounded down to Exchange) of the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fractionoption, and all references to determined as of the Company in each such option Termination Date. Such cash payment shall be deemed to refer be in lieu of and in substitution for any right the Executive may have to Parent, where appropriate. The other terms of exercise such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to stock option or a related stock appreciation right under the terms of this Section 2.4(a) shall be referred the relevant stock option plan describing such rights, and the Executive agrees to as a “Parent Exchange Option.” In connection with surrender all stock options and related stock appreciation rights being cashed out hereunder prior to receiving the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Optionscash payment described above. For purposes of this Section 2.4(a)hereunder, the term “Stock Option Conversion Fractionstock option” shall mean the Exchange Ratio subject should be read to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would include all other similar equity instruments, including, but not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of limited to, stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsappreciation rights.

Stock Options. (a) At the Effective Time, each outstanding unexpired the Acquiror will assume the Company's 1995 Stock Option Plan (the "Option Plan") and unexercised all of the Company's obligations thereunder and may, at its election, provide for the merger of the Company's option to purchase or acquire a share plans into those of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfiedAcquiror. At the Effective Time, each Company Stock the Option Plan shall be converted into amended to provide that each outstanding option issued pursuant to the Option Plan shall become an option to purchase acquire, on the same terms and conditions as were applicable under such option (including, without limitation, the time periods allowed for exercise), a number of shares of Parent Acquiror Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) Exchange Ratio and the number of shares of Company Common Stock which could have been obtained prior subject to the Effective Time upon the exercise such option (provided that any fractional shares of each Acquiror Common Stock resulting from such Company Stock Option (multiplication shall be rounded down up to the nearest whole share), at an exercise a price per share (rounded up down to the nearest cent) equal to the exercise price for each such per share of the shares of Company Common Stock subject to a Company Stock Option such option divided by the Stock Exchange Ratio on the same terms and conditions as were applicable under such option (including without limitation, the time periods allowed for exercise). Immediately prior to the Effective Time, the Company may issue remaining unissued options under the Option Conversion FractionPlan, to result in a total of 62,500 granted options, and may also amend the Option Plan or adopt a further option plan to permit issuance of up to an additional 1, 350 option grants. The Company shall also amend the Option Plan to (i) modify the Option Plan by eliminating any existing provisions providing for an adjustment in option shares in the event of payment of a cash dividend (in connection with which amendment the Company shall utilize its best efforts to have option grantees enter into replacement option agreements which eliminate any claim or right to such adjustment), (ii) eliminate any right of option grantees to put granted options to the Company, and (iii) include such further amendments an may be reasonably requested by Acquiror. Notwithstanding the foregoing, with respect to options that are incentive stock options, the excess of the aggregate fair market value of the shares subject to the option immediately after the substitution over the aggregate option price of such shares shall not be more than the excess of the aggregate fair market value of all shares subject to the option immediately before the substitution over the aggregate option price of such shares. The duration and other terms of the option shall remain the same, except that all references to the Company in each such option shall refer to the Acquiror. All options granted under the Option Plans shall be deemed to refer to Parent, where appropriatefully vested as of the day preceding the Effective Time. The other terms of such Company Stock Options shall continue Acquiror agrees to apply in accordance with their terms, including pursuant take all corporate action necessary to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the a sufficient number of shares of Parent Acquiror Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder for delivery upon exercise of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) options under the Securities Act on Option Plans assumed by the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment Acquiror in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsAgreement.

Stock Options. (i) At the Effective TimeDate, each Graystone Stock Option which is outstanding unexpired and unexercised option immediately prior to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisableEffective Date, whether or not then vested or subject and exercisable, shall cease to any performance condition that has not been satisfied. At the Effective Time, each Company represent a right to acquire shares of Graystone Common Stock Option and shall be converted automatically into an option to purchase the number of shares of Parent Tower Common Stock, and Tower shall assume each Graystone Stock equal to Option, in accordance with the product terms of the applicable Graystone Stock-Based Plan or other agreement by which it is evidenced, except that from and after the Effective Date, (xi) Tower and a disinterested committee of the Tower board of directors shall be substituted for Graystone and the committee of the Graystone board of directors (including, if applicable, the entire Graystone board of directors) administering such Graystone Stock Plan, (ii) each Graystone Stock Option Conversion Fraction assumed by Tower may be exercised solely for shares of Tower Common Stock, (as defined in this Section 2.4(a)) multiplied by (yiii) the number of shares of Company Tower Common Stock which could have been obtained subject to such Graystone Stock Option shall be equal to the number of shares of Graystone Common Stock subject to such Graystone Stock Option immediately prior to the Effective Time upon Date multiplied by the exercise Exchange Ratio, provided that any fractional shares of each Tower Common Stock resulting from such Company Stock Option (multiplication shall be rounded down to the nearest whole share), at an and (iv) the per share exercise price under each such Graystone Stock Option shall be adjusted by dividing the per share (exercise price under each such Graystone Stock Option by the Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. Notwithstanding clauses (iii) equal to and (iv) of the exercise price for preceding sentence, each such share of Company Common Stock subject to a Company Graystone Stock Option divided which is an “incentive stock option” shall be adjusted as required by Sections 409A and 424 of the Stock Option Conversion FractionIRC, and the regulations and guidance promulgated thereunder, so as not to constitute a modification, extension or renewal of the option within the meaning of Sections 409A and 424(h) of the IRC. Tower and Graystone agree to take all references necessary steps to effect the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms foregoing provisions of this Section 2.4(a) shall be referred 1.02(g), including in the case of Tower taking all corporate action necessary to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the a sufficient number of shares of Parent Tower Common Stock that will become subject for delivery upon exercise of the options to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Tower Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment issued in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsherewith.

Stock Options. (a) At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire Company Shares (a share of Company Common Stock "COMPANY STOCK OPTION") granted under the Company's plans identified in the Schedule 1.4 as being the only compensation or benefit plans or agreements pursuant to which Company Equity Plans Shares may be issued (eachcollectively, a “Company Stock Option”) shall vest and become fully exercisablethe "COMPANY STOCK OPTION PLANS"), whether vested or not then vested or subject vested, shall be deemed assumed by Acquirer and shall thereafter be deemed to constitute an option to acquire, on the same terms and conditions (including any performance condition that has not been satisfied. At the Effective Time, each provisions for acceleration) as were applicable under such Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon (in accordance with the exercise past practice of each the Company with respect to interpretation and application of such Company Stock Option terms and conditions), the number (rounded down to the nearest whole share)number) of shares of Acquirer Common Stock determined by multiplying (x) the number of Company Shares subject to such Company Stock Option immediately prior to the Effective Time by (y) the Exchange Ratio, at an exercise a price per share of Acquirer Common Stock (rounded up to the nearest whole cent) equal to (A) the exercise price for each per Company Share otherwise purchasable pursuant to such share of Company Common Stock subject to a Company Stock Option divided by (B) the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriateExchange Ratio. The other terms parties intend that the conversion of such the Company Stock Options hereunder will meet the requirements of Section 424(a) of the Code and this Section 1.4(a) shall continue to apply in accordance be interpreted consistent with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisableintention. Each Company Stock Option converted pursuant Subject to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Company Stock Options and the documents governing such Company Stock Options, Parent shall reserve for issuance the number Merger will not terminate or accelerate any Company Stock Option or any right of shares of Parent exercise, vesting or repurchase relating thereto with respect to Acquirer Common Stock that acquired upon exercise of such assumed Company Stock Option. Holders of Company Stock Options will become subject not be entitled to Parent Exchange Options pursuant acquire Company Shares after the Merger. In addition, prior to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall the Company will make any amendments to the terms of such stock option or compensation plans or arrangements that are necessary to give effect to the transactions contemplated by this Section 1.4. Promptly following the Effective Time, Acquirer will issue to each holder of an outstanding Parent Exchange Company Stock Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Company Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsby Acquirer.

Stock Options. (a) At the Effective Time, each KNBT Stock Option which is outstanding unexpired and unexercised option immediately prior to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisableEffective Time, whether or not then vested or subject and exercisable, shall cease to any performance condition that has not been satisfied. At the Effective Time, each Company represent a right to acquire shares of KNBT Common Stock Option and shall be converted automatically into an option to purchase the number of shares of Parent NPB Common Stock, and NPB shall assume each KNBT Stock equal to Option, in accordance with the product terms of the applicable KNBT Stock Plan and stock option or other agreement by which it is evidenced, except that from and after the Effective Time, (xi) NPB and the Human Resources Committee of the NPB Board shall be substituted for KNBT and the committee of the KNBT Board (including, if applicable, the entire KNBT Board) administering such KNBT Stock Option Conversion Fraction Plan, (as defined in this Section 2.4(a)ii) multiplied each KNBT Stock Option assumed by NPB may be exercised solely for shares of NPB Common Stock, (yiii) the number of shares of Company NPB Common Stock which could have been obtained subject to such KNBT Stock Option shall be equal to the number of shares of KNBT Common Stock subject to such KNBT Stock Option immediately prior to the Effective Time upon multiplied by the exercise Exchange Ratio, provided that any fractional shares of each NPB Common Stock resulting from such Company Stock Option (multiplication shall be rounded down to the nearest whole share), at an (iv) the per share exercise price under each such KNBT Stock Option shall be adjusted by dividing the per share (exercise price under each such KNBT Stock Option by the Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and (v) all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock outstanding KNBT Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as become fully vested and exercisable. Each Company exercisable at the Effective Time notwithstanding anything to the contrary in the applicable KNBT Stock Plan or stock option or other agreement by which a KNBT Stock Option converted pursuant to is evidenced. Notwithstanding clauses (iii) and (iv) of the terms of this Section 2.4(a) preceding sentence, each KNBT Stock Option which is an “incentive stock option” shall be referred to adjusted as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption required by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options Sections 409A and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A 424 of the Code, and the Company regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of the option within the meaning of Sections 409A and Parent shall 424(h) of the Code. NPB and KNBT agree upon any adjustments to take all necessary steps to effect the foregoing provisions of this Section 2.4(a) 2.05 (a), including in the case of NPB taking all corporate action necessary to avoid such new grant reserve for issuance a sufficient number of stock optionsshares of NPB Common Stock for delivery upon exercise of the options to issue shares of NPB Common Stock issued in accordance herewith.

Stock Options. At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share All options which may be exercised for issuance of Company Common Stock under the Company Equity Plans (whether or not vested) (each, a “Company Stock Option” and collectively the “Company Stock Options”) shall vest are described in the Company Disclosure Schedule and become fully exercisableare issued and outstanding pursuant to the Company’s Amended and Restated 1997 Stock Option Plan, whether or not then vested or subject 1999 Stock Option Plan and 2003 Stock Option Plan (each, a “Company Stock Option Plan” and collectively, the “Company Stock Option Plans”) and the agreements pursuant to any performance condition that has not which such Company Stock Options were granted (each, an “Option Grant Agreement”). True and complete copies of the Company Stock Option Plans and all Option Grant Agreements relating to outstanding Company Stock Options have been satisfieddelivered to Parent. At the Effective Time, each Company Stock Option that (i) is outstanding at the Effective Time, and (ii) would otherwise survive the Effective Time in the absence of the transactions contemplated by this Agreement (“Old Stock Options”), shall be converted into assumed by Parent through the grant of an option to purchase acquire shares of Parent Common Stock on the terms set forth below (each Old Stock Option, as assumed, a “Parent Stock Option”). All Old Stock Options shall automatically be converted as of the Effective Time, into Parent New Options which shall be identical to the Old Stock Options in all material respects, except that (i) upon exercise of the Parent Options, the optionholder will receive Parent Common Stock rather than Company Common Stock, (ii) the number of shares of Parent Common Stock covered by each Parent Option shall equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to covered by the Effective Time upon the exercise of each such Company corresponding Old Stock Option multiplied by the Exchange Ratio, (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest centiii) equal to the exercise price for of each such share of Company Common Stock subject Parent Option shall equal the exercise price applicable to a Company the corresponding Old Stock Option divided by the Stock Option Conversion Fraction, Exchange Ratio and all references to (iv) the Company in each committee that administers the plan by which such option Parent Options are governed shall be deemed to refer to a committee established by the Board of Directors of Parent. In all other material respects, where appropriate. The other the Parent Options shall be governed by the terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each the Company Stock Option as fully vested Plan at and exercisableafter the Effective Time. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable Promptly after the Effective Time, Parent shall use its reasonable best efforts to register the shares issuable upon exercise of the Parent Options under the Securities Act of 1933, and to keep such registration in effect until such time as all New Stock Options have been exercised. In connection with the foregoing, (i) the foregoing is intended to effect an assumption of the Old Stock Options by Parent under Section 424(a) of the Code and (ii) neither a Parent Stock Option nor the assumption of Old Stock Option shall give the holder of an Old Stock Option additional benefits which he did not have under such an Old Stock Option within the meaning of Section 424(a)(1) of the Code. Subject to issuance of the Parent Stock Options and the foregoing, the Company Stock Option Plans and all options or other rights to acquire Company Common Stock issued thereunder shall terminate at the Effective Time. Parent shall not issue or pay for any fractional shares otherwise issuable upon exercise of a Parent Stock Option. Prior to the Effective Time (to the extent required as determined by Parent or the Company under applicable law, the terms of the Company Stock Option Plans or otherwise), Parent shall receive agreements from each holder of an outstanding Parent Exchange Old Stock Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible does not elect to use) under the Securities Act on the Closing Date with respect exercise such Old Stock Option immediately prior to the shares Effective Time and have the Company Common Stock acquired as a result of such exercise converted into Parent Common Stock subject pursuant to Section 2.1 of this Agreement, pursuant to which each such holder agrees to accept a Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until Stock Option in substitution for the exercise or expiration Old Stock Option, as of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsEffective Time.

Stock Options. At the Effective TimeFor purposes of this Agreement, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock "CBI Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into " means an option to purchase CBI common shares pursuant to a CBI LTIP and "Convergys Option" means an option to purchase Convergys common shares pursuant to the Convergys LTIP. At the time of the Distribution, each holder of a CBI Option shall receive a Convergys Option to purchase a number of Convergys common shares equal to the number of CBI common shares of Parent Common Stock equal subject to the product CBI Option. Each Convergys Option shall have the same terms and conditions (including vesting) as the CBI Option with respect to which it is granted, except that termination of employment shall mean (xi) in the Stock case of a CBI employee or director, termination of employment with CBI and (ii) in the case of a Convergys employee or director, termination of employment with Convergys. Each CBI Option Conversion Fraction (as defined shall be amended to provide that, in this Section 2.4(a)) multiplied by (y) the number case of shares a Convergys employee or director, termination of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise employment shall mean termination of each such Company Stock Option (rounded down to the nearest whole share), at an employment with Convergys. The exercise price per share of each CBI Option (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a"CBI Exercise Price") shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Optionsreduced, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange the associated Convergys Option (the "Convergys Exercise Price") shall be determined in a manner which would not result set so that (i) the sum of the CBI Exercise Price (after the reduction provided herein) and the Convergys Exercise Price is equal to the CBI Exercise Price (before the reduction provided herein) and (ii) the ratio of the CBI Exercise Price (after the reduction provided herein) to the Convergys Exercise Price is equal to the ratio of the average of the daily high and low per-share prices of CBI common shares on the New York Stock Exchange ("NYSE") during each of the five trading days starting on the ex-dividend date for the Distribution to the average of the daily high and low per-share prices of Convergys common shares on the NYSE during each of the five trading days starting on the ex-dividend date for the Distribution. Notwithstanding the foregoing, in the conversion event that the number of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A Convergys common shares to be distributed to each CBI shareholder at the time of the CodeDistribution with respect to each CBI common share owned by the shareholder on the record date for the Distribution is greater or less than one, the number of Convergys common shares represented by each Convergys Option and the Company and Parent Convergys Exercise Price shall agree upon any adjustments be adjusted to this Section 2.4(a) necessary to avoid reflect such new grant of stock optionsdifference.

Stock Options. At the Effective Time, each option outstanding unexpired (and unexercised option which by its terms does not lapse on or before the Effective Time) to purchase or acquire a share of Company Common Stock (a "COMPANY STOCK OPTION") granted under the Company's 1993 Employee Stock Option Plan, as amended (the "COMPANY EMPLOYEE OPTION PLAN"), or the Company's 1993 Outside Director Stock Option Plan (the "COMPANY DIRECTOR PLAN" and, together with the Company Equity Plans (eachEmployee Option Plan, a “Company Stock Option”) shall vest and become fully exercisablethe "COMPANY OPTION PLANS"), whether or not then vested or subject exercisable, shall be replaced by a comparable option to purchase Parent Common Stock (a "PARENT STOCK OPTION"), after giving effect to the requirements of the Company Option Plans (including without limitation any performance condition that has not been satisfiedprovisions with respect to a change of control of the Company) pursuant to which it was granted and any stock option agreement by which it is evidenced. At Notwithstanding the foregoing, in the event that, as of the Effective Time, Parent shall not have reserved a sufficient number of shares for issuance upon exercise of each of the Parent Stock Options contemplated by this Section 2.5, then, to the extent of such deficiency and on a pro rata basis, each holder of a Company Stock Option (whether or not then vested or exercisable) shall be entitled to receive, immediately prior to the Effective Time, cash in an amount equal to the difference between (A) the Base Consideration Value minus (B) the per-share exercise price of the applicable Company Stock Option. It is intended that the foregoing provisions shall be undertaken in a manner that will not constitute a "modification" as defined in Section 424 of the Code as to any stock option which is an "incentive stock option." Each Parent Stock Option shall be converted into an option to purchase the exercisable for that number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of the Company Common Stock which could have been obtained prior Shares subject to the Effective Time upon the exercise of each such corresponding Company Stock Option multiplied by the Stock Exchange Ratio, and shall have an exercise price per share equal to its exercise price per Company Share divided by the Stock Exchange Ratio (the "Adjusted Strike Price"). Any resulting fractional share of Parent Common Stock shall be rounded down to the nearest whole share), at share and Parent shall pay an exercise price per share (rounded up amount in cash to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms holder of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant at the Effective Time equal to the terms product of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares such fractional share of Parent Common Stock that will become subject multiplied by an amount equal to the Stock Value minus the Adjusted Strike Price. Parent Exchange Options pursuant and the Company shall use commercially reasonable efforts to take all such steps as may be required to cause the transactions contemplated by this Section 2.4(a). As promptly as reasonably practicable after 2.5 and any other dispositions of equity securities of the Company or dispositions of Parent equity securities in connection with this Agreement by each individual who (i) is a director or officer of the Company or (ii) at the Effective Time, Parent shall issue will become a director or officer of Parent, to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) be exempt under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration Rule 16b-3 of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsAct.

Stock Options. At the Effective Time, each Each stock option issued and outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the 1993 Stock Option Plan, as amended, of the Company Equity Plans (each, a “Company the "Stock Option Plan") is referred to herein as an "Employee/Director Stock Option”" and all such options are referred to herein, collectively, as the "Employee/Director Stock Options." Each stock option issued and outstanding under the 1993 Directors' Stock Option Plan (the "Directors' Stock Option Plan") shall vest is referred to herein as a "Director's Option" and become fully exercisableall such options are referred to herein, whether or not then vested or subject collectively, as the "Directors' Options." The Employee/Director Stock Options and the Directors' Options are referred to any performance condition that has not been satisfied. herein, collectively, as the "Company Options" and, individually, as a "Company Option." At the Effective Time, each Company Stock Option shall become immediately fully vested and shall be converted into an option to purchase shares of Parent Common Stock, as provided below. Following the Effective Time, each such Company Option shall be exercisable upon the same terms and conditions as then are applicable to such Company Option, except that (i) each such Company Option shall be exercisable for that number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock for which could have been obtained such Company Option was exercisable immediately prior to the Effective Time upon Date and (y) the Stock Exchange Ratio and (ii) the exercise price of each such Company Stock Option (rounded down option shall be equal to the nearest whole share), at an quotient obtained by dividing the exercise price per share (rounded up of such Company Option by the Stock Exchange Ratio. From and after the date of this Agreement, no additional options to the nearest cent) equal to the exercise price for each such share purchase shares of Company Common Stock subject to a shall be granted under the Company Stock Option divided Plan, Directors' Stock Option Plan or otherwise. Except as otherwise agreed to by the Stock Option Conversion Fractionparties, and all references to no person shall have any right under any stock option plan (or any option granted thereunder) or other plan, program or arrangement of the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their termsrespect to, including pursuant any right to such preexisting terms and conditionsacquire, provided, however, that Parent shall treat each equity securities of the Company Stock Option following the Effective Time. At or as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to soon as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of a Company Option that is canceled an outstanding agreement that accurately reflects the terms of the Parent Exchange Option a document evidencing the foregoing assumption substituted therefore as contemplated by Parentthis Section 2.7. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible i) take all corporate actions necessary to use) under the Securities Act on the Closing Date with respect to the reserve for issuance such number of shares of Parent Common Stock subject as will be necessary to satisfy exercises in full of all Parent Exchange Options and shall after the Effective Time, (ii) use its commercially reasonable best efforts to cause such registration statement ensure that an effective Registration Statement on Form S-8 is on file with the Securities and Exchange Commission (the "SEC") with respect to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the CodeCommon Stock, and the Company and (iii) use its reasonable best efforts to have such shares admitted to trading upon exercises of Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsOptions.

Stock Options. Section 2.4.1 At the Effective Time, each outstanding all unexercised and unexpired and unexercised option options to purchase or acquire a share of Company Common Stock (“Company Options”) then outstanding, under any stock option plan of the Company Company, including the 1995 Nonstatutory Stock Option Plan, the 1995 Director Option Plan, the 1996 Nonstatutory Stock Option Plan and the 2006 Equity Plans Incentive Plan and any other plan, agreement or arrangement (each, a the “Company Stock OptionOption Plans”) shall vest and become fully exercisable), whether or not then vested or exercisable, will be assumed by Parent (each, an “Assumed Company Option”). Each Assumed Company Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions as set forth in the Company Stock Option Plan applicable to such Assumed Company Option and any performance condition that has not been satisfied. At agreements thereunder immediately prior to the Effective Time, except that (A) each Assumed Company Stock Option shall will be converted into an option to purchase the exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained that were issuable upon exercise of such Assumed Company Option immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option (Exchange Ratio, rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after and (B) the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to per share exercise price for the shares of Parent Common Stock subject issuable upon exercise of such Assumed Company Option, will be equal to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and quotient determined by dividing the exercise price per share of Company Common Stock at which such Parent Assumed Company Option was exercisable immediately prior to the Effective Time by the Exchange Option Ratio, rounded up to the nearest whole cent. Continuous employment with the Company or its subsidiaries shall be determined in a manner which would not result in credited to the conversion optionee for purposes of determining the vesting of all Assumed Company Options after the Effective Time. Parent will assume the Company Stock Options into Option Plans at the Effective Time, provided, however, that following the Effective Time, Parent Exchange Options being treated as a new grant of stock options will issue awards, if any, only under Section 409A of the Code2006 Equity Incentive Plan. The 1995 Nonstatutory Stock Option Plan, the 1995 Director Option Plan and the 1996 Nonstatutory Stock Option Plan will be assumed pursuant to the preceding sentence solely for purposes of governing the Assumed Company and Parent shall agree upon any adjustments Options following the Effective Time that were previously issued pursuant to this Section 2.4(a) necessary to avoid the terms of such new grant of stock optionsplans.

Stock Options. At Effective as of the Effective TimeDistribution Date, each Tenneco shall cause all outstanding unexpired and unexercised option options to purchase or acquire a share of Company Tenneco Common Stock under held by employees and officers other than (i) Active Employees and Former Employees of Automotive Group, (ii) employees of Packaging Corporation of America and (iii) employees of the Company Equity Plans folding carton division (eachor persons who have succeeded to the rights of any persons described in (i), a “Company Stock Option”(ii) shall vest and become fully exercisable, whether or not then vested or subject (iii) with respect to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option options to purchase the number of shares of Parent Tenneco Common Stock equal Stock) to be replaced by options to purchase Packaging Common Stock. Subject to the product requirements of (x) applicable law and generally accepted accounting principles, the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share)number, at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option replacement options shall be determined in a manner which would consistent with that described in Exhibit A attached hereto. Options to purchase Tenneco Common Stock held by persons described in clause (ii) or (iii) above, not result exercised prior to the Distribution Date shall be canceled effective as of the Distribution Date. Options held by Active Employees and Former Employees of Automotive Group (or persons who have succeeded to the rights of such persons) shall, unless exercised prior to the Distribution Date, remain outstanding as adjusted as provided herein after the Distribution Date, subject to the requirements of applicable law and generally accepted accounting principles. The parties recognize that in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of some jurisdictions, Automotive Group employees were granted rights other than stock options under Section 409A in lieu of the CodeSpecial Stock Option Award of 100 options per grantee, and in those jurisdictions, the outstanding rights will be adjusted comparably. The Automotive Company options and Parent rights shall agree upon any adjustments have the same terms and conditions as prior to this Section 2.4(a) necessary the Distribution Date except that the number of options and the option exercise price shall be adjusted as described in Exhibit A attached hereto. To the extent that the exercisability of options to avoid such new purchase Tenneco Common Stock currently is subject to the attainment of share price hurdles, those hurdles will also be adjusted with respect to both options to purchase Packaging Common Stock and Tenneco Common Stock. Tenneco may grant of stock optionsspecial pre-Distribution Date exercisability with respect to some or all options which are not otherwise exercisable.

Stock Options. At (i) On the Effective TimeDate, each outstanding unexpired FLC Option and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisableeach Patriot Option which is then outstanding, whether or not then vested exercisable, shall cease to represent a right to acquire shares of FLC Common Stock or subject to any performance condition that has not been satisfied. At Patriot Common Stock, as the Effective Timecase may be, each Company Stock Option and shall be converted automatically into an option to purchase the number of shares of Parent Holding Company Common Stock, and the Holding Company shall assume each FLC Option and Patriot Option, in accordance with the terms of the applicable FLC Stock equal to Option Plan or Patriot Stock Option Plan, as the product of case may be, and the stock option agreement by which it is evidenced, except that from and after the Effective Date, (xi) the Holding Company and its Board of Directors or a duly authorized committee thereof shall be substituted for FLC, Patriot or their respective Boards of Directors or duly authorized committee thereof administering such FLC Stock Option Conversion Fraction Plan or Patriot Stock Option Plan, as the case may be, (as defined in this Section 2.4(a)ii) multiplied each FLC Option and Patriot Option assumed by the Holding Company may be exercised solely for shares of the Holding Company Common Stock, (yiii) the number of shares of Holding Company Common Stock which could have been obtained subject to each Patriot Option shall be equal to the number of shares of Patriot Common Stock subject to such Patriot Option immediately prior to the Effective Time upon Date multiplied by the exercise Patriot Exchange Ratio, provided that any fractional shares of each Holding Company Common Stock resulting from such Company Stock Option (multiplication shall be rounded down to the nearest whole share), at an and (iv) the per share exercise price under each such Patriot Option shall be adjusted by dividing the per share (exercise price under each such Patriot Option by the Patriot Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent, (v) equal to the exercise price for each such share number of shares of Holding Company Common Stock subject to a Company Stock each FLC Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed equal to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent FLC Common Stock subject to Parent such FLC Option immediately prior to the Effective Date multiplied by the Applicable FLC Common and Senior Preferred Exchange Options Ratio, provided that any fractional shares of Holding Company Common Stock resulting from such multiplication shall be rounded down to the nearest share, and (vi) the per share exercise price under each such FLC Option shall use its commercially reasonable efforts be adjusted by dividing the per share exercise price under each such FLC Option by the FLC Common and Senior Preferred Exchange Ratio, provided that such exercise price shall be rounded up to cause such registration statement to remain effective until the exercise or expiration nearest cent. Notwithstanding clauses (iii), (iv), (v) and (vi) of the Parent Exchange Optionspreceding sentence, each Patriot Option or FLC Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the IRC, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of the option within the meaning of Section 424(h) of the IRC. For purposes Patriot and FLC agree to take all necessary steps to effect the foregoing provisions of this Section 2.4(a1.02(f), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. At Effective as of the Effective TimeDistribution Date, each Tenneco shall cause all outstanding unexpired and unexercised option options to purchase or acquire a share of Company Tenneco Common Stock under held by employees and officers other than (i) Active Employees and Former Employees of Automotive Group, (ii) employees of Packaging Corporation of America and (iii) employees of the Company Equity Plans folding carton division (eachor persons who have succeeded to the rights of any persons described in (i), a “Company Stock Option”(ii) shall vest and become fully exercisable, whether or not then vested or subject (iii) with respect to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option options to purchase the number of shares of Parent Tenneco Common Stock equal Stock) to be replaced by options to purchase Packaging Common Stock. Subject to the product requirements of (x) applicable law and generally accepted accounting principles, the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share)number, at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option replacement options shall be determined in a manner which would consistent with that described in Exhibit A attached hereto. Options held by persons described in clause (ii) or (iii) above, not result exercised prior to the Distribution Date shall be canceled effective as of the Distribution Date. Options held by Active Employees and Former Employees of Automotive Group (or persons who have succeeded to the rights of such persons) shall, unless exercised prior to the Distribution Date, remain outstanding as adjusted as provided herein after the Distribution Date, subject to the requirements of applicable law and generally accepted accounting principles. The parties recognize that in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of some jurisdictions, Automotive employees were granted rights other than stock options under Section 409A in lieu of the CodeSpecial Stock Option Award of 100 options per grantee, and in those jurisdictions, the outstanding rights will be adjusted comparably. The Automotive Company options and Parent rights shall agree upon any adjustments have the same terms and conditions as prior to this Section 2.4(a) necessary the Distribution Date except that the number of options and the option exercise price shall be adjusted as described in Exhibit A attached hereto. To the extent that the exercisability of options to avoid such new purchase Tenneco Common Stock currently is subject to the attainment of share price hurdles, those hurdles will also be adjusted with respect to both options to purchase Packaging Common Stock and Tenneco Common Stock. Tenneco may grant of stock optionsspecial pre-Distribution Date exercisability with respect to some or all options which are not otherwise exercisable.

Stock Options. (i) At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire Company Shares (a share of "Company Common Stock Option") under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisablePlans, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Timeunvested, each Company Stock Option shall be converted into deemed to constitute an option to purchase acquire, on the same terms and conditions as were applicable under such Company Option (except to the extent such terms and conditions are altered in accordance with their terms as a result of the consummation of the transactions contemplated by this Agreement), the same number of shares of Parent SBC Common Stock equal as the holder of such Company Option would have been entitled to receive pursuant to the product of (x) the Stock Merger had such holder exercised such Company Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained full immediately prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole sharenumber) (a "Substitute Option"), at an exercise price per share (rounded up to the nearest centwhole cent)(the "Substitute Option Price") equal to (y) the aggregate exercise price for each the Company Shares otherwise purchasable pursuant to such share of Company Common Stock subject to a Company Stock Option divided by (z) the number of full shares of SBC Common Stock deemed purchasable pursuant to such Company Option Conversion Fractionin accordance with the foregoing. For each Substitute Option substituted for a Company Option that included a right under certain circumstances to receive dividend equivalents in the form of stock units ("Company Stock Units"), and all references Company Stock Units credited to the Company in each account of the holder of such option shall Substitute Option at the Effective Time shall, as of the Effective Time, be deemed to refer constitute a number of stock units, each of which shall represent one share of SBC Common Stock ("SBC Stock Units"), equal to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent SBC Common Stock the holder of such Substitute Option would have been entitled to receive pursuant to this Agreement had such Company Stock Units been distributed to such holder in full immediately prior to the Effective Time and thereafter SBC Stock Units shall continue to be credited to the account of the holder of such Substitute Option to the same extent and on the same terms and conditions as they would have under the Company Option for which the Substitute Option was substituted (except that will become subject the record dates and dividend amounts shall be the record dates and dividend amounts for SBC Common Stock), and all such SBC Stock Units shall be distributed at the same times and in the same manner as the Company Stock Units would have been distributed had the Substitute Option not been substituted for the Company Option (except that the option price used to Parent Exchange determine if the SBC Stock Units can be distributed shall be the Substitute Option Price). At or prior to the Effective Time, the Company shall make all necessary arrangements with respect to the Company Stock Plans to permit the assumption of the unexercised Company Options by SBC pursuant to this Section 2.4(a). As promptly and as reasonably soon as practicable after the Effective Time, Parent Time SBC shall issue use its best efforts to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) register under the Securities Act on Form S-8 or other appropriate form (and use its best efforts to maintain the Closing Date with respect to the effectiveness thereof) shares of Parent SBC Common Stock subject issuable pursuant to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange all Substitute Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. (a) At the Effective Time, (x) each Company Option that is outstanding unexpired and unexercised immediately prior to the Effective Time, whether or not vested, shall be converted into and become an option to purchase or acquire Parent Common Stock, and Parent shall assume such Company Option in accordance with the terms (as in effect as of the date of this Agreement) of the applicable Company Option Plan and the terms of the stock option agreement by which such Company Option is evidenced; and (y) each share of Parent Common Stock into which a share of Company Restricted Stock was converted pursuant to Section 1.5 shall be a share of Parent Restricted Stock and shall remain subject to the same terms and conditions as were applicable under the award of Company Restricted Stock immediately prior to the Effective Time. All rights with respect to Company Common Stock under the Company Equity Plans (eachOptions assumed by Parent shall thereupon be converted into options with respect to Parent Common Stock. Accordingly, a “Company Stock Option”) shall vest from and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At after the Effective Time, : (A) each Company Stock Option shall assumed by Parent may be converted into an option to purchase exercised solely for shares of Parent Common Stock; (B) the number of shares of Parent Common Stock equal subject to the product of (x) the Stock each Company Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied assumed by (y) Parent shall be determined by multiplying the number of shares of Company Common Stock which could have been obtained that were subject to such Company Option immediately prior to the Effective Time upon by the exercise of each such Company Stock Option (rounded Exchange Ratio, and rounding the resulting number down to the nearest whole share), at an exercise price number of shares of Parent Common Stock; (C) the per share (rounded up to the nearest cent) equal to the exercise price for the Parent Common Stock issuable upon exercise of each such Company Option assumed by Parent shall be determined by dividing the per share exercise price of Company Common Stock subject to a such Company Stock Option divided Option, as in effect immediately prior to the Effective Time, by the Stock Option Conversion FractionExchange Ratio, and all references rounding the resulting exercise price up to the nearest whole cent; and (D) any restriction on the exercise of any Company Option assumed by Parent shall continue in each such option shall be deemed to refer to Parentfull force and effect and the term, where appropriate. The exercisability, vesting schedule and other terms provisions of such Company Stock Options Option shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, remain unchanged; provided, however, that Parent Board or a committee thereof shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant succeed to the terms authority and responsibility of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (Company Board or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date committee thereof with respect to the shares of Parent Common each Company Option, Company Restricted Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsassumed by Parent.

Stock Options. At (i) On the Effective TimeDate, each outstanding unexpired Heritage Option and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisableeach BCB Option which is then outstanding, whether or not then vested exercisable, shall cease to represent a right to acquire shares of Heritage Common Stock or subject to any performance condition that has not been satisfied. At BCB Common Stock, as the Effective Timecase may be, each Company Stock Option and shall be converted automatically into an option to purchase the number of shares of Parent Holding Company Common Stock, and the Holding Company shall assume each Heritage Option and BCB Option, in accordance with the terms of the applicable Heritage Stock equal to Option Plan or BCB Stock Option Plan, as the product of case may be, and the stock option agreement by which it is evidenced, except that from and after the Effective Date, (xi) the Holding Company and its Board of Directors or a duly authorized committee thereof shall be substituted for Heritage, BCB or their respective Boards of Directors or duly authorized committee thereof administering such Heritage Stock Option Conversion Fraction Plan or BCB Stock Option Plan, as the case may be, (as defined in this Section 2.4(a)ii) multiplied each Heritage Option and BCB Option assumed by the Holding Company may be exercised solely for shares of the Holding Company Common Stock, (yiii) the number of shares of Holding Company Common Stock which could have been obtained subject to each BCB Option shall be equal to the number of shares of BCB Common Stock subject to such BCB Option immediately prior to the Effective Time upon Date multiplied by the exercise BCB Exchange Ratio, provided that any fractional shares of each Holding Company Common Stock resulting from such Company Stock Option (multiplication shall be rounded down to the nearest whole share), at an and (iv) the per share exercise price under each such BCB Option shall be adjusted by dividing the per share (exercise price under each such BCB Option by the BCB Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent, (v) equal to the exercise price for each such share number of shares of Holding Company Common Stock subject to a Company Stock each Heritage Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed equal to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Heritage Common Stock subject to Parent such Heritage Option immediately prior to the Effective Date multiplied by the Heritage Exchange Options Ratio, provided that any fractional shares of Holding Company Common Stock resulting from such multiplication shall be rounded down to the nearest share, and (vi) the per share exercise price under each such Heritage Option shall use its commercially reasonable efforts be adjusted by dividing the per share exercise price under each such Heritage Option by the Heritage Exchange Ratio, provided that such exercise price shall be rounded up to cause such registration statement to remain effective until the exercise or expiration nearest cent. Notwithstanding clauses (iii), (iv), (v) and (vi) of the Parent Exchange Optionspreceding sentence, each BCB Option or Heritage Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the IRC, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of the option within the meaning of Section 424(h) of the IRC. For purposes BCB and Heritage agree to take all necessary steps to effect the foregoing provisions of this Section 2.4(a1.02(f), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share shares of Company Common Stock under the Company Equity Plans (each, a “"COMPANY STOCK OPTION") under the Company Stock Option”) shall vest and become fully exercisableOption Plans, whether or not then vested vested, shall by virtue of the Merger and without any action on the part of -49- 55 Company, Parent or any holder of Company Stock Option, be assumed by Parent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such Company Stock Option immediately prior to any performance condition that has not been satisfied. At the Effective TimeTime (including, without limitation, any repurchase rights or vesting provisions and provisions regarding the acceleration of vesting on certain transactions, other than the transactions contemplated by this Agreement, except to the extent otherwise provided for in any plan or agreement applicable to such Company Stock Options and disclosed on Section 2.03 or 2.18 of the Company Schedule), except that (i) each Company Stock Option shall will be converted into an option to purchase the exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option (Exchange Ratio, rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after and (ii) the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to per share exercise price for the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause issuable upon exercise of such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “assumed Company Stock Option Conversion Fraction” shall mean will be equal to the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent Exchange Option shall be determined in a manner which would not result in comply with the conversion terms of all such Company Stock Options. It is intended that Company Stock Options into assumed by Parent Exchange Options being treated shall qualify following the Effective Time as a new grant of incentive stock options under as defined in Section 409A 422 of the Code to the extent such Company Stock Options qualified as incentive stock options immediately prior to the Effective Time and the provisions of this Section 5.11 shall be applied consistent with such intent in accordance with Section 424 of the Code, and the Company and . Parent shall agree take all corporate actions necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon any adjustments to exercise of assumed Company Stock Options on the terms set forth in this Section 2.4(a) necessary to avoid such new grant of stock options5.11(a).

Stock Options. At The Founders shall use their best -------------- efforts to obtain from each Optionholder the Effective Timeconsent of such Optionholder to the transactions contemplated by the form of Option Amendment Agreement, which consent shall be evidenced by the execution and delivery by such Optionholder of a counterpart to an Option Amendment Agreement between ICI and such Optionholder. As soon as practicable following the date of this Agreement, the Founders shall use their best efforts to cause the Board of Directors of ICI (or, if appropriate, any committee administering the 1995 ICI Stock Option Plan or the 1996 ICI Stock Option Plan) to adopt such resolutions or take such other actions (i) as are required (A) to adjust the terms of all outstanding options to purchase shares of ICI Common Stock (and any stock appreciation rights linked to the price of shares of ICI Common Stock) heretofore granted to any employee (but not former employee) or director of ICI under the 1995 ICI Stock Option Plan or the 1996 ICI Stock Option Plan, whether vested or unvested, and (B) to adjust the terms of all outstanding options to purchase shares of ICI Common Stock (and any stock appreciation rights linked to the price of shares of ICI Common Stock) heretofore granted to any former employee of ICI under the 1995 ICI Stock Option Plan or the 1996 ICI Stock Option Plan that are vested as of the date on which the employment of such employee was terminated, in the case of clauses (A) and (B), as necessary to provide that each outstanding unexpired and unexercised such option to purchase or acquire a share shares of Company ICI Common Stock under (and any stock appreciation right related thereto) outstanding immediately prior to the Company Equity Plans effectiveness of the Merger shall not give the holder thereof the right to receive any capital stock of ICI or Holdings after the effective time of the Merger or to receive any consideration other than, for each option (eachand any stock appreciation right related thereto), a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock amount in cash equal to (i) the product excess, if any, of (x) the consideration paid in the Merger for each outstanding share of ICI Common Stock Option Conversion Fraction over (as defined in this Section 2.4(a)y) the exercise price per share of ICI Common Stock subject to such option multiplied by (yii) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company ICI Common Stock subject to a Company such option and (ii) as are required to make such other changes to the 1995 ICI Stock Option divided by Plan and the 1996 ICI Stock Option Conversion Fraction, Plan as IHS and all references the Founders may agree are appropriate to give effect to the Company in each such option shall be deemed to refer to Parent, where appropriatetransactions contemplated by this Agreement and the Ancillary Agreements. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and Founders shall use its commercially reasonable their best efforts to cause such registration statement ICI to remain effective until (i) cause the exercise or expiration 1995 ICI Stock Option Plan and the 1996 ICI Stock Option Plan to terminate upon consummation of the Parent Exchange Options. For purposes Merger, (ii) cause all provisions in any other ICI Benefit Plan providing for the issuance, transfer or grant of this Section 2.4(a)any capital stock of ICI, or any interest in respect of any capital stock of ICI, to be deleted upon consummation of the Merger and (iii) ensure that, upon consummation of the Merger, no holder of options to purchase shares of ICI Common Stock or participant in the 1995 ICI Stock Option Plan, the “1996 ICI Stock Option Conversion Fraction” Plan or any other ICI Benefit Plan shall mean the Exchange Ratio subject have any right to adjustment in accordance with Section 2.1(d). The number acquire any capital stock of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsICI or Holdings.

Stock Options. At or prior to the Effective TimeDate, each Palatin and MBI shall take all action necessary to cause the assumption by Palatin as of the Effective Date of all outstanding unexpired and unexercised option options as of the Effective Date (the "Outstanding Options") to purchase or acquire a share of Company MBI Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisableStock, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Timeunvested, each Company issued under MBI's Pre-1984 Stock Option Plan, 1984 Stock Option Plan, 1993 Stock Option Plan, , 1993 Outside Director's Stock Option Plan, 1997 Outside Directors Stock Option Plan and 1998 Stock Option Plan (the "MBI Stock Option Plans") or pursuant to separate option agreements, all of which are listed in Section 3.5 of the MBI Disclosure Schedule (as defined below). Each of the Outstanding Options shall be converted without any action on the part of the holder thereof into an option to purchase shares of Palatin Common Stock as of the Effective Date. The number of shares of Palatin Common Stock that the holder of an assumed Outstanding Option shall be entitled to receive upon the exercise of such option shall be a number of whole and fractional shares determined by multiplying the number of shares of Parent MBI Common Stock equal subject to such option, determined immediately before the product Effective Date, by the Exchange Ratio. The exercise price of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number each share of shares of Company Palatin Common Stock which could have been obtained prior subject to an assumed Outstanding Option shall be the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share amount (rounded up to the nearest whole cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided obtained by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and dividing the exercise price per share of MBI Common Stock at which such Parent option is exercisable immediately before the Effective Date by the Exchange Option Ratio. Except as specified in Section 3.5 of the MBI Disclosure Schedule, the assumption and substitution of options as provided in this Section shall not give the holders of such options additional benefits or additional vesting rights which they did not have immediately prior to the Effective Date or relieve the holders of any obligations or restrictions applicable to their options or the shares obtainable upon exercise of the options. Only whole shares of Palatin Common Stock shall be determined issued upon exercise of any Outstanding Option, and in a manner which would not result lieu of receiving any fractional share of Palatin Common Stock, the holder of such option shall receive in cash the conversion of Company Stock Options into Parent Exchange Options being treated Prior Day Market Price (as a new grant of stock options under Section 409A defined below) of the Codefractional share, net of the applicable exercise price of the fractional share and applicable withholding taxes. After the Effective Date, the MBI Stock Option Plans and any Outstanding Options issued outside the scope of the MBI Stock Option Plans shall be continued in effect by the Surviving Corporation subject to amendment, modification, suspension, abandonment or termination as provided therein, and the Company and Parent Stock Option Plans as so continued (i) shall agree upon any adjustments relate solely to Outstanding Options, (ii) thereafter shall relate only to the issuance of Palatin Common Stock as provided in this Section 2.4(aand (iii) necessary shall continue to avoid provide for equitable adjustment in the terms of Outstanding Options in the event of certain corporate events which alter the capital structure of the Surviving Corporation. For purposes of this Agreement, the term "Prior Day Market Price" with respect to shares of either Palatin Common Stock or MBI Common Stock, as applicable, shall mean the last reported sale price or, if not so reported, the average of the high bid and low asked prices in the over-the-counter market, as reported by the applicable exchange or automated quotation system on which such new grant of stock optionstrades for the day immediately preceding the day for which the Prior Day Market Price is being determined.

Stock Options. At With respect to the Effective Timeissuance of shares of MBI common stock pursuant to the exercise of stock options granted under a Stock Option Plan, or under any other stock option plan or any stock-based incentive compensation plan that MBI may adopt in the future, Mallinckrodt shall have the right, in respect of each outstanding unexpired and unexercised option fiscal year of MBI beginning with its fiscal year ending March 31, 1996, to purchase from MBI all or acquire a share any portion of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent MBI common stock which it would be necessary for Mallinckrodt to purchase in order to maintain the same percentage of ownership of issued and outstanding shares of MBI common stock that Mallinckrodt possessed as of the last day of that fiscal year without regard to shares of MBI common stock issued pursuant to the exercise of stock options during that fiscal year (or in the case of MBI's fiscal year ending March 31, 1996, after the date of this Agreement). For this purpose: (i) the issued and outstanding shares of MBI common stock as of the last day of MBI's fiscal year shall be determined assuming the conversion of all issued and outstanding MBI Securities convertible into shares of MBI common stock; and (ii) Mallinckrodt's percentage of ownership shall be determined solely in respect of shares of Common Stock equal and Other Common Stock owned by Mallinckrodt and its Affiliates and shall not take into account any Other MBI Securities which Mallinckrodt or an Affiliate of Mallinckrodt may own. MBI shall notify Mallinckrodt no later than 20 business days after the end of each fiscal year of MBI of the shares of MBI common stock which Mallinckrodt is entitled to purchase under this Section 6.04 in respect of that fiscal year. Mallinckrodt shall have twenty (20) business days from the date of receipt of MBI's notice in which to advise MBI whether or to what extent Mallinckrodt elects to exercise its rights under this Section 6.04. If Mallinckrodt does not respond, or if Mallinckrodt indicates that it will not exercise its rights, Mallinckrodt shall be considered irrevocably to have waived its rights under this Section 6.04 with respect to the product fiscal year in question. If Mallinckrodt timely advises MBI that Mallinckrodt will exercise its rights, Mallinckrodt shall have the right to acquire all or any portion of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock MBI common stock which could have been obtained prior it is entitled to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), purchase at an exercise a price per share (rounded up to the nearest cent) equal to the market price on the date Mallinckrodt advises MBI that it will exercise price for each such share its rights. Closing shall be as soon as practicable after Mallinckrodt advises MBI that it will exercise its rights under this Section 6.04. At closing, Mallinckrodt and MBI shall provide customary and appropriate representations to one another regarding the purchase and sale of Company Common Stock subject to a Company Stock Option divided the MBI common stock being purchased by Mallinckrodt and shall also provide any additional documentation reasonably requested by the Stock Option Conversion Fractionother party (for example, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms an appropriate opinion of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Optioncounsel).” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisable, to purchase shares of Company Stock granted under the Company Stock Plans that is outstanding immediately prior to the Effective Time (whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option vested) shall be converted into an option deemed fully vested and shall be cancelled in exchange for the right to purchase the number of receive shares of Parent Common Stock (without interest, and subject to deduction for any required withholding Tax, with cash being paid in lieu of issuing fractional shares of Parent Common Stock) with a value equal to the product of (xi) the excess (if any) of the Merger Consideration Closing Value minus the exercise price per share under such Company Stock Option Conversion Fraction and (as defined in this Section 2.4(a)) multiplied by (yii) the number of shares of Company Common Stock which could have been obtained prior subject to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, Option; provided, however, that Parent shall treat each (a) if the exercise price per share of any such Company Stock Option as fully vested and exercisable. Each is equal to or greater than the Merger Consideration Closing Value, such Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred cancelled without any payment being made in respect thereof, and (b) at the option of Parent, in lieu of paying all or a portion of the amounts due to as a “Parent Exchange Option.” In connection with the issuance holder of Parent Exchange Options, Parent shall reserve for issuance the number of Company Stock Options under this paragraph in shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective TimeStock, Parent may substitute for such shares an equivalent amount in cash, and (c) such holders of Company Stock Options shall issue have delivered to each holder the Company an executed Option Consent Agreement. For purposes of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to preceding sentence, the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts be issued to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion holders of Company Stock Options into shall be deemed to have a value equal to the closing price of Parent Exchange Options Common Stock on the NYSE on the trading day immediately preceding the Closing Date. Promptly following the Closing Date (and, in any event, within ten Business Days thereof), Parent shall (1) if any shares of Parent Common Stock are being treated as a new grant issued to any holder of stock options under Section 409A of the CodeCompany Stock Options, cause Parent’s transfer agent to issue such Parent Common Stock, and (2) if any cash payments are being made to any holder of Company Stock Options, cause the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid process such new grant of stock optionspayments through its payroll system.

Stock Options. At In addition to the Effective Timebasic salary provided for above, each outstanding unexpired Employer hereby grants to executive the right, privilege and unexercised option (the "Stock Option") to purchase one hundred thousand (100,000) shares of the common stock, $.001 par value. The "Option Shares" are to be fully vested and become exercisable immediately. The exercise price of the Option Shares shall be twenty cents ($.20) per share. The option rights granted hereby shall be cumulative. Upon becoming exercisable, the option rights shall be exercisable at any time and from time to time, in whole or acquire in part; provided, however, that options may be exercised for no longer than five (5) years from the date of this Agreement. The options shall be exercised by written notice directed to Employer, accompanied by a share check payable to Employer for the Option shares being purchased. Employer shall make immediate delivery of Company Common Stock such purchased shares, fully paid and non-assessable, registered in the name of Executive. The certificates evidencing such shares shall bear the following restrictive legend, unless and until such shares have been registered in accordance with the Securities and Exchange Act of 1933, as amended (the "Act"): THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT"), OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF IN ANY MANNER UNLESS THEY ARE REGISTERED UNDER SUCH ACT AND THE SECURITIES LAWS OR ANY APPLICABLE JURISDICTIONS OR UNLESS PURSUANT TO ANY EXEMPTION THEREFROM. Employer shall use its best efforts to register the Option Shares under the Company Equity Plans (eachAct at the earlier of such time as it registers shares issuable pursuant to a qualified employee stock option plan or such time as it registers shares beneficially owned by or issued to either or all of the following individuals: If, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition the extent that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product common stock of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option Employer shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their termsincreased or reduced by whatever action, including pursuant but not limited to such preexisting terms and conditionschange of par value, providedsplit, howeverreclassification, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to distribution or a dividend payable in stock, or the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a)like, the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange the Stock Option and the exercise option price per share shall be proportionately adjusted. If Employer is reorganized or consolidated or merged with another corporation, Executive shall be entitled to receive options covering shares of such Parent Exchange Option shall be determined in a manner which would not result reorganized, consolidated, or merged company in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A same proportion, at an equivalent price, and subject to the same conditions. For purposes of the Codepreceding sentence, the excess of the aggregate fair market value of the shares subject to the option immediately after any such reorganization, consolidation, or merger over the aggregate option price of such shares shall not be more than the excess of the aggregate fair market value of all shares subject to the Stock Option immediately before such reorganization, consolidation, or merger over the aggregate option price of such shares, and the Company new option or assumption of the old Stock Option shall not give Executive additional benefits which he did not have under the old Stock Option, or deprive him of benefits which he had under the old Stock Option. Executive shall have no rights as a stockholder with respect to the Option Shares until exercise of the Stock Option and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant payment of stock optionsthe Option Price as herein provided.

Stock Options. At As of the Effective Time, (1) each outstanding unexpired and unexercised option to purchase or acquire a share Infinop Shares listed on Section 4(b) of Company Common Stock under the Company Equity Plans DISCLOSURE SCHEDULE (each, a “Company Stock Option”AN "INFINOP STOCK OPTION") shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option SHALL BE CONVERTED INTO AN OPTION (AN "ADJUSTED OPTION") to purchase the number of shares of Parent Common Stock Vianet Shares equal to the product number of (x) the Infinop Shares subject to such Infinop Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option Conversion Ratio (rounded down to the nearest whole sharenumber of Vianet Shares), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock Infinop Share subject to a Company Stock Option such option divided by the Stock Option Conversion FractionRatio, and all references in each SUCH OPTION TO INFINOP SHALL BE DEEMED TO REFER TO VIANET, WHERE APPROPRIATE; PROVIDED, HOWEVER, that the adjustments provided in this clause with respect to any options which are "incentive stock options" (as defined in Section 422 of the Code) or which are described in Section 423 of the Code, shall be affected in a manner consistent with the requirements of Section 424(a) of the Code, and (2) Vianet shall assume the obligations of Infinop under the Infinop Stock Options and the Infinop 1998 Stock Option Plan (the "INFINOP STOCK OPTION PLAN") and stock option agreements between Infinop and the individuals listed on Section 4(b)(b) of the Disclosure SCHEDULE (THE "INFINOP STOCK OPTION AGREEMENTS"). For purposes of this Section 2(d) (viii), the Conversion Ratio shall be adjusted if Adjustment Escrow Shares (as defined below) are delivered to Vianet as a result of a reduction in the Merger Consideration pursuant to Section 2(d)(x) such that the Conversion Ratio will equal the actual rate at which Infinop Shares are converted into Vianet Shares in the Merger after giving effect to the Company in each full dollar amount of such option shall be deemed to refer to Parent, where appropriatereduction. The other terms of such Company each Adjusted Option, and the Infinop Stock Options Option Plan and Infinop Stock Option Agreements shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent . The date of grant of each Adjusted Option shall treat each Company be the date on which the corresponding Infinop Stock Option as fully vested and exercisablewas granted. Each Company Vianet agrees that the Infinop Stock Option converted Plan shall be amended, to the extent necessary, to reflect the transactions contemplated by this Agreement, including, but not limited, to the conversion of Infinop Shares held or to be awarded or paid pursuant to the terms of this Section 2.4(a) shall be referred to as Infinop Stock Option Plan and the Infinop Stock Option Agreements into Vianet Shares on a “Parent Exchange Option.” In connection basis consistent with the issuance of Parent Exchange Options, Parent transactions contemplated by this Agreement. Vianet shall (x) reserve for issuance the number of shares of Parent Common Stock Vianet Shares that will become subject to Parent Exchange Options the Infinop Stock Option Plan and the Infinop Stock Option Agreements referred to in this clause and (y) issue or cause to be issued the appropriate number of Vianet Shares pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Infinop Stock Option Plan and the Infinop Stock Option Agreements upon the exercise or maturation of rights existing thereunder at the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. (a) At the Effective Time, the Target Stock Option Plans and each outstanding unexpired and unexercised option to purchase or acquire a share shares of Company Target Common Stock under the Company Equity Plans (each, a “Company Target Stock Option”) shall vest and become fully exercisableOption Plans, whether or not then vested or subject unvested, shall be assumed by Acquiror. Target has delivered to any performance condition that has not been satisfied. At Acquiror a schedule which is attached hereto as Schedule 5.16 (the Effective Time, each Company "Option Schedule") which sets forth a true and complete list as of the date hereof of all holders of outstanding options under the Target Stock Option shall be converted into an option to purchase Plans including the number of shares of Parent Target Capital Stock subject to each such option, the exercise or vesting schedule, the exercise price per share and the term of each such option. On the Closing Date, Target shall deliver to Acquiror an updated Option Schedule current as of such date. Each such option so assumed by Acquiror under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Target Stock Option Plans immediately prior to the Effective Time, except that (i) such option shall be exercisable for that number of whole shares of Acquiror Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Target Common Stock which could have been obtained that were issuable upon exercise of such option immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option (Common Exchange Ratio and rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Acquiror Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after Stock, and (ii) the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to per share exercise price for the shares of Parent Acquiror Common Stock subject issuable upon exercise of such assumed option shall be equal to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and quotient determined by dividing the exercise price per share of Target Common Stock at which such Parent option was exercisable immediately prior to the Effective Time by the Common Exchange Option shall be determined in a manner which would not result in Ratio, rounded up to the conversion nearest whole cent. It is the intention of Company Stock Options into Parent Exchange Options being treated the parties that the options so assumed by Acquiror qualify following the Effective Time as a new grant of incentive stock options under as defined in Section 409A 422 of the CodeCode to the extent such options qualified as incentive stock options prior to the Effective Time. Within five (5) business days after the Effective Time, Acquiror will issue to each person who, immediately prior to the Effective Time was a holder of an outstanding option under the Target Stock Option Plans a document in form and substance satisfactory to Target evidencing the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid foregoing assumption of such new grant of stock optionsoption by Acquiror.

Stock Options. At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “"Company Stock Option”") shall vest granted under the Company's Amended and become fully exercisableRestated 2000 Stock Incentive Plan or Amended and Restated 1992 Stock Option Plan (collectively, the "Company Stock Plans") other than options granted under Article III of either Company Stock Plan ("Director Options"), whether or not then vested or subject exercisable, shall be replaced by the Surviving Corporation with a comparable option to purchase DHI Common Stock (a "DHI Stock Option"), in accordance with the terms of the Company Stock Plan pursuant to which it was granted and any performance condition stock option agreement by which it is evidenced, except that has if the holder of such DHI Stock Option is involuntarily terminated as an employee of the Surviving Corporation or any subsidiary without Cause for Termination (and not been satisfied. At on account of death or disability) within six months after the Effective Time, each Time such Company Stock Option shall become exercisable and shall vest to the extent not theretofore exercisable or vested as of the date of termination of employment. It is intended that the foregoing provisions shall be converted into undertaken in a manner that will not constitute a "modification" as defined in Section 424 of the Code as to any stock option which is an option to purchase the "incentive stock option." Each DHI Stock Option shall be exercisable for that number of shares of Parent DHI Common Stock equal to the product number of (x) the Company Shares subject to the corresponding Company Stock Option multiplied by the Stock Option Conversion Fraction (Exchange Ratio, and shall have an exercise price per share equal to its exercise price per Company Share divided by the Stock Exchange Ratio. DHI and the Company shall take all such steps as defined in may be required to cause the transactions contemplated by this Section 2.4(a)2.1.6 and any other dispositions of equity securities of the Company or acquisitions of DHI equity securities in connection with this Agreement by each individual who (i) multiplied by is a director or officer of the Company, or (yii) at the number Effective Time, will become a director or officer of DHI, to be exempt under Rule 16b-3 of the Exchange Act. Director Options shall accelerate and become exercisable, and subsequently terminate, upon consummation of the Merger, each as provided in Article III.A of the Company Stock Plans. Holders of shares of Company Common Stock which could have been obtained prior to the Effective Time received upon the exercise of each Director Options shall not have the option to elect any form of Merger Consideration other than the Base Consideration, and such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms be a Non-Election Share and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred converted into a right to as a “Parent Exchange Optionreceive the Base Consideration.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. At (a) As soon as practicable following the date of this Agreement, the Board of Directors of Ascend (or, if appropriate, any committee administering the Ascend Stock Plans) shall adopt such resolutions or take such other actions as may be required to effect the following: (i) adjust the terms of all outstanding Ascend Stock Options granted under Ascend Stock Plans, whether vested or unvested, as necessary to provide that, at the Effective Time, each Ascend Stock Option outstanding unexpired and unexercised option immediately prior to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option Time shall be amended and converted into an option to purchase acquire, on the same terms and conditions as were applicable under such Ascend Stock Option (as modified by the terms of an agreement (referred to in Section 3.01(k) of the Ascend Disclosure Schedule) in effect on the date hereof between Ascend and the holder of such Ascend Stock Option as disclosed to Lucent prior to the date hereof), the same number of shares of Parent Lucent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share)) as the holder of such Ascend Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such Ascend Stock Option in full immediately prior to the Effective Time, at an exercise a price per share of Lucent Common Stock (rounded up to the nearest whole cent) equal to (A) the aggregate exercise price for each such share the shares of Company Ascend Common Stock subject otherwise purchasable pursuant to a Company such Ascend Stock Option divided by (B) the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the aggregate number of shares of Parent Lucent Common Stock that will become subject to Parent Exchange Options deemed purchasable pursuant to this such Ascend Stock Option (each, as so adjusted, an "Adjusted Option"); and (ii) make such other changes to the Ascend Stock Plans as Ascend and Lucent may agree are appropriate to give effect to the Merger, including as provided in Section 2.4(a)5.07. (b) As promptly soon as reasonably practicable after the Effective Time, Parent Lucent shall issue deliver to each the holders of Ascend Stock Options appropriate notices setting forth such holders' rights pursuant to the respective Ascend Stock Plans and the agreements evidencing the grants of such Ascend Stock Options and that such Ascend Stock Options and agreements shall be assumed by Lucent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 5.06 after giving effect to the Merger). (c) A holder of an outstanding Parent Exchange Adjusted Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (may exercise such Adjusted Option in whole or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in part in accordance with Section 2.1(d). The number its terms by delivering a properly executed notice of shares subject exercise to any Parent Exchange Option Lucent, together with the consideration therefor and the exercise price per share of such Parent Exchange Option shall be determined federal withholding tax information, if any, required in a manner which would not result in accordance with the conversion of Company related Ascend Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsPlan.

Stock Options. At (a) The Company shall take all reasonable actions necessary so that, immediately prior to the Effective Time, each outstanding unexpired and unexercised option (i) the options granted by the Company to purchase or acquire a share of Company Common Stock ("Company Stock Options"), which are outstanding and unexercised immediately prior to the Effective Time and held by a holder that has executed a notice, in form and substance satisfactory to Parent, consenting to the cancellation of the Company Stock Options held by such holder, shall be canceled, provided, that the Company and Parent will each use commercially reasonable efforts to obtain any necessary consents of holders of Company Stock Options and (ii) the outstanding Company Stock Options under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisablePlan, whether or not then vested or subject unvested, held by holders not employed by the Company immediately prior to any performance condition that has not been satisfied. At the Effective Time or by holders who, at the Effective Time, each Company Stock Option have not executed the consent described in (i) above shall be converted into assumed by Parent and shall constitute an option to purchase acquire, on the same terms and subject to the same conditions as were applicable under such Company Stock Option, the same number of shares of Parent Common Stock as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option (including any unvested portion thereof) in full (disregarding any limitation on exercisability thereof) immediately prior to the Effective Time (rounded downward to the nearest whole number), at a price per share (rounded upward to the nearest whole cent) equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of aggregate exercise price for the shares of Company Common Stock which could have been obtained purchasable pursuant to such Company Stock Option immediately prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a(z) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of full shares of Parent Common Stock deemed purchasable pursuant to such Company Stock Option in accordance with the foregoing. All outstanding rights that will become subject the Company may hold immediately prior to the Effective Time to repurchase unvested shares of Company Common Stock issued or issuable under the Company Stock Plan (the "Repurchase Options") shall be assigned to Parent Exchange Options pursuant and shall thereafter be exercisable by Parent upon the same terms and conditions in effect immediately prior to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing except that the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect shares purchasable pursuant to the shares of Parent Common Stock subject to Parent Exchange Repurchase Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise purchase price per share of such Parent Exchange Option shall be determined in a manner which would not result in adjusted to reflect the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsRatio.

Stock Options. At Each option to purchase shares of Fourth Shift Common Stock (a "Fourth Shift Option") outstanding immediately prior to the Effective Time shall remain outstanding following the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, AremisSoft shall assume each Company Stock Fourth Shift Option by virtue of the Merger and without any further action on the part of Fourth Shift or the holders thereof. AremisSoft shall assume each such option in such manner that AremisSoft (i) is a corporation "assuming a stock option in a transaction to which Section 424(a) applies" within the meaning of Section 424 of the Code or (ii) to the extent that Section 424 of the Code does not apply to any such Fourth Shift Option, would be such a corporation were Section 424 of the Code applicable to such Fourth Shift Option. From and after the Effective Time, all references to "Fourth Shift" in the Fourth Shift Options and the related stock option agreements shall be deemed to refer to "AremisSoft." After the Effective Time, each Fourth Shift Option assumed by AremisSoft shall be exercisable upon the same terms and conditions as were in effect under the Fourth Shift Options and the related option agreements immediately prior to the Effective Time, except that (i) each Fourth Shift Option shall be converted into an option to purchase the exercisable for that whole number of shares of Parent AremisSoft Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Fourth Shift Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts such Fourth Shift Option immediately prior to cause such registration statement to remain effective until the exercise or expiration of Effective Time divided by 6.14159, (ii) the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise option price per share of such Parent Exchange Option AremisSoft Common Stock shall be determined an amount equal to the option price per share of Fourth Shift Common stock subject to such Fourth Shift Option in a manner which would not result in effect immediately prior to the conversion of Company Stock Options into Parent Exchange Options Effective Time multiplied by 6.14159 (the option price per share, as so determined, being treated rounded upward to the nearest full cent), and (iii) any and all outstanding and unvested Fourth Shift Options, or any portion thereof, shall be accelerated and deemed fully vested as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsEffective Time." [THIS SPACE INTENTIONALLY LEFT BLANK]

Stock Options. At the Effective Time, each then outstanding unexpired and unexercised (a) option to purchase or acquire a share shares of Company Marquee Common Stock under granted by Marquee pursuant to Marquee's 1996 and 1997 Stock Option Plan (collectively, the Company Equity Plans "Stock Option Plans"), (eachb) option to purchase shares of Marquee Common Stock, a “Company Stock dated October 7, 1997, granted by Marquee to Xxxxxx F.X. Sillerman, (c) option to purchase Marquee Common Stock, dated October 14, 1997, granted by Marquee to Xxxx Xxxxxxxx, (d) option to purchase Marquee Common Stock, dated August 26, 1997 or September 11, 1997, granted by Marquee to The Xxxx Alternative Income Fund, L.P., (e) option to purchase Marquee Common Stock, dated September 11, 1997 granted by Marquee to TSC, and (f) unit purchase option (the "Unit Purchase Option”) shall vest and become fully exercisable"), whether or not then vested or subject dated December 11, 1996, granted by Marquee to any performance condition that has not been satisfied. At Royce Investment Group, Inc. (collectively, the "Options"), shall, as of the Effective Time, each Company Stock Option automatically and without any action on the part of the holder thereof, be assumed by SFX. The holders of such Options shall continue to have, and be subject to, the same terms and conditions set forth in the stock option plans and agreements pursuant to which such Options were issued as in effect immediately prior to the Effective Time, except that (i) such Options shall be converted into an option to purchase the exercisable for that number of whole shares of Parent SFX Class A Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Marquee Common Stock which could have been obtained covered by the Option immediately prior to the Effective Time multiplied by the Exchange Ratio rounded up to the nearest whole number of shares of SFX Class A Common Stock, and (ii) the per share exercise price for the shares of SFX Class A Common Stock issuable upon the exercise of each such Company assumed Option shall be equal to the quotient determined by dividing the exercise price per share of Marquee Common Stock specified for such Option (rounded under the applicable stock option plan or agreement in effect immediately prior to the Effective Time by the Exchange Ratio, rounding the resulting exercise price down to the nearest whole share)cent. At the Effective Time, at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent SFX shall reserve for issuance the number of shares of Parent SFX Class A Common Stock that will become subject to Parent Exchange issuable upon the exercise of the Options pursuant to this Section 2.4(a)2.04. As promptly as reasonably practicable after Nothing in this Section 2.04 shall affect the Effective Time, Parent shall issue to each holder schedule of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 vesting (or any successor or other appropriate form that Parent is eligible to usethe acceleration thereof) under the Securities Act on the Closing Date with respect to the Options to be assumed by SFX as provided in this Section 2.04. Notwithstanding anything to the contrary, nothing herein shall require SFX to issue fractional shares of Parent SFX Class A Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until upon the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsOption.

Stock Options. At As of the Effective TimeTermination Date, each outstanding unexpired and unexercised option you hold options (the “Options”) to purchase or acquire a share total of Company Common Stock under 342,000 ordinary shares of the Company Equity Plans (each, a “Company Stock OptionShares”) shall vest pursuant to (i) a Share Option Grant Notice by and become fully exercisablebetween you and the Company dated January 1, whether or not then vested or 2020 (the “First 2020 Option Award”) and (ii) a Non-Statutory Stock Option Agreement by and between you and the Company effective as of December 17, 2020 (the “Second 2020 Option Award” and together with the 2020 Option Award, the “Option Awards”), which Options are subject to any performance condition that has not been satisfiedthe Company’s 2019 Equity Incentive Plan (the “Equity Incentive Plan”). At the Effective TimeYou acknowledge and agree that, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained if prior to the Effective Time upon date hereof, you have not executed the exercise of each such Company Non-Statutory Stock Option (rounded down Agreement evidencing the Second 2020 Option Award, you shall do so concurrently with your execution of this Agreement. As of the Termination Date, the Options will be vested as to 228,000 Shares, which vested portion of the Options shall remain subject to the nearest whole share)applicable Option Award, at an exercise price per share the Equity Incentive Plan, and any other agreements or other requirements applicable to such Options. All Options which are unvested as of the Termination Date have been cancelled as of that date, and you agree to return, no later than the Effective Date of this Agreement, the stock option certificates for all Options granted you which were unvested on the Termination Date. The vested portion of the Options must be exercised not later than six (rounded up 6)-months following the Termination Date, and, to the nearest cent) equal extent not exercised during such period, shall immediately and automatically terminate on the six (6)-month anniversary of the Termination Date with no consideration due to you. If you choose to exercise all or any portion of the exercise price for each such share Options, you agree that, without limiting any other provisions in favor of the Company Common Stock contained in the Option Awards or the Plan, the Shares acquired thereunder shall be subject to a Company Stock Option divided Sections 9 and 10 of the Company’s Second Amended and Restated Shareholders Agreement, as the same may be further amended and restated from time to time, and you agree to execute all agreements requested by the Stock Option Conversion FractionCompany to effectuate the forgoing. You acknowledge and agree that, if any portion of the Options was granted as an incentive stock option under the U.S. Internal Revenue Code of 1986, as amended, as a result of the provisions of this Agreement, it shall cease to be so and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date have no liability with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsforegoing.

Stock Options. At the Effective Time, each outstanding unexpired and unexercised option You have been granted certain options to purchase or acquire a share shares of Company Common Stock under the Company’s common stock (collectively, the “Options”), pursuant to the Company’s applicable equity incentive plan(s), stock option agreement and other grant documents (collectively, the “Option Documents”). Under the terms of the Option Documents, vesting of the Options will cease as of the Separation Date; however, as an additional benefit to you, if you satisfy the Severance Preconditions, then: (i) the Company Equity Plans (each, a “Company Stock Option”) shall vest will modify and become fully exercisable, whether or not then vested or accelerate your vesting schedule to provide that all unvested shares subject to any performance condition that has not been satisfied. At the Effective Time, each Options will be deemed fully vested and exercisable as of the Separation Date; and (ii) the Company Stock Option shall be converted into an option will extend the period of time in which you are required to purchase the number of exercise vested shares of Parent Common Stock equal subject to the product Options until the date that is one (1) year after the termination of (x) the Stock Option Conversion Fraction your Continuous Service (as defined in this Section 2.4(athe Company’s applicable equity incentive plan(s)) multiplied by (ythe “Option Exercise Extension”). Except as expressly set forth in this paragraph, the Options remain subject to the terms of the Option Documents. You understand that you must affirmatively accept the Option Exercise Extension as described below. If you accept the Option Exercise Extension and the Option Exercise Extension becomes effective, to the extent applicable, such options will no longer qualify as incentive stock options (“ISOs”) and will instead be treated for tax purposes as nonqualified stock options (“NSOs”). As a result, you understand that you will lose certain advantageous tax treatment relating to ISOs and you must satisfy all applicable tax withholding obligations upon exercise of the Options. Your ability to accept the Option Exercise Extension in respect of any of your options will be open until the earliest of (i) March 10, 2023 (which, for the avoidance of doubt, is no greater than twenty-nine (29) calendar days from the date the Option Exercise Extension was first offered to you) and (ii) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock date your Options shall continue to apply expire or earlier terminate in accordance with their terms (11:59 p.m. Pacific Time on such date, the “Option Offer Expiration Time”). You acknowledge that failure to accept the Option Exercise Extension on or before the Option Offer Expiration Time only impacts your right to the Option Exercise Extension and not any other provision of this Agreement. To accept (or decline) the Option Exercise Extension, you must deliver a fully completed and signed Option Exercise Extension Election Form, attached hereto as Exhibit D to [redacted], on or prior to the Option Offer Expiration Time. If this Agreement is revoked or otherwise does not become effective in accordance with its terms, including pursuant then any acceptance of the Option Exercise Extension will be disregarded and will be of no force or effect. You acknowledge that if you fail to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock accept the Option as fully vested and exercisable. Each Company Stock Option converted pursuant Exercise Extension on or prior to the Option Offer Expiration Time, then the Option Exercise Extension will not apply to any of your Options and such Options will continue to be governed by their existing terms of this Section 2.4(a(including the three (3) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(amonth post-termination exercise period). As promptly The Company makes no representation or guarantees regarding the status of any of your Options as reasonably practicable after ISOs or otherwise. You acknowledge that the Effective Time, Parent shall issue Company is not providing tax advice to each holder of an outstanding Parent Exchange Option a document evidencing you and that you have been advised by the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible Company to use) under the Securities Act on the Closing Date seek independent tax advice with respect to the shares of Parent Common Stock subject to Parent Exchange Options exercise and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration modification of the Parent Exchange Options. For purposes of options and any other compensation and benefits that you are receiving under this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsAgreement.

Stock Options. (a) At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire Company Shares (a share of Company Common Stock under the Company Equity Plans (each, a “"Company Stock Option”") shall vest and become fully exercisablegranted under the Company's plans identified in the Schedule 1.4 as being the only compensation or benefit plans or agreements pursuant to which Company Shares may be issued (collectively, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each "Company Stock Option Plans"), whether vested or not vested, shall be converted into deemed assumed by Acquirer and shall thereafter be deemed to constitute an option to purchase acquire, on the number of shares of Parent Common Stock equal to the product of same terms and conditions (xincluding any provisions for acceleration) the as were applicable under such Company Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon (in accordance with the exercise past practice of each the Company with respect to interpretation and application of such Company Stock Option terms and conditions), the number (rounded down to the nearest whole share)number) of shares of Acquirer Common Stock determined by multiplying (x) the number of Company Shares subject to such Company Stock Option immediately prior to the Effective Time by (y) the Exchange Ratio, at an exercise a price per share of Acquirer Common Stock (rounded up to the nearest whole cent) equal to (A) the exercise price for each per Company Share otherwise purchasable pursuant to such share of Company Common Stock subject to a Company Stock Option divided by (B) the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriateExchange Ratio. The other terms parties intend that the conversion of such the Company Stock Options hereunder will meet the requirements of Section 424(a) of the Code and this Section 1.4(a) shall continue to apply in accordance be interpreted consistent with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisableintention. Each Company Stock Option converted pursuant Subject to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Company Stock Options and the documents governing such Company Stock Options, Parent shall reserve for issuance the number Merger will not terminate or accelerate any Company Stock Option or any right of shares of Parent exercise, vesting or repurchase relating thereto with respect to Acquirer Common Stock that acquired upon exercise of such assumed Company Stock Option. Holders of Company Stock Options will become subject not be entitled to Parent Exchange Options pursuant acquire Company Shares after the Merger. In addition, prior to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall the Company will make any amendments to the terms of such stock option or compensation plans or arrangements that are necessary to give effect to the transactions contemplated by this Section 1.4. Promptly following the Effective Time, Acquirer will issue to each holder of an outstanding Parent Exchange Company Stock Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Company Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsby Acquirer.

Stock Options. At Immediately following the Effective Time, each outstanding unexpired and unexercised option expiration of the ------------- rescission period described in said Paragraph 23 all vested stock options granted to purchase or acquire a share of Company Common Stock Xxxxx through the Separation Date under the Company Equity Plans Omnibus Plan and two-thirds of the stock Options granted to Xxxxx in 2001 shall remain outstanding and exercisable by him through the earlier of their original maturity date and three (each, a “Company Stock Option”3) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At years from the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, Separation Date; provided, however, that Parent the date any such option is first exercisable shall treat each Company Stock Option not be accelerated. Attached as fully Schedule C to this Agreement is a listing of such vested stock options, whether incentive or non-qualified stock options, and exercisable. Each Company Stock Option converted pursuant to the dates of first exercisability and lapse thereof in accordance with the terms of this Section 2.4(aparagraph c. To the extent options designated as incentive stock options are exercised within thirty (30) days of the last day of Xxxxx'x employment, they shall retain their status as qualified options, to the extent otherwise qualifying as incentive stock options; options exercised after this thirty (30) day period shall be referred to treated as a “Parent Exchange Option.” nonqualified options. In connection with the issuance of Parent Exchange Options, Parent event Xxxxx shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options sell any Pentair common stock acquired pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder exercise of an outstanding Parent Exchange Option incentive stock option in a document evidencing the foregoing assumption by Parent. Parent disqualifying disposition, Xxxxx shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date immediately notify Pentair of such disposition and supply all information with respect to such sale as is reasonably requested by Pentair. This notification obligation shall apply regardless of whether such options were exercised before or after the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange OptionsSeparation Date. For purposes of this Section 2.4(a)subparagraph, the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number any disposition of shares subject to any Parent Exchange Option and the Pentair common stock received upon exercise price per share of an incentive stock option, within twelve (12) months of such Parent Exchange Option exercise, shall be determined in constitute a manner which would disqualifying disposition. In the event Xxxxx should die before all such options have been exercised or otherwise lapse, then the beneficiary designated by Xxxxx shall have six (6) months from Xxxxx'x death to exercise any options then outstanding. Any options not result in so exercised shall lapse at the conversion end of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(asaid six (6) necessary to avoid such new grant of stock optionsmonth period.

Stock Options. At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share All options which may be exercised for issuance of Company Common Stock under the Company Equity Plans (whether or not vested) (each, a “Stock Option” and collectively the “Stock Options”) are described in the Company Disclosure Schedule and are issued and outstanding pursuant to the Company’s 1999 Stock Option Plan (the “Company Stock OptionOption Plan”) and the agreements pursuant to which such Stock Options were granted (each, an “Option Grant Agreement”). True and complete copies of the Company Stock Option Plans and all Option Grant Agreements relating to outstanding Stock Options have been delivered to Parent. Within ten days from the date hereof, the Company Stock Option Plans shall be amended, and the Board of Directors shall take all other actions necessary, such that all Stock Options which are outstanding immediately prior to the Effective Time (“Old Stock Options”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At automatically be converted as of the Effective TimeTime into options to Parent Common Stock (“New Stock Options”), each Company which New Stock Option Options shall be converted into an option identical to purchase the Old Stock Options in all material respects, except that (i) upon exercise of the New Stock Options, the optionholder will receive Parent Common Stock rather than Company Common Stock, (ii) the number of shares of Parent Common Stock equal to the product of (x) the covered by each New Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) shall equal the number of shares of Company Common Stock which could have been obtained prior to covered by the Effective Time upon the exercise of each such Company corresponding Old Stock Option multiplied by the Exchange Ratio, (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest centiii) equal to the exercise price for of each such share of Company Common New Stock subject Option shall equal the exercise price applicable to a Company the corresponding Old Stock Option divided by the Exchange Ratio and (iv) the committee that administers the plan by which such New Stock Option Conversion Fraction, and all references to the Company in each such option Options are governed shall be deemed to refer to Parenta committee established by the Board of Directors of Lakeland. In all other material respects, where appropriate. The other terms of such Company the New Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting be governed by the terms and conditions, provided, however, that Parent shall treat each of the Company Stock Option as fully vested Plan at and exercisableafter the Effective Time. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable Promptly after the Effective Time, Parent shall issue use its reasonable best efforts to each holder register the shares issuable upon exercise of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) New Stock Options under the Securities Act on the Closing Date with respect of 1933, and to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause keep such registration statement to remain effective in effect until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company time as all New Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionshave been exercised.

Stock Options. At the Effective Time, each the Company Stock Options, whether vested or unvested, will be assumed by PCA ("ASSUMED STOCK OPTIONS"). Section 2.2 of the Company Disclosure Schedule (as defined in Article III) sets forth a true and complete list as of the date hereof of all holders of outstanding unexpired and unexercised option options to purchase or acquire a share shares of Company Common Stock under the Company Equity Plans (each"COMPANY STOCK OPTIONS"), a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) including the number of shares of Company Common Stock which could have been obtained subject to each such option, the exercise or vesting schedule, the exercise price per share and the term of each such option. On the Closing Date, the Company shall deliver to PCA an updated Section 2.2 of the Company Disclosure Schedule (as defined in Article III) current as of such date. Each such option so assumed by PCA under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan ("COMPANY OPTION PLAN") and any other document governing such option immediately prior to the Effective Time upon the exercise Time, except that (a) such option will be exercisable for that number of each such Company whole shares of PCA Common Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share one and one-half (1.5) times that number of shares of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each that were issuable upon exercise of such option shall be deemed immediately prior to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing (b) the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to per share exercise price for the shares of Parent PCA Common Stock subject issuable upon exercise of such assumed option will be equal to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of Company Common Stock at which such Parent option was exercisable immediately prior to the Effective Time divided by the Exchange Ratio and rounded up to the nearest whole cent (the "ADJUSTED EXERCISE PRICE") and (c) any restriction on the exercisability of such Company Stock Option shall continue in full force and effect, and the term, exercisability, vesting schedule and other provisions of such Company Stock Option shall remain unchanged. If the foregoing calculation of the Adjusted Exercise Price results in an Assumed Stock Option being exercised for a fraction of a share of PCA Common Stock, then the number of shares of PCA Common Stock subject to that option will be determined in a manner which would not result rounded to the nearest whole number of shares of PCA Common Stock (rounded down, in the conversion case of the Company Stock Options into Parent Exchange that are Incentive Stock Options being treated as a new grant of stock options under Section 409A 422 of the Code). Continuous employment with the Company shall be credited to an optionee of the Company for purposes of vesting of the Assumed Stock Option. Consistent with the terms of the Company Option Plan and the documents governing the outstanding options, the Merger will not terminate any of the outstanding options under the Company Option Plan or accelerate the exercisability or vesting of such options or the shares of PCA Common Stock which will be subject to those options upon PCA's assumption of the options in the Merger. It is the intention of the parties that the options so assumed by PCA following the Effective Time will remain incentive stock options as defined in Section 422 of the Code to the extent such options qualified as incentive stock options prior to the Effective Time, and the parties hereto shall use their commercially reasonable efforts to carry out such intention. Within ten (10) business days after the Effective Time, PCA will issue to each person who, immediately prior to the Effective Time was a holder of an outstanding option under the Company Option Plan, a document in form and Parent shall agree upon any adjustments substance reasonably satisfactory to this Section 2.4(a) necessary to avoid the Company evidencing the foregoing assumption of such new grant of stock optionsoption by PCA.

Stock Options. At (a) Effective as of the date hereof, each outstanding option to purchase Shares (individually a “Director Option” and collectively “Director Options”) granted under the Medialink Worldwide Incorporated Amended and Restated 1996 Directors Stock Option Plan (the “Director Option Plan”) and each outstanding option to purchase Shares (individually an “Employee Option” and collectively “Employee Options”) granted under the Medialink Worldwide Incorporated Amended and Restated Stock Option Plan as adopted as of January 31, 1996 (the “Employee Option Plan”), whether or not any such Director Options or Employee Options are then exercisable (Director Options and Employee Options being sometimes hereinafter referred to individually as an “Option” and collectively as “Options”), shall be exercisable in full at the price per Share as established for each such Option. Thereafter, effective immediately prior to the Effective Time, each outstanding unexpired and unexercised option Option to purchase or acquire a share of Company Common Stock under any Share shall be converted by the Company Equity Plans into the right to receive from the Company, on the Closing Date, in consideration for any such Option, an amount in cash equal to the product of: (each, a “Company Stock Option”i) shall vest and become fully exercisable, whether or not then vested or the number of Shares subject to such Option (other than any performance condition that portion of such Option which has not previously been satisfiedexercised); and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share in effect with respect to such Option, reduced by the amount of withholding or other Taxes required by law to be withheld with respect to such payment. At Any Option (including tandem stock appreciation rights, if any, granted in connection with such Option) which, as of the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock has not been exercised and which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at provides an exercise price per share (rounded up to for the nearest cent) equal to purchase of a Share which is greater than the exercise price amount of the Merger Consideration payable for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion FractionShare, and all references to the Company in each such option shall be deemed to refer to Parentshall, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after at the Effective Time, Parent be cancelled without consideration and the holders of any such Options (including any tandem stock appreciation rights granted in connection with any such Options) shall issue have no further rights whatsoever under the terms of any such Options. On the Closing Date, the Surviving Corporation will make the payments required to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption be made by Parentthis Section 1.5(a). Parent shall file a registration statement on Form S-8 (and Merger Sub will deposit or any successor or other appropriate form that Parent is eligible cause to use) under be deposited sufficient funds with the Securities Act on Company at the Closing Date with respect to make the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of payments required by this Section 2.4(a1.5(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. At Prior to the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and Cxxxx shall use its commercially reasonable efforts to cause provide that each option to purchase Cxxxx Shares granted under Cxxxx’x 1997 Employee, Director and Consultant Stock Option Plan and its 2005 Stock Plan (in each case, a “Cxxxx Option”) outstanding at the Effective Time which is vested (in each case, a “Vested Cxxxx Option”) shall entitle each holder thereof to receive a payment in cash from the Surviving Corporation, upon the Effective Time, equal to the product of (i) the number of Cxxxx Shares previously subject to such registration statement to remain effective until Vested Cxxxx Option and (ii) the excess, if any, of the Merger Consideration over the exercise or price per Cxxxx Share previously subject to such Vested Cxxxx Option. All applicable withholding taxes attributable to the payments made hereunder shall be deducted from the amounts payable hereunder; provided, however, that with respect to any person subject to Section 16 of the Exchange Act, any such amount shall be paid as soon as practicable after the first date payment can be made without liability to such person under Section 16(b) of the Exchange Act. Cxxxx shall, upon the request of any holder of Vested Cxxxx Options, permit such holder to execute and deliver to Cxxxx, prior to the expiration of the Parent Exchange OptionsOffer, an agreement substantially in the form of Annex B (an “Option Election”) under which such holder would agree, contingent upon the purchase of Cxxxx Shares by Acquisition Subsidiary pursuant to the Offer, to cause, immediately prior to the expiration of the Offer, such Vested Cxxxx Options to be exercised and the Cxxxx Shares issued as a result of that exercise to be tendered in the Offer. For purposes Cxxxx and Acquisition Subsidiary shall reflect on their books and records the transactions effected pursuant to the Option Elections. At the Effective Time, (A) each Cxxxx Option (whether vested or not) outstanding immediately prior to the Effective Time with an exercise price per share that is less than the applicable Merger Consideration for the class of this Section 2.4(a)Cxxxx Shares into which such Cxxxx Option is exercisable shall be cancelled by Cxxxx in exchange for the right to receive, without interest, a cash amount equal to the “Stock Option Conversion Fraction” shall mean product of (1) the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number excess, if any, of shares subject to any Parent Exchange Option and (x) such Merger Consideration, over (y) the exercise price per share of such Parent Exchange Cxxxx Option multiplied by (2) the total number of Cxxxx Shares subject to such Cxxxx Option (such product, as applied to Cxxxx Options referred to as “Option Consideration”); (B) each Cxxxx Option (whether vested or not) outstanding as of the Effective Time with an exercise price per share that is equal to or greater than the applicable Merger Consideration for the class of Cxxxx Shares into which such Cxxxx Option is exercisable shall be determined in terminated, without any consideration therefor; and (C) the Board of Directors of Cxxxx shall take any actions necessary to effect the transactions anticipated by this Section 2.5(e) under its 1997 Employee, Director and Consultant Stock Option Plan and its 2005 Stock Plan and all Cxxxx Option agreements and any other plan or arrangement of Cxxxx (whether written or oral, formal or informal). As soon as practicable following the date hereof, Cxxxx shall deliver or cause to be delivered to each holder of a manner which would not result in Cxxxx Option any certifications, notices or other communications required by the conversion terms of Company Stock Options such Cxxxx Option or any agreement entered into Parent Exchange Options being treated as a new grant of stock options under Section 409A of with respect thereto to be delivered to such holder prior to the Code, Effective Time and the Company and Parent shall agree upon any adjustments to other transactions contemplated by this Section 2.4(a) necessary to avoid such new grant of stock optionsAgreement.

Stock Options. At Subject to all approvals required by law, the Company will grant You, pursuant to an equity incentive plan or such other plan to be adopted by the Company (the "Plan") and upon such terms and conditions as determined by the Compensation Committee or the Board (as applicable) which are not inconsistent with the terms set forth herein , stock options (the "Options"). Upon approval by the Board, You shall be awarded an Option of sixty thousand (60,000) shares of common stock that shall vest immediately upon the grant (the "Initial Grant"). The price of these shares shall be the Company's closing stock price listed on the OTC Pink Sheets on the date immediately preceding the date of grant. For a period of two calendar years from the date of Your appointment You shall be awarded an additional forty thousand (40,000) share options of common stock on each 12 month anniversary of the Effective TimeDate. The exercise price of these options will be the price of the shares on the OTC Pink Sheets or Nasdaq, whichever is applicable, the day before each outstanding unexpired successive grant of options and unexercised option such options shall be fully vested on the date of grant. Any subsequent annual award will be capped at thirty thousand shares per award and also will be fully vested on grant. As a one-time transaction bonus , You shall be awarded an Option for sixty thousand (60,000) shares of common stock. These options will be granted to purchase or acquire a share You upon the successful listing of Company Common Stock under the Company Equity Plans (eachon Nasdaq and will be fully vested on grant. The exercise price of these transaction bonus options will be price of the shares on the OTC Pink Sheets or Nasdaq, a “Company Stock Option”) shall vest and become fully exercisablewhichever is applicable, whether or not then vested or subject to any performance condition that has not been satisfiedthe day before the date of grant. At Except as provided in the Effective Time, each Company Stock Option shall be converted into an option to purchase the number last sentence of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share)paragraph, at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to time that You are no longer engaged with the Company in each any capacity, all granted Options that have not been exercised, shall terminate unless exercised within three (3) months of Your termination date (the "Termination Exercise Period"); provided that no such option three (3) month limitation shall be deemed to refer to Parentapply if Your engagement is terminated by the Company without Cause or by You for Good Reason. If You quit Your position as Chairman of the Company without Good Reason within twelve (12) months from the Effective Date, where appropriate. The other terms the right, title and interest in the Initial Grant of such Company Stock Options sixty thousand (60,000) options that You received upon entry into this Agreement shall continue to apply in accordance with their termsterminate immediately, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance result that You will have forfeited Your right, title and interest in all of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock these options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. (a) At the Effective Time, each outstanding unexpired and unexercised option or other right to purchase or acquire a share shares of Company Target Common Stock pursuant to stock options ("Target Options") granted by Target under the Company Equity Plans (eachTarget Stock Plans, a “Company Stock Option”) shall vest and become fully exercisablewhich are outstanding at the Effective Time, whether or not then vested or subject exercisable, shall be converted into and become rights with respect to any performance condition Buyer Common Stock, and Buyer shall assume each Target Option, in accordance with the terms of the Target Stock Plan and stock option agreement by which it is evidenced, except that has not been satisfied. At from and after the Effective Time, each Company Stock Option (i) Buyer and its Compensation Committee shall be converted into an option to purchase substituted for Target and the number Committee of Target's Board of Directors (including, if applicable, the entire Board of Directors of Target) administering such Target Stock Plan, (ii) each Target Option assumed by Buyer may be exercised solely for shares of Parent Buyer Common Stock equal to the product of Stock, (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (yiii) the number of shares of Company Buyer Common Stock which could have been obtained subject to such Target Option shall be equal to the number of shares of Target Common Stock subject to such Target Option immediately prior to the Effective Time upon multiplied by the Exchange Ratio (as the same may have been adjusted in accordance with Section 3.2) and (iv) the per share exercise of price under each such Company Stock Target Option (rounded down to shall be adjusted by dividing the nearest whole share), at an per share exercise price per share under each such Target Option by the Exchange Ratio (rounded as the same may have been adjusted in accordance with Section 3.2) and rounding up to the nearest cent. In addition, notwithstanding the provisions of clauses (iii) equal to and (iv) of the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms first sentence of this Section 2.4(a3.5, with respect to each Target Option which is an "incentive stock option" Buyer shall take no action that would constitute a modification, extension, or renewal of the option, within the meaning of Section 424(h) shall be referred to of the Internal Revenue Code. (b) As soon as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent Buyer shall issue deliver to the participants in each holder Target Stock Plan an appropriate notice setting forth such participant's rights pursuant thereto and the grants pursuant to such Target Stock Plan shall continue in effect on the same terms and conditions (subject to the adjustments required by Section 3.5(a) after giving effect to the Merger), and Buyer shall comply with the terms of an outstanding Parent Exchange Option a document evidencing each Target Stock Plan to ensure, to the foregoing assumption extent required by, and subject to the provisions of, such Target Stock Plan, that Target Options which qualified as incentive stock options prior to the Effective Time continue to qualify as incentive stock options after the Effective Time. At or prior to the Effective Time, Buyer shall take all corporate action necessary to reserve for issuance sufficient shares of Buyer Common Stock for delivery upon exercise of Target Options assumed by Parentit in accordance with this Section 3.5. Parent As soon as practicable after the Effective Time, Buyer shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date form), with respect to the shares of Parent Buyer Common Stock subject to Parent Exchange Options such options and shall use its commercially reasonable efforts to cause maintain the effectiveness of such registration statement to remain effective until statements (and maintain the exercise or expiration current status of the Parent Exchange Optionsprospectus or prospectuses with respect thereto) for so long as such options remain outstanding. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.ARTICLE 4

Stock Options. At As of the Effective Time, each close of business on the Reference Date: (i) 4,574,487 Verigy Ordinary Shares were subject to issuance pursuant to outstanding unexpired and unexercised option Verigy Options (as defined below) to purchase or acquire a share of Company Common Stock Verigy Ordinary Shares under the Company Equity applicable Verigy Share Plans (eachas defined below) (equity or other equity-based awards, a “Company Stock Option”) shall vest and become fully exercisablewhether payable in cash, shares or otherwise, whether or not then vested granted under or subject pursuant to the Verigy Share Plans, other than Verigy Restricted Shares or Verigy Restricted Share Units, are referred to in this Agreement as “Verigy Options”), and (ii) 4,890,409 Verigy Ordinary Shares are reserved for future issuance under the Verigy Share Plans, including 1,145,399 shares reserved for issuance under Verigy’s 2006 Employee Shares Purchase Plan. Section 2.4(c) of the Verigy Disclosure Schedule sets forth a complete and accurate list of all stock option plans or any other plan or agreement adopted by Verigy that provides for the issuance of equity to any performance condition that Person (the “Verigy Share Plans”). Verigy has not been satisfiedmade available to LTX-Credence complete and accurate copies of all Verigy Share Plans and the forms of all award agreements evidencing outstanding awards under such plans. At Verigy has made available to LTX-Credence a true and complete list of each Verigy Option outstanding as of the Effective TimeReference Date, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of and (x1) the Stock particular Verigy Share Plan or other arrangement pursuant to which such Verigy Option Conversion Fraction was granted, (as defined in this Section 2.4(a)2) multiplied by the name of the holder of such Verigy Option, (y3) the number of shares of Company Common Stock which could have been obtained prior Verigy Ordinary Shares subject to the Effective Time upon the exercise of each such Company Stock Option Verigy Option, (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent4) equal to the exercise price for each of such share Verigy Option, (5) the date on which such Verigy Option was granted, (6) the applicable vesting schedule, and the extent to which such Verigy Option was vested and exercisable as of Company Common Stock the Reference Date, (7) the date on which such Verigy Option expires and (8) whether such Verigy Option is intended to qualify as a nonstatutory stock option or an “incentive stock option” within the meaning of Section 422 of the Code. All Verigy Ordinary Shares subject to a Company Stock Option divided issuance under the applicable Verigy Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, would be duly authorized, validly issued and fully paid. All grants of Verigy Options were validly issued and properly approved by the Stock Option Conversion Fraction, Board of Directors of Verigy (or a duly authorized committee or subcommittee thereof) in material compliance with all applicable Legal Requirements and all references to recorded on the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply Verigy Financials in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a)GAAP. As promptly as reasonably practicable after of the Effective TimeReference Date, Parent shall issue to each holder of an there are no outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor authorized stock appreciation, phantom stock, profit participation or other appropriate form that Parent is eligible to usesimilar rights or equity based awards (whether payable in cash, shares or otherwise) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options Verigy other than as set forth in Sections 3.2(b) and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a(c), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. At On the Effective TimeDate, each then outstanding unexpired and unexercised stock option to purchase or acquire a share of Company Primary Bank Common Stock under ("Primary Bank Stock Options") pursuant to the Company Equity Plans employee and director stock option plans identified in Primary Bank Disclosure Schedules to the Reorganization Agreement (eachcollectively, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company "Primary Bank Stock Option shall be converted into an option to purchase Plans") (it being understood that the aggregate number of shares of Parent Primary Bank Common Stock subject to purchase pursuant to the exercise of such Primary Bank Stock Options is not and shall not be more than 355,523), whether vested or unvested, will be assumed by Granite State. Each Primary Bank Stock Option so assumed by Granite State under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Primary Bank Stock Option Plans immediately prior to the Effective Date, except that (i) such Primary Bank Stock Options shall be exercisable (when vested) for that number of whole shares of Granite State Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Primary Bank Common Stock which could have been obtained prior covered by the Primary Bank Stock Option multiplied by the Exchange Ratio, provided that any fractional share of Granite State Common Stock resulting from such multiplication shall be rounded up to the Effective Time upon nearest share; (ii) the exercise price per share of each Granite State Common Stock shall be equal to the exercise price per share of Primary Bank Common Stock of such Company Primary Bank Stock Option (Option, divided by the Exchange Ratio, provided that such exercise price shall be rounded down to the nearest whole share)cent; and (iii) that the holder of all Primary Bank Stock Options whose employment or affiliation is terminated as a result of the Merger (except termination of employment for cause) shall have two years from the Closing Date to exercise the Primary Bank Stock Options. It is the intention of the parties that the Primary Bank Options assumed by Granite State qualify following the Effective Date as incentive stock options as defined in Section 422 of the Internal Revenue Code of 1986, at an exercise price per share (rounded up as amended to the nearest cent) equal extent that the Primary Bank Options qualified as incentive stock options immediately prior to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by Effective Date. Promptly following the Stock Option Conversion FractionEffective Date, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent Granite State shall reserve for issuance the such number of shares of Parent Granite State Common Stock that will become subject as shall be necessary to Parent Exchange Options be issued pursuant to the exercise of the options assumed by Granite State pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective TimeArticle 6, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent and Granite State shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to register the shares of Parent Granite State Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment issuable in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsconnection therewith.

Stock Options. At The Company represents to the Effective TimePurchaser that (a) all outstanding options that, each outstanding unexpired and unexercised option to purchase or acquire a share as of the Signing Date, may be exercised for shares of Company Common Stock under the Company Equity Plans (whether or not vested) (each, a “Stock Option” and collectively the “Stock Options”) are described in Schedule 4.5 and are presently governed by the Company Stock OptionCompensation Plans and the agreements pursuant to which such Stock Options were granted (each, an “Option Grant Agreement”), (b) the Stock Options presently governed by the Company Stock Compensation Plans represent the right to purchase Class C Stock and no other Equity Interests and (c) true and complete copies of the Company Stock Compensation Plans and each Option Grant Agreement relating to outstanding Stock Options have been delivered to the Purchaser. Prior to the Closing, the board of directors of the Company shall take all actions necessary such that all Stock Options that are outstanding immediately prior to the Closing (“Subject Stock Options”) (i) are fully vested in advance of the Closing in accordance with the terms of the Company Stock Compensation Plans and (ii) shall vest be forfeited prior to the Closing or, in the case of Subject Stock Options that are In-the Money Subject Stock Options, if the holders thereof execute and become fully exercisabledeliver prior to the Closing an option cancellation agreement in form and substance reasonably acceptable to the Purchaser (each, whether or not then vested or an “Option Cancellation Agreement”), cancelled in exchange for the issuance by the Purchaser at the Closing, subject to any performance condition that has not been satisfied. At the Effective TimePurchaser’s receipt of such holder’s Option Cancellation Agreement and cancelled Subject Stock Option, each Company Stock Option shall be converted into an option to purchase the such number of shares of Parent Purchaser Common Stock equal to the product quotient of the (x) the Option Cancellation Amount for such Subject Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied divided by (y) the number Share Price. Notwithstanding the foregoing, the Purchaser may elect, in its sole and absolute discretion, to satisfy the aggregate Option Cancellation Amount due to the holders of In-the Money Subject Stock Options at Closing in cash (in lieu of Purchaser Shares), and, to the extent the Purchaser so elects to make such payment in cash at Closing, such holders shall not be entitled to receipt of any shares of Company Purchaser Common Stock which could have been obtained prior Stock; provided, however that in the event the Purchaser Control Transaction results in Sellers receiving consideration that is not all cash, then Purchaser shall be required to satisfy the aggregate Option Cancellation Amount due to the Effective Time upon holders of In-the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Money Subject Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms cash (in lieu of this Section 2.4(aany securities) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Optionsat Closing. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.Agreement:

Stock Options. At The Company represents to Parent that (i) all outstanding options that, as of the Effective Timedate hereof, each outstanding unexpired and unexercised option to purchase or acquire a share may be exercised for shares of Company Common Stock under the Company Equity Plans (whether or not vested) (each, a “Stock Option” and collectively the “Stock Options”) are described in Section 3.2(a) of the Company Disclosure Schedule and are presently governed by plans referenced in Section 3.2(a) of the Company Disclosure Schedule (collectively, the “Company Stock OptionCompensation Plans”) and the agreements pursuant to which such Stock Options were granted (each, an “Option Grant Agreement”), (ii) the Stock Options presently governed by the Company Stock Compensation Plans represent the right to purchase Company Common Stock and not the capital stock of any Subsidiary of the Company and (iii) true and complete copies of the Company Stock Compensation Plans and each Option Grant Agreement relating to outstanding Stock Options have been delivered to Parent. Prior to the Closing, the Company’s Board of Directors shall vest take all actions necessary such that all Stock Options that are outstanding immediately prior to the Effective Time (“Old Stock Options”) (i) are fully vested in advance of the Effective Time in accordance with the terms of the Company Stock Compensation Plans and become fully exercisable(ii) shall be forfeited (if not exercised) prior to the Effective Time or, whether or not then vested or subject in the case of Old Stock Options that are In-the Money Old Stock Options, if the holders thereof execute and deliver prior to the Effective Time an option cancellation agreement in form and substance reasonably satisfactory to Parent, cancelled in exchange for a payment to be made by Parent to any performance condition that has not been satisfiedsuch holder promptly after the later of the Effective Time and Parent’s receipt of such holder’s option cancellation agreement and cancelled Old Stock Option, such payment to be in an amount equal to the Option Cancellation Amount. At For purposes of this Agreement, (I) the term “Option Cancellation Amount” shall mean, for an Old Stock Option covering a specified number of shares of Company Common Stock outstanding immediately prior to the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock amount equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained covered by such Old Stock Option immediately prior to the Effective Time upon multiplied by (y) the amount, if any, by which (A) the product of the Closing Date Price multiplied by the Exchange Ratio exceeds (B) the exercise price of each such Company Old Stock Option (rounded down subject to equitable adjustment in the nearest whole shareevent of a reclassification, recapitalization, split-up, combination, exchange of shares or readjustment, or a stock dividend affecting the Company Common Stock), at an exercise price per share (rounded up to II) the nearest centterm “In the Money Old Stock Options” means Old Stock Options for which (M) equal to the product of the Closing Date Price multiplied by the Exchange Ratio exceeds (N) the exercise price for each of such share Old Stock Option (subject to equitable adjustment in the event of a reclassification, recapitalization, split-up, combination, exchange of shares or readjustment, or a stock dividend affecting the Company Common Stock), (III) the term “Out of the Money Old Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and Options” means all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Old Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms that are not In the Money Old Stock Options and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to (IV) the terms of this Section 2.4(a) shall be referred to as a term “Parent Exchange Option.Closing Date Price” In connection with means the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares closing sale price of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after reported on the NASDAQ Global Select Market (as reported in an authoritative source chosen by Parent) on the date on which the Effective TimeTime occurs, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement or if no such closing sale price is reported on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act such date, on the Closing Date with respect next day on which such closing sale price is reported. For the avoidance of doubt, Old Stock Options that are both Out of the Money Old Stock Options and unexercised prior to the shares of Parent Common Stock subject to Parent Exchange Options and Effective Time shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration be forfeited as of the Parent Exchange Options. For purposes of this Section 2.4(a)Effective Time without payment, the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number the terms of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsCompensation Plans.

Stock Options. At In the Effective Timeevent of a Change in Control, each outstanding unexpired Executive's resignation for Good Reason or Executive's termination without Cause, all unvested stock options previously granted to Executive shall immediately vest and be exercisable as set forth below. In the event that there is a termination of Executive's employment hereunder for any reason, Executive shall be entitled to exercise any and all stock options that were previously granted to him by the Company, and are outstanding, vested and unexercised as of his Termination Date, during the exercise period ending on the shorter of (i) two (2) years from his Termination Date or (ii) the expiration date of the stock option as specified in the stock option plan or stock option agreement, as applicable, notwithstanding any provision in such plan or agreement that provides for a more limited time period to purchase exercise stock options following termination of employment; provided however, if said stock option plan or acquire stock option agreement provides therein for a share longer period of Company Common Stock under time to exercise such outstanding, vested and unexercised stock options following his Termination Date, then such stock option plan or agreement shall control and the remaining provisions of this Section 6(c) shall be inapplicable and without further force or effect. In the event that there is a termination of Executive's employment hereunder for Cause or Executive voluntarily resigns without Good Reason within two years for the date of this Agreement, Executive shall forfeit any and all stock options that were previously granted to him by the Company, and are unvested and unexercised as of his Termination Date. During the extension period specified in the previous paragraph, if applicable, the Executive shall be considered an employee of the Company Equity Plans (each, a “Company Stock Option”) who shall vest and become fully exercisable, whether or not then vested or subject make himself available to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references provide consulting services to the Company in each consideration for such extension of the option shall exercise period and any post-termination payments provided to Executive under Section 6(a) or (b) of this Agreement. In this regard, Executive agrees to be deemed classified as an employee of the Company solely for the limited purpose of making himself available to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provide consulting services on an as-needed basis; provided, however, that Parent shall treat each Company Stock Option Executive hereby specifically waives any right, entitlement, claim or demand to (i) any additional compensation for such consulting services and (ii) coverage or benefits under any of the Company's employee benefit plans or programs, or other perquisites, terms and conditions of employment, except as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms expressly specified in other provisions of this Section 2.4(a) shall be referred to Agreement. Except as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to expressly provided in this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a6(c), the “Stock Option Conversion Fraction” provision of consulting services by Executive shall mean the Exchange Ratio subject not expand his rights or duties under this Agreement. Executive hereby agrees to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A provide, upon request of the CodeCompany, and consulting services to the Company on the following terms and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.conditions:

Stock Options. (a) At the Effective Time, each WFB Stock Option which is outstanding unexpired and unexercised option immediately prior to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisableEffective Time, whether or not then vested or subject and exercisable, shall cease to any performance condition that has not been satisfied. At the Effective Time, each Company represent a right to acquire shares of WFB Common Stock Option and shall be converted automatically into an option to purchase the number of shares of Parent HNC Common Stock, and HNC shall assume each WFB Stock equal to Option, in accordance with the product terms of the applicable WFB Stock Plan and stock option or other agreement by which it is evidenced, except that from and after the Effective Time, (xi) HNC and a disinterested committee of the HNC board of directors shall be substituted for WFB and the committee of the WFB board of directors (including, if applicable, the entire WFB board of directors) administering such WFB Stock Plan, (ii) each WFB Stock Option Conversion Fraction assumed by HNC may be exercised solely for shares of HNC Common Stock, (as defined in this Section 2.4(a)) multiplied by (yiii) the number of shares of Company HNC Common Stock which could have been obtained subject to such WFB Stock Option shall be equal to the number of shares of WFB Common Stock subject to such WFB Stock Option immediately prior to the Effective Time upon multiplied by the exercise Exchange Ratio, provided that any fractional shares of each HNC Common Stock resulting from such Company Stock Option (multiplication shall be rounded down to the nearest whole share), at an and (iv) the per share exercise price under each such WFB Stock Option shall be adjusted by dividing the per share (exercise price under each such WFB Stock Option by the Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. Notwithstanding clauses (iii) equal to and (iv) of the exercise price for preceding sentence, each such share of Company Common Stock subject to a Company WFB Stock Option divided which is an “incentive stock option” shall be adjusted as required by Sections 409A and 424 of the Stock Option Conversion FractionIRC, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of the option within the meaning of Sections 409A and 424(h) of the IRC. HNC and WFB agree to take all references necessary steps to effect the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms foregoing provisions of this Section 2.4(a) shall be referred 2.05(a), including in the case of HNC taking all corporate action necessary to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the a sufficient number of shares of Parent HNC Common Stock that will become subject for delivery upon exercise of the options to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent HNC Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment issued in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsherewith.

Stock Options. At the Effective Time, each outstanding unexpired and unexercised option to purchase shares of capital stock of the Company that is then outstanding, whether vested or acquire unvested (a share "Company Option"), shall be assumed by Parent in accordance with the terms (as in effect as of the date of this Agreement and without regard to any provisions thereof which permit modification to such terms by the Board of Directors of Company or Parent) of the Company's 1998-A Stock Plan (the "Stock Plan") and the stock option agreement by which such Company Option is evidenced. All rights with respect to Company Common Stock under the outstanding Company Equity Plans (eachOptions shall thereupon be converted into rights with respect to Parent Common Stock. Accordingly, a “Company Stock Option”) shall vest from and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At after the Effective Time, (i) each Company Stock Option shall assumed by Parent may be converted into an option to purchase exercised solely for shares of Parent Common Stock, (ii) the number of shares of Parent Common Stock subject to each such assumed Company Option shall be equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained that were subject to such Company Option immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option (Applicable Fraction, rounded down to the nearest whole share)number of shares of Parent Common Stock, at an (iii) the per share exercise price for the Parent Common Stock issuable upon exercise of each such assumed Company Option shall be determined by dividing the exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a such Company Stock Option divided Option, as in effect immediately prior to the Effective Time, by the Stock Option Conversion Applicable Fraction, and all references rounding the resulting exercise price up to the nearest whole cent and (iv) all restrictions on the exercise of each such assumed Company Option shall continue in full force and effect, and the term, exercisability, vesting schedule and other provisions of such Company Option shall otherwise remain unchanged and shall continue to have, and be subject to, the same terms and conditions as set forth in the Stock Plan and/or stock option agreement by which such Company Option is evidenced immediately prior to the Effective Time; PROVIDED, HOWEVER, that each such assumed Company Option shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock split, reverse stock split, stock dividend, recapitalization or other similar transaction effected by Parent after the Effective Time; and PROVIDED, FURTHER, that if the employment of the holder of a Company Option is terminated by Parent other than for Cause or such holder terminates his or her employment with Parent for Good Reason, in each case within 180 days of the Closing Date, then, in addition to the portion of the Company Option which vests in accordance with its terms as a result of this transaction or such option termination, an additional 25% of the shares originally issuable under such Company Option shall vest effective upon the date of such termination. The foregoing acceleration provision shall also apply to each holder of a Company Option who does not become an employee of Parent pursuant to Section 5.7 hereof. In addition, if any Company Option is exercised prior to the first anniversary of the Closing Date, then Parent shall deliver to such holder a certificate representing 90 percent of the number of whole shares of Parent Common Stock that such holder has the right to receive pursuant to this Section 1.6 and shall deliver to the escrow agent under the Escrow Agreement in the form of Exhibit C hereto (the "Escrow Agreement"), on behalf of such holder, a certificate representing 10 percent of the number of whole shares of Parent Common Stock that such holder has the right to receive pursuant to the provisions of this Section 1.6, which shall be deemed to refer be Escrow Shares for purposes of this Agreement and the Escrow Agreement. Such holder shall be deemed to Parentbe a Merger Stockholder for purposes of Sections 9 and 10.1 of this Agreement and the Escrow Agreement. By exercising a Company Option prior to the first anniversary of the Closing Date, where appropriatethe holder shall be deemed to have approved Sections 9 and 10.1 of this Agreement and the Escrow Agreement. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant take all action that may be necessary to effectuate the terms provisions of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with 1.6. Following the issuance of Parent Exchange OptionsClosing, Parent shall reserve for issuance will send to each holder of an assumed Company Option a written notice setting forth (i) the number of shares of Parent Common Stock that will become subject to such assumed Company Option, (ii) the exercise price per share of Parent Exchange Options pursuant Common Stock issuable upon exercise of such assumed Company Option and (iii) Parent's commitment with respect to accelerated vesting upon a termination of employment as described in this Section 2.4(a)1.6. As promptly It is the intention of the parties that the Company Options assumed by Parent qualify following the Effective Time as reasonably practicable after incentive stock options as defined in Section 422 of the Code to the extent that such Company Options qualified as incentive stock options immediately prior to the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file with the SEC, no later than coincident with the effectiveness of the Resale Registration Statement contemplated by the Registration Rights Agreement attached as Exhibit K hereto, a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to registering the shares of Parent Common Stock subject issuable upon exercise of any Company Options assumed by Parent pursuant to this Section 1.6. Parent Exchange Options and shall use its commercially reasonable efforts to cause maintain the effectiveness of such registration statement Registration Statement for so long as such Company Options remain outstanding. Parent shall take all necessary corporate action to remain effective until the reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment Company Options assumed in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options1.6.

Stock Options. At Prior to the Effective Time, the Board of Directors of the Company (the “Company Board”) (or, if appropriate, any committee thereof) shall adopt appropriate resolutions and take all other actions necessary and appropriate to provide that, immediately prior to the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock Option under the Company Equity Plans (each, a “any Company Stock Option”) shall vest and become fully exercisableOption Plan, whether or not then vested exercisable or vested, shall be cancelled and, in exchange therefor, each former holder of any such cancelled Option shall be entitled to receive, in consideration of the cancellation of such Option and in settlement therefor, a payment in cash (subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall applicable withholding or other taxes required by applicable Legal Requirements to be converted into withheld) of an option to purchase the number of shares of Parent Common Stock amount equal to the product of (xA) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the total number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock previously subject to a Company Stock such Option divided by and (B) the Stock Option Conversion Fractionexcess, and all references to the Company in each such option shall be deemed to refer to Parentif any, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and Per Share Price over the exercise price per share of Company Common Stock previously subject to such Parent Exchange Option (such amounts payable hereunder being referred to as the “Option Payment”). From and after the Effective Time, any such cancelled Option shall no longer be determined in a manner which would not result in exercisable by the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A former holder thereof, but shall only entitle such holder to the payment of the CodeOption Payment, and the Company shall obtain all necessary consents to ensure that former holders of Options will have no rights other than the right to receive the Option Payment. As of the Effective Time, all Company Stock Option Plans shall be terminated and no further Options shall be granted thereunder. No less than thirty (30) days prior to the Effective Time, the Company shall provide each holder of an unexpired and unexercised Option under any Company Stock Option Plan with written notice of the potential merger contemplated by this Agreement, in a manner reasonably satisfactory to Parent and Parent’s counsel. Such written notice will notify the holder of an unexpired and unexercised Option of the right to exercise such Option within thirty (30) days from the date of the notice, and that such Option will terminate upon the expiration of the 30-day period. As an alternative to the foregoing, prior to the Effective Time, the Company may adopt appropriate resolutions and take all other actions necessary and appropriate to provide that, prior to the Effective Time, each unexpired and unexercised Option under any Company Stock Option Plan, whether or not then exercisable or vested, shall agree upon any adjustments be exercisable prior to this Section 2.4(a) necessary to avoid such new grant of stock optionsthe Effective Time and, if not so exercised, shall be terminated.

Stock Options. (a) At the Effective Time, the Target Stock Option Plan and each outstanding unexpired and unexercised option to purchase or acquire a share shares of Company Target Common Stock under the Company Equity Plans (each, a “Company Target Stock Option”) shall vest and become fully exercisableOption Plan, whether or not then vested or subject unvested, shall be assumed by Acquiror. Target has delivered to any performance condition that has not been satisfied. At Acquiror a schedule (the Effective Time, each Company "Option Schedule") which sets forth a true and complete list as of the date hereof of all holders of outstanding options under the Target Stock Option shall be converted into an option to purchase Plan including the number of shares of Parent Target Capital Stock subject to each such option, the exercise or vesting schedule, the exercise price per share and the term of each such option. On the Closing Date, Target shall deliver to Acquiror an updated Option Schedule current as of such date. Each such option so assumed by Acquiror under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Target Stock Option Plan and the individual option agreements immediately prior to the Effective Time, except that (i) such option shall be exercisable for that number of whole shares of Acquiror Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Target Common Stock which could have been obtained that were issuable upon exercise of such option immediately prior to the Effective Time upon multiplied by the exercise of each such Company Common Stock Option (Exchange Ratio and rounded down to the nearest whole share)number of shares of Acquiror Common Stock, at an (ii) the per share exercise price for the shares of Acquiror Common Stock issuable upon exercise of such assumed option shall be equal to the quotient determined by dividing the exercise price per share (of Target Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest centwhole cent and (iii) equal the vesting schedule for such assumed option shall accelerate at the Effective Time as provided in the Target Stock Option Plan and the Disclosure Schedule. It is the intention of the parties that the options so assumed by Acquiror qualify following the Effective Time as incentive stock options as defined in Section 422 of the Code to the exercise price for each extent such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references options qualified as incentive stock options prior to the Company in each such option shall be deemed to refer to Parent, where appropriateEffective Time. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable Within 20 business days after the Effective Time, Parent shall Acquiror will issue to each person who, immediately prior to the Effective Time was a holder of an outstanding Parent Exchange option under the Target Stock Option Plan a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsoption by Acquiror.

Stock Options. At the Effective Time, the Target Stock Option Plan and each outstanding unexpired and unexercised option to purchase or acquire a share shares of Company Target Common Stock under the Company Equity Plans (each, a “Company Target Stock Option”) shall vest and become fully exercisableOption Plan, whether or not then vested or subject unvested, shall be assumed by Acquiror. In addition, Target's rights to any performance condition that has not been satisfied. At repurchase shares of Target Common Stock under the Effective Time, each Company Target Stock Option Plan shall be converted into an option assigned to, and assumed by, Acquiror. Target has delivered to purchase Acquiror a schedule (the "Option Schedule") which sets forth a true and complete list as of the date hereof of all holders of outstanding options under the Target Stock Option Plan including the number of shares of Parent Target Capital Stock subject to each such option, the exercise or vesting schedule, the exercise price per share and the term of each such option. On the Closing Date, Target shall deliver to Acquiror an updated Option Schedule current as of such date. Each such option so assumed by Acquiror under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Target Stock Option Plan immediately prior to the Effective Time, except that (i) such option shall be exercisable for that number of whole shares of Acquiror Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Target Common Stock which could have been obtained that were issuable upon exercise of such option immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option (Exchange Ratio and rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Acquiror Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after Stock, (ii) the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to per share exercise price for the shares of Parent Acquiror Common Stock subject issuable upon exercise of such assumed option shall be equal to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and quotient determined by dividing the exercise price per share of Target Common Stock at which such Parent option was exercisable immediately prior to the Effective Time by the Exchange Option Ratio, rounded up to the nearest whole cent, and (iii) each assumed option which provided for acceleration of vesting upon a change in control of Target shall not accelerate in accordance with the terms of the plan or agreement currently evidencing the assumed option but shall be determined eligible for acceleration in a manner which would not result in accordance with the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A terms of the Code, assumption agreement entered into between Acquiror and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsoptionee.

Stock Options. (a) At the Effective Time, each outstanding unexpired the Acquiror will assume the Ledger Capital Corp. 1993 Stock Option Plan for Outside Directors and unexercised the Ledger Capital Corp. 1993 Incentive Stock Option Plan, (collectively, the "Option Plans") and all of the Company's obligations thereunder and may, at its election, provide for the merger of the Company's option to purchase or acquire a share plans into those of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfiedAcquiror. At the Effective Time, each Company Stock the Option Plans shall be converted into amended to provide that each outstanding option issued pursuant to the Option Plans shall become an option to purchase acquire, on the same terms and conditions as were applicable under such option (including, without limitation, the time periods allowed for exercise), a number of shares of Parent Acquiror Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) Exchange Ratio and the number of shares of Company Common Stock which could have been obtained prior subject to the Effective Time upon the exercise such option (provided that any fractional shares of each Acquiror Common Stock resulting from such Company Stock Option (multiplication shall be rounded down up to the nearest whole share), at an exercise a price per share (rounded up down to the nearest cent) equal to the exercise price for each such per share of the shares of Company Common Stock subject to a Company Stock Option such option divided by the Stock Option Conversion FractionExchange Ratio. Notwithstanding the foregoing, with respect to options that are incentive stock options, the excess of the aggregate fair market value of the shares subject to the option immediately after the substitution over the aggregate option price of such shares shall not be more than the excess of the aggregate fair market value of all shares subject to the option immediately before the substitution over the aggregate option price of such shares. The duration and other terms of the option shall remain the same, except that all references to the Company in each such option shall refer to the Acquiror. All options granted under the Options Plans shall be deemed to refer to Parent, where appropriatefully vested as of the day preceding the Effective Time. The other terms of such Company Stock Options shall continue Acquiror agrees to apply in accordance with their terms, including pursuant take all corporate action necessary to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the a sufficient number of shares of Parent Acquiror Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder for delivery upon exercise of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) options under the Securities Act on Option Plans assumed by the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment Acquiror in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsAgreement.

Stock Options. At Effective at commencement of Executive's employment, the Effective Time, each outstanding unexpired and unexercised option Employer will grant to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into Executive an option to purchase the number of 75,000 shares of Parent Common Stock equal the common stock of Centennial Bancorp pursuant to and subject to the product terms and conditions of the Restated 1995 Stock Incentive Plan (x) the "Stock Plan"). An additional grant of an option to purchase 25,000 shares under the Stock Option Conversion Fraction Plan (as defined in this Section 2.4(a)or under a similar subsequent plan adopted by the Employer) multiplied will be made by (y) the number of shares of Company Common Stock which could have been obtained prior Employer to the Effective Time Executive by January 20, 1999, conditioned upon the exercise Employer's achieving the 1998 performance goals established by the Board of Directors. Annually, beginning effective at January 1, 1999, the Executive will be granted an option to purchase 10,000 shares conditioned upon Employer's achieving the performance goals established by the Board of Directors for the prior Fiscal Year, and an additional 5,000 shares option if such 10,000 shares option is earned and the Employer achieves 110% of the prior Fiscal Year's after-tax profitability goal. Executive understands and acknowledges that Employer's grant of all stock options other than the initial 75,000 shares option is conditioned upon approval of a Stock Plan amendment or adoption of a successor Stock Plan by the shareholders of Employer and Centennial Bancorp, and that each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock stock option will be subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references stock option agreement to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted executed pursuant to the Stock Plan. If the shareholders fail to approve an amendment or successor Stock Plan permitting grant of all stock options due to Executive hereunder, then the Board of Directors may, instead, grant to the Executive nonstatutory stock options at the same exercise price and on the same other terms and conditions as if the options had been granted pursuant to the Stock Plan. Vesting of Executive's right to exercise each stock option shall accrue as to one-third of the option shares for each completed year of Executive's employment following the effective date of the grant of the option, except that all unexercised options shall be fully vested upon Executive's death or Disability, or upon a Change of Control, or upon termination of this Section 2.4(a) Agreement by the Employer without Cause or by the Executive with Good Reason. Executive's right to exercise a vested stock option shall not be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement forfeited on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration account of the Parent Exchange Options. For purposes termination of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance Executive's employment by Employer with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsCause or by Executive without Good Reason.

Stock Options. All options which may be exercised for issuance of Company Common Stock (each, a "Stock Option" and collectively the "Stock Options") are described in Section 1.6 of the Company Disclosure Schedule and are issued and outstanding pursuant to the Company's 1999 Incentive Stock Option Plan and the Company's 2004 Incentive Stock Option Plan (the "Company Stock Option Plans") and the agreements pursuant to which such Stock Options were granted (each, an "Option Grant Agreement"). True and complete copies of the Company's Stock Option Plans and all Option Grant Agreements relating to outstanding Stock Options have been delivered to Buyer. At the Effective Time, each Stock Option which is outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisableimmediately prior thereto, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Timeexercisable, each Company Stock Option shall automatically be converted into an option to purchase Buyer Common Stock (a "New Option") as follows: (i) the number of shares of Parent Buyer Common Stock covered by each New Option shall equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained covered by the corresponding Stock Option immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option Exchange Ratio and (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest centii) equal to the exercise price for each such share New Option shall equal the exercise price of Company Common Stock subject to a Company the corresponding Stock Option immediately prior to the Effective Time divided by the Stock Option Conversion FractionExchange Ratio. In substantially all respects, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options each New Option shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant otherwise be identical to the terms of this Section 2.4(a) shall be referred the corresponding Stock Option in effect immediately prior to the consummation of the Merger, subject to any provisions in the Company Stock Option Plans which require acceleration of vesting as a “Parent Exchange Option.” result of the consummation of the Merger. In connection with effecting such conversion, the issuance of Parent Exchange Options, Parent shall reserve for issuance the aggregate number of shares of Parent Buyer Common Stock that will become to be subject to Parent Exchange Options pursuant each New Option will be rounded up or down, if necessary, to this Section 2.4(athe nearest whole share (with one-half being rounded up) and the aggregate exercise price shall be rounded up or down, if necessary, to the nearest whole cent (with one-half being rounded up). As promptly as reasonably practicable after At the Effective Time, Parent the Company Stock Option Plans shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parentbe terminated. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date The adjustments provided herein with respect to the shares of Parent Common any Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration that are "incentive stock options" (as defined in Section 422 of the Parent Exchange Code) shall be effected in such manner as shall not cause a modification, extension or renewal of the Stock Options, within the meaning of Section 424(a) of the Code. For purposes of this Section 2.4(a)Prior to the Effective Time, the “Company shall take or cause to be taken all actions required under the Company Stock Option Conversion Fraction” Plans to provide for the foregoing. At the request of any holder of New Options, Buyer shall mean the Exchange Ratio subject to adjustment assist such holder in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share effecting cashless exercises of such Parent Exchange Option shall be determined in a manner which would not result New Options with third-party brokers in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant same manner that Buyer assists holders of stock options granted by Buyer under Section 409A its stock options plans to effect cashless exercises of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsoptions with third-party brokers.

Stock Options. At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share shares of Company Common FirstBancorporation Stock (in each case, an "ASSUMABLE OPTION") granted under (i) the Company Equity Plans 1986 Amended and Restated Non-Qualified Stock Option Plan of FirstBancorporation, Inc., and (eachii) the 1996 Stock Option Plan of FirstBancorporation, a “Company Stock Option”) shall vest and become fully exercisableInc. (collectively, whether or not then vested or subject to any performance condition that has the "STOCK OPTION PLANS"), which have not been satisfied. At exercised prior to the Effective Time, each Company Stock Option shall be converted into an option (a "REPLACEMENT OPTION") to purchase acquire, on the same terms and conditions as were applicable under such Assumable Option, the number of shares of Parent Common FNC Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (yA) the number of shares of Company Common FirstBancorporation Stock which could have been obtained prior subject to the Effective Time upon Assumable Option, multiplied by (B) the exercise of each Exchange Ratio (such Company Stock Option (product rounded down to the nearest whole sharenumber), at an exercise price per share (rounded up to the nearest whole cent) equal to (y) the aggregate exercise price for each the shares of FirstBancorporation Stock which were purchasable pursuant to such share Assumable Option divided by (z) the number of Company Common full shares of FNC Stock subject to a Company Stock such Replacement Option divided in accordance with the foregoing. Notwithstanding the foregoing, each Assumable Option which is intended to be an "incentive stock option" (as defined in Section 422 of the Code) shall be adjusted in accordance with the requirements of Section 424 of the Code. At or prior to the Effective Time, FirstBancorporation shall use its reasonable best efforts to take all action necessary, including obtaining any necessary consents from optionees, to permit the replacement of the outstanding Assumable Options by FNC pursuant to this SECTION 3.6 and to permit FNC to assume the Stock Option Conversion FractionPlans. FirstBancorporation shall further take all action necessary to amend the Stock Option Plans to eliminate automatic grants or awards thereunder following the Effective Time. At the Effective Time, and all references to FNC shall assume the Company in each Stock Option Plans provided that such option assumption shall be deemed only in respect of the Replacement Options and that FNC shall have no obligation with respect to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company any awards under the Stock Option as fully vested Plans other than the Replacement Options and exercisable. Each Company shall have no obligation to make any additional grants or awards under the Stock Option converted pursuant Plans. Prior to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable and at all times after the Effective Time, Parent FNC shall issue reserve for issuance such number of shares of FNC Stock as necessary so as to each holder permit the exercise of an outstanding Parent Exchange Option a document evidencing Replacement Options granted in the foregoing assumption manner contemplated by Parentthis Agreement. Parent FNC shall file a registration statement on Form S-8 (or any successor or other appropriate form an amendment to the Registration Statement to the same effect) as soon as reasonably practicable after the Effective Time so as to permit the exercise of such options and the sale of the shares received by the optionee upon such exercise at and after the Effective Time and FNC shall continue to make such filings thereafter as may be necessary to permit the continued exercise of options and sale of such shares; provided, however, that Parent is eligible the parties acknowledge and agree that "affiliates" (as described in SECTION 7.1(d)) of FirstBancorporation as of the Effective Time and affiliates of FNC shall be required to use) comply with the provisions of Rule 144 and Rule 145 under the Securities Act on the Closing Date of 1933, as amended (or any successor rules) with respect to the sale of shares of Parent Common FNC Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until acquired upon the exercise or expiration of the Parent Exchange Replacement Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. At Section 2.2(c) of the Effective TimeCasden Disclosure Letter sets forth the options granted under the Casden Stock Plan, the dates on which options under the plan were granted, name of the optionee for each such grant, the number of options granted on each such date, the exercise price thereof, and the vesting schedule thereof. Pursuant to Section 10 of the Casden Stock Plan, upon notice from the Board (as defined in the Casden Stock Plan) of the pendency of the Merger, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Casden Common Stock granted under the Company Equity Plans Casden Stock Plan (each, a “Company Stock "Casden Option”") will become exercisable in full for a period of thirty (30) days following the delivery of such notice. AIC shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained exercise his Casden Options prior to the Effective Time upon the on a net exercise of each such Company Stock Option (rounded down basis. Immediately prior to the nearest whole share)expiration of such thirty (30) day period, at each holder of an unexercised Casden Option shall be entitled to receive from Casden in cancellation thereof a payment (subject to applicable withholding taxes) in an amount equal to (i) the excess, if any, of $21.66, over the per share exercise price per share (rounded up to of such Casden Option, multiplied by the nearest cent) equal to the exercise price for each such share number of Company unexercised shares of Casden Common Stock subject to a Company Stock such Casden Option divided (the "Option Settlement Amount"). The aggregate Option Settlement Amount in respect of each Casden Option shall be paid by the Stock Option Conversion Fraction, and all references AIMCO in cash to the Company in each such option holder concurrently with the Closing. The surrender of a Casden Option shall be deemed to refer to Parent, where appropriate. The other terms a release of any and all rights the holder had or may have in respect of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Optionoption.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. At (a) The Company shall take all actions necessary to provide that, immediately prior to the Effective Time, each Company Option then outstanding unexpired under any Company Stock Option Plan shall become vested and unexercised option exercisable with respect to purchase or acquire a share one hundred percent (100%) of the shares of Company Common Stock under subject to each such Company Option; provided that the holder of such Company Option renders continuous service to the Company Equity Plans (eachas an employee, a “consultant or member of the Board of Directors of the Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject from the date hereof until at least immediately prior to any performance condition that has not been satisfiedthe Effective Time. At the Effective Time, each Company Option then outstanding under any Company Stock Option Plan, whether or not then exercisable, shall be converted into assumed and become an option to purchase Parent Common Shares in accordance with this Section 2.4. Each Company Option so assumed shall continue to have, and be subject to, the same terms and conditions (including vesting schedule, as adjusted pursuant to the first sentence of this Section 2.4(a)) as set forth in the applicable Company Stock Option Plan and any agreements thereunder immediately prior to the Effective Time, except that, as of the Effective Time, (i) each Company Option shall be exercisable (or shall become exercisable in accordance with its terms) for that number of shares of whole Parent Common Stock Shares equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares that were issuable upon exercise of such Company Common Stock which could have been obtained Option immediately prior to the Effective Time upon multiplied by the exercise sum of each (A) the Exchange Ratio and (B) the quotient obtained by dividing the Common Cash Consideration by the Parent Closing Price (such Company Stock sum, the "Option (Exchange Ratio"), rounded down to the nearest whole share)number of Parent Common Shares, at an and (ii) the per share exercise price for the Parent Common Shares issuable upon exercise of such Company Option so converted shall be equal to the quotient determined by dividing the exercise price per share (of Company Common Stock at which such Company Option was exercisable immediately prior to the Effective Time by the Option Exchange Ratio, rounded up to the nearest whole cent) equal . Notwithstanding the foregoing, the conversion of any Company Options which are "incentive stock options," within the meaning of Section 422 of the Code, into options to purchase Parent Common Shares shall be made so as not to constitute a "modification" of such Company Options within the exercise price for each such share meaning of Section 424 of the Code. Following the assumption of the Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion FractionOptions, and all references to the Company in each such option the Company Options and the Company Stock Option Plans shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. At the Effective Time, each the Company Stock Options, whether vested or unvested, will be assumed by PCA ("ASSUMED STOCK OPTIONS"). SECTION 2.2 of the Company Disclosure Schedule (as defined in Article III) sets forth a true and complete list as of the date hereof of all holders of outstanding unexpired and unexercised option options to purchase or acquire a share shares of Company Common Stock under the Company Equity Plans (each"COMPANY STOCK OPTIONS"), a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) including the number of shares of Company Common Stock which could have been obtained subject to each such option, the exercise or vesting schedule, the exercise price per share and the term of each such option. On the Closing Date, the Company shall deliver to PCA an updated SECTION 2.2 of the Company Disclosure Schedule (as defined in Article III) current as of such date. Each such option so assumed by PCA under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan ("COMPANY OPTION PLAN") and any other document governing such option immediately prior to the Effective Time upon the exercise Time, except that (a) such option will be exercisable for that number of each such Company whole shares of PCA Common Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share one and one-half (1.5) times that number of shares of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each that were issuable upon exercise of such option shall be deemed immediately prior to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing (b) the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to per share exercise price for the shares of Parent PCA Common Stock subject issuable upon exercise of such assumed option will be equal to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of Company Common Stock at which such Parent option was exercisable immediately prior to the Effective Time divided by the Exchange Ratio and rounded up to the nearest whole cent (the "ADJUSTED EXERCISE PRICE") and (c) any restriction on the exercisability of such Company Stock Option shall continue in full force and effect, and the term, exercisability, vesting schedule and other provisions of such Company Stock Option shall remain unchanged. If the foregoing calculation of the Adjusted Exercise Price results in an Assumed Stock Option being exercised for a fraction of a share of PCA Common Stock, then the number of shares of PCA Common Stock subject to that option will be determined in a manner which would not result rounded to the nearest whole number of shares of PCA Common Stock (rounded down, in the conversion case of the Company Stock Options into Parent Exchange that are Incentive Stock Options being treated as a new grant of stock options under Section 409A 422 of the Code). Continuous employment with the Company shall be credited to an optionee of the Company for purposes of vesting of the Assumed Stock Option. Consistent with the terms of the Company Option Plan and the documents governing the outstanding options, the Merger will not terminate any of the outstanding options under the Company Option Plan or accelerate the exercisability or vesting of such options or the shares of PCA Common Stock which will be subject to those options upon PCA's assumption of the options in the Merger. It is the intention of the parties that the options so assumed by PCA following the Effective Time will remain incentive stock options as defined in Section 422 of the Code to the extent such options qualified as incentive stock options prior to the Effective Time, and the parties hereto shall use their commercially reasonable efforts to carry out such intention. Within ten (10) business days after the Effective Time, PCA will issue to each person who, immediately prior to the Effective Time was a holder of an outstanding option under the Company Option Plan, a document in form and Parent shall agree upon any adjustments substance reasonably satisfactory to this Section 2.4(a) necessary to avoid the Company evidencing the foregoing assumption of such new grant of stock optionsoption by PCA.

Stock Options. At (a) Subject to Section 5.5(c), at the Effective Time, each Parent Option that is outstanding unexpired and unexercised option immediately prior to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisableEffective Time, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Timevested, each Company Stock Option shall be converted into and become an option to purchase CancerVax Common Stock, and CancerVax shall assume each such Parent Option in accordance with the number terms (as in effect as of shares the date of this Agreement) of the stock option plan, if any, under which such Parent Option was issued and the terms of the stock option agreement by which such Parent Option is evidenced. All rights with respect to Parent Common Stock equal under Parent Options assumed by CancerVax shall thereupon be converted into rights with respect to CancerVax Common Stock. Accordingly, from and after the product Effective Time: (i) each Parent Option assumed by CancerVax may be exercised solely for shares of CancerVax Common Stock; (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (yii) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company CancerVax Common Stock subject to a Company Stock each Parent Option divided assumed by the Stock Option Conversion Fraction, and all references to the Company in each such option CancerVax shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(adetermined by multiplying (A) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become were subject to such Parent Exchange Options pursuant Option immediately prior to this Section 2.4(a). As promptly as reasonably practicable after the Effective TimeTime by (B) the Conversion Factor, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing and rounding the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect resulting number down to the nearest whole number of shares of CancerVax Common Stock; (iii) the per share exercise price for the CancerVax Common Stock issuable upon exercise of each Parent Option assumed by CancerVax shall be determined by dividing the effective per share exercise price of Parent Common Stock subject to such Parent Exchange Options Option, as in effect immediately prior to the Effective Time, by the Conversion Factor, and shall use its commercially reasonable efforts rounding the resulting exercise price up to cause such registration statement to remain effective until the nearest whole cent; and (iv) any restriction on the exercise or expiration of any Parent Option assumed by CancerVax shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Parent Exchange Options. For purposes of this Section 2.4(a)Option shall otherwise remain unchanged; provided, the “Stock however, that: (A) each Parent Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment assumed by CancerVax in accordance with this Section 2.1(d). The number of shares 5.5(a) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any Parent Exchange Option stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction with respect to CancerVax Common Stock subsequent to the Effective Time; and the exercise price per share Table of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.Contents

Stock Options. (a) At the Effective Time, each Synchrologic Option outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At at the Effective Time, each Company Stock Option whether vested or unvested, shall be converted into assumed by Pumatech and deemed to constitute an option (a “Pumatech Option”) to purchase acquire, on the same terms and conditions as were applicable under the Synchrologic Option (except for any right of first refusal or repurchase provisions contained in the Synchrologic Option which shall cease to apply after the Effective Time), the same number of shares of Parent Pumatech Common Stock equal as the holder of such Synchrologic Option would have been entitled to receive pursuant to the product of (x) the Stock Option Conversion Fraction (as defined Merger had such holder exercised such option in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained full immediately prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole sharenumber), at an exercise a price per share (rounded up to the nearest whole cent) equal to (i) the aggregate exercise price for each such share the shares of Company Synchrologic Common Stock subject otherwise purchasable pursuant to a Company Stock such Synchrologic Option divided by (ii) the number of full shares of Pumatech Common Stock deemed purchasable pursuant to such Pumatech Option Conversion Fractionin accordance with the foregoing; provided, however, that, in the case of any Synchrologic Option to which Section 422 of the Code applies (“incentive stock options”), the option price, the number of shares purchasable pursuant to such option and all references to the Company in each terms and conditions of exercise of such option shall be deemed determined in order to refer to Parentcomply with Section 424(a) of the Code. Concurrently with the assumption of the Synchrologic Options by Pumatech at the Effective Time, where appropriate. The other terms all Synchrologic Options that then remain unvested will immediately and fully vest, with no further action required by Synchrologic, Pumatech or the holders of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisableSynchrologic Options. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance assumption by Pumatech of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Synchrologic Options pursuant to this Section 2.4(a6.3(a). As promptly as reasonably practicable after , Synchrologic shall be deemed to have assigned to Pumatech, effective at the Effective Time, Parent shall issue Synchrologic’s right, if any, to each holder repurchase unvested shares of an outstanding Parent Exchange Option a document evidencing Synchrologic Common Stock issuable upon the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (exercise of the Synchrologic Options or any successor or other appropriate form that Parent is eligible to use) previously issued upon the exercise of options granted under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a)Synchrologic Option Plan, the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number the terms of shares subject to any Parent Exchange the Synchrologic Option Plan and the exercise price per share of such Parent Exchange related stock option agreements and stock purchase agreements entered into under the Synchrologic Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsPlan.

Stock Options. (a) At the Effective Time, each option granted by CNBFB under the CNBFB Option Plan, which is outstanding unexpired and unexercised immediately prior thereto shall cease to represent a right to acquire shares of CNBFB Common Stock and shall be converted automatically into a fully-vested option to purchase or acquire a share shares of Company TSFG Common Stock under the Company Equity Plans in an amount and at an exercise price determined as provided below (each, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or otherwise subject to the terms of the applicable CNBFB Option Plan, the agreements evidencing grants thereunder, and any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into other agreements between CNBFB and an option to purchase the number of shares of Parent Common Stock equal to the product of optionee regarding CNBFB Options): (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y1) the number of shares of Company TSFG Common Stock which could have been obtained prior to be subject to the Effective Time upon new option shall be equal to the exercise product of each the number of shares of CNBFB Common Stock subject to the original option and the Exchange Ratio, provided that any fractional shares of TSFG Common Stock resulting from such Company Stock Option (multiplication shall be rounded down to the nearest whole shareshare (and .5 of a share shall be rounded up), at an and (2) the exercise price per share (rounded up to of TSFG Common Stock under the nearest cent) new option shall be equal to the exercise price for each such per share of Company CNFBB Common Stock subject to a Company Stock Option under the original option divided by the Stock Option Conversion FractionExchange Ratio, and all references provided that such exercise price shall be rounded to the Company in each such option nearest cent (and .5 of a cent shall be deemed to refer to Parent, where appropriaterounded up). The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant (b) Prior to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange OptionsEffective Time, Parent TSFG shall reserve for issuance the number of shares of Parent TSFG Common Stock that will become subject necessary to Parent Exchange Options pursuant to satisfy TSFG's obligations under this Section 2.4(a)Section. As promptly as reasonably practicable TSFG shall file with the SEC no later than ten business days after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other an appropriate form that Parent is eligible to use) under the Securities Act on of 1933, as amended (the Closing Date "Securities Act"), with respect to the shares of Parent TSFG Common Stock subject to Parent Exchange Options options to acquire TSFG Common Stock issued pursuant to this Section, and shall use its commercially reasonable best efforts to cause maintain the current status of the prospectus contained therein, as well as comply with applicable state securities or "blue sky" laws, for so long as such options remain outstanding; provided, however, that TSFG shall only be required to file and maintain the effectiveness of such registration statement with respect to remain effective until options that are eligible to be registered on a Form S-8. (c) Prior to the exercise or expiration Effective Time, TSFG and CNBFB shall take all such steps as may be required to cause any acquisitions of TSFG equity securities (including derivative securities with respect to any TSFG equity securities) and dispositions of CNBFB equity securities (including derivative securities with respect to any CNBFB equity securities) resulting from the transactions contemplated by this Agreement by each individual who is anticipated to be subject to the reporting requirements of Section 16(a) of the Parent Exchange Options. For purposes Act with respect to TSFG or who is subject to the reporting requirements of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean 16(a) of the Exchange Ratio subject Act with respect to adjustment in accordance with Section 2.1(d). The number of shares subject CNBFB, to any Parent be exempt under Rule 16b-3 promulgated under the Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsAct.

Stock Options. At Each unexercised MSB Stock Option that is outstanding immediately prior to the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) Time shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At exercisable at the Effective Time, each Company Stock Option Time and shall be converted automatically at the Effective Time into an option to purchase shares of IBC Common Stock under the IBC Employee Stock Option Plan ("IBC Stock Option"), with the number of shares of Parent IBC Common Stock equal to the product of (x) the be subject to a particular IBC Stock Option to equal the Conversion Fraction (as defined in this Section 2.4(a)) Ratio multiplied by (y) the number of shares of Company MSB Common Stock which could have been obtained prior subject to the Effective Time upon the exercise of each such Company a particular MSB Stock Option (Option, provided that any fractional share shall be rounded down to the nearest whole share), at an ; and with the exercise price per for each share (rounded up of IBC Common Stock subject to the nearest cent) a particular IBC Stock Option to be equal to the exercise price for each such share of Company an MSB Common Stock subject to a Company Share under the MSB Stock Option divided by the Conversion Ratio. Notwithstanding the preceding sentence, in the case of any MSB Stock Option Conversion Fractionto which Section 421 of the Internal Revenue Code of 1986, and all references to as amended ("the Company in each such option shall be deemed to refer to Parent"Code") applies by reason of its qualification under Section 422 of the Code, where appropriate. The other the terms of the IBC Stock Option into which such Company MSB Stock Options shall continue Option is to apply in accordance with their termsbe converted, including the exercise price, the number of shares of IBC Common Stock purchasable pursuant to such preexisting Option, and the terms and conditionsconditions of exercise of such Option, shall be determined so as to comply with Sections 422 and 424(a) of the Code. A cash payment shall be made for any fractional share of MSB Common Stock that is not represented by the IBC Stock Option, based upon the average closing sale price of shares of IBC Common Stock on the five trading days immediately preceding the Effective Time, as reported on the Nasdaq Stock Market. Upon such conversion, all rights under each such MSB Stock Option and under the related stock option plan previously adopted by MSB ("MSB Stock Option Plan") shall terminate; provided, however, that Parent shall treat each Company the terms, benefits, rights and features of such MSB Stock Option and the agreement evidencing the grant of such MSB Stock Option, as fully vested and exercisable. Each Company Stock Option converted pursuant in existence immediately prior to the Effective Time shall, to the extent inconsistent with the terms of this Section 2.4(a) shall be referred the IBC Stock Option Plan or any similar IBC Plan, and favorable to as a “Parent Exchange the interests of the holder of the IBC Stock Option.” In connection with , continue to apply to such IBC Stock Option from and after the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a)Effective Time. As promptly soon as reasonably practicable after the Effective Time, Parent IBC shall issue deliver to each the holder of an outstanding Parent Exchange each IBC Stock Option a document appropriate notices setting forth such holder's rights pursuant to the IBC Stock Option Plan, the agreement evidencing such IBC Stock Option and the foregoing assumption by Parent. Parent original grant of such converted MSB Stock Option shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act continue in effect on the Closing Date with respect same terms and conditions (after giving effect to the shares of Parent Common Stock subject Consolidation pursuant to Parent Exchange Options the Agreement and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration conversion as set forth above). As of the Parent Exchange Options. For purposes Effective Time, IBC shall amend the IBC Stock Option Plan to the extent necessary to conform to, and implement, the provisions of this Section 2.4(a4.14(e), including, without limitation, amendments necessary to preserve those provisions of the “converted MSB Stock Options that are more favorable to the holders of IBC Stock Options than would otherwise be the case pursuant to the terms of the IBC Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsPlan.

Stock Options. All options which may be exercised for issuance of Company Common Stock (each, a “Stock Option” and collectively the “Stock Options”) are described in the Company Disclosure Schedule and are issued and outstanding pursuant to the Company’s 2002 Incentive Stock Option Plan, the Company Bank’s 2000 Incentive Stock Option Plan, the Company’s 2002 Stock Option Plan for Non-Employee Directors, the Company Bank’s 1998 Stock Option Plan for Non-Employee Directors or the Company Bank’s 1996 Stock Option Plan (collectively, the “Company Stock Option Plans”) and the agreements pursuant to which such Stock Options were granted (each, an “Option Grant Agreement”). True and complete copies of the Company’s Stock Option Plans and all Option Grant Agreements relating to outstanding Stock Options have been delivered to Parent. Pursuant to the terms of the Company Stock Option Plans and the consents described in this Section 1.6, the Company shall take the following actions: (x) at least ten business days prior to the anticipated Election Deadline, the Company shall give all holders of Stock Options the choice of either (A) exercising their Stock Options (whether or not then vested) prior to the Election Deadline or (B) having their unexercised Stock Options cancelled immediately prior to the Effective Time in return for the payment set forth below (the “Cancellation Choice”, it being understood that any such holder who fails to specify any such choice prior to the Election Deadline shall be deemed to have elected the Cancellation Choice) and (y) the Company shall give each person exercising Stock Options prior to the Election Deadline a Form of Election in a manner consistent with Section 1.5(i). Between the date hereof and the Closing, the Company and the Company Bank shall take all other actions necessary to effect the provisions of this Section 1.6. Concurrent with the execution of this Agreement, the Company has delivered to Parent a consent form in which each holder of Stock Options granted under the Company’s 2002 Stock Option Plan for Non-Employee Directors or the Company Bank’s 2000 Stock Option Plan for Non-Employee Directors has consented to the steps contemplated by this Section 1.6 with respect to such holder’s Stock Options. At the Effective Time, each Stock Option which is outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisableimmediately prior thereto, whether or not then vested or subject exercisable, shall be canceled and all rights thereunder shall be extinguished. As consideration for such cancellation, the Company shall make payment immediately prior to any performance condition that has not been satisfied. At the Effective Time, Time to each Company holder of an outstanding Stock Option shall be converted into of an option to purchase the number of shares of Parent Common Stock equal to the product of amount, if any, determined by multiplying (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each underlying such Company Stock Option by (rounded down to the nearest whole share), at y) an exercise price per share (rounded up to the nearest cent) amount equal to the exercise price for each such share excess (if any) of Company Common Stock subject to a Company Stock Option divided by (i) the Stock Option Conversion FractionPer Share Cash Consideration, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(aover (ii) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option Stock Option, provided, however, that no such payment shall be determined made to a holder unless and until such holder has executed and delivered to the Company an instrument in a manner which would not result such form prescribed by Parent and reasonably satisfactory to the Company accepting such payment in full settlement of his or her rights relative to such Stock Options. Prior to the conversion of Effective Time, the Company shall take or cause to be taken all actions required under the Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of Option Plans to provide for the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsforegoing.

Stock Options. At Upon Executive’s executing and delivering this Agreement, (which date shall be the Effective Time“Execution Date”) and actually commencing work at the Location, each outstanding unexpired and unexercised Executive shall be entitled to receive an option grant under Company’s 2005 Long Term Incentive Plan (“LTIP”) to purchase or acquire a share the 2,367,623 shares of Company Common Stock under Company’s common stock, $.001 par value per share. Of this amount, 2,029,391 shares (the Company Equity Plans (each, a “Company Stock OptionVesting Options”) shall vest and become fully exercisableone-third per year for each year of Executive’s employment with all such shares vested upon the third anniversary of Starting Date. The additional 338,232 shares (the “Conditional Options”) shall immediately vest upon Company’s market capitalization, whether based upon its common stock price as quoted on the AMEX or not any other national exchange on which such shares are then vested or listed, priced on the day after the respective quarterly earnings call, remaining above $150 million for the period between any two quarterly earnings calls prior to the fifth anniversary of Executive’s Starting Date while the Executive is employed, subject to any performance condition that has not been satisfiedthe terms and conditions of the LTIP. At The term of the Effective Time, each Company Stock Option Vesting Options and the Conditional Options shall be converted into an option five (5) years, not to purchase exceed the number expiration of shares the LTIP. The date of Parent Common Stock grant of all such options shall be the Execution Date and the exercise price shall equal to the product greater of (x) the Stock Option Conversion Fraction (Fair Market Value of Company’s stock as defined in this Section 2.4(a)) multiplied by (y) the number of shares LTIP or $0.25 per share. Should there be a change in control of Company Common Stock which could have been obtained prior to all the Effective Time upon Executive’s options having vested and the exercise of each such Company Stock Option Executive is thereafter terminated without “For Cause” (rounded down to the nearest whole shareas hereinafter defined), at an exercise price per share or Executive’s salary or bonus is diminished or Executive’s duties and responsibilities, or operational authority are materially diminished, during the one year period following a Change in Control (rounded up to a “Change of Control Event”), then the nearest cent) equal to Vesting Options and the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option Conditional Options shall be deemed to refer to Parentvest in full and become immediately exercisable. Should the Executive not be terminated without “For Cause” following a Change of Control Event, where appropriate. The other terms of such Company Stock Options then any and all options granted hereunder shall continue to apply vest in accordance with their terms, including pursuant to such preexisting the terms and conditions, provided, however, conditions of such options except that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) Conditional Options contingency shall be referred deemed to as a “Parent Exchange Optionhave been satisfied.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.

Stock Options. At Prior to the Effective Time, the Company and Acquiror shall take such action as may be necessary or appropriate for Acquiror, at its option, to assume or to issue a substitute option with respect to each outstanding unexpired and unexercised option to purchase or acquire a share shares of Company Common Stock (collectively, the "COMPANY STOCK OPTIONS") under the Company Equity Plans Company's 1997 Stock Incentive Plan (each, a “the "COMPANY STOCK PLAN") or granted to certain officers independent of the Company Stock Option”) shall vest and become fully exercisablePlan, whether or not then vested or subject to any performance condition so that has not been satisfied. At at the Effective Time, Time each Company Stock Option shall will become or be converted into replaced by an option to purchase the a number of whole shares of Parent Acquiror Common Stock (an "ACQUIROR OPTION") equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which that could have been obtained prior to purchased (assuming full vesting) under the Effective Time upon the exercise of each such Company Stock Option multiplied by the Exchange Ratio (rounded down to the nearest whole and eliminating any fractional share), at an exercise a price per share (rounded up to the nearest cent) of Acquiror Common Stock equal to the per-share option exercise price for each such share of specified in the Company Common Stock Option. Each substituted Acquiror Option shall otherwise be subject to a the same terms and conditions as apply to the related Company Stock Option. The date of grant of each substituted Acquiror Option for purposes of such terms and conditions shall be deemed to be the date on which the corresponding Company Stock Option divided by was granted. As to each assumed Company Stock Option, at the Stock Option Conversion Fraction, and Effective Time (i) all references to the Company in each such the stock option agreements with respect to the Company Stock Options being assumed shall be deemed to refer to Parent, where appropriate. The other terms Acquiror; (ii) Acquiror shall assume all of such the Company's obligations with respect to the related Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms Option; and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a(iii) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent Acquiror shall issue to each holder of an outstanding Parent Exchange a Company Stock Option a document evidencing the foregoing assumption by ParentAcquiror. Parent Nothing in this Section 2.04 shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under affect the Securities Act on the Closing Date schedule of vesting with respect to the shares of Parent Common Company Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d)the terms of such Company Stock Options, and Acquiror acknowledges that the Company Stock Plan and the Company Stock Options granted to Xxxxxx X. Xxxxx and Xxxxx X. Xxxxxxxx independent of the Company Stock Plan provide that such Company Stock Options will be 100% vested at the Effective Time. The number of shares subject to any Parent Exchange Option Company represents and warrants that the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion assumption of Company Stock Options into Parent Exchange or substitution of Acquiror Options being treated therefor, as a new grant of stock options under contemplated by this Section 409A 2.04, may be effected pursuant to the terms of the CodeCompany Stock Options, the Company Stock Plan and the terms of the Company Stock Options granted to certain officers of the Company independent of the Company Stock Plan without the consent of any holder of a Company Stock Option and Parent shall agree upon without liability to any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsholder.

Stock Options. At the Effective Time, each Each stock option issued and outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the 1993 Stock Option Plan, as amended, of the Company Equity Plans (eachthe "STOCK OPTION PLAN") is referred to herein as an "EMPLOYEE/ DIRECTOR STOCK OPTION" and all such options are referred to herein, collectively, as the "EMPLOYEE/ DIRECTOR STOCK OPTIONS." Each stock option issued and outstanding under the 1993 Directors' Stock Option Plan (the "DIRECTORS' STOCK OPTION PLAN") is referred to herein as a “Company "DIRECTOR'S OPTION" and all such options are referred to herein, collectively, as the "DIRECTORS' OPTIONS." The Employee/Director Stock Option”) shall vest Options and become fully exercisablethe Directors' Options are referred to herein, whether or not then vested or subject to any performance condition that has not been satisfied. collectively, as the "COMPANY OPTIONS" and, individually, as a "COMPANY OPTION." At the Effective Time, each Company Stock Option shall become immediately fully vested and shall be converted into an option to purchase shares of Parent Common Stock, as provided below. Following the Effective Time, each such Company Option shall be exercisable upon the same terms and conditions as then are applicable to such Company Option, except that (i) each such Company Option shall be exercisable for that number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock for which could have been obtained such Company Option was exercisable immediately prior to the Effective Time upon Date and (y) the Stock Exchange Ratio and (ii) the exercise price of each such Company Stock Option (rounded down option shall be equal to the nearest whole share), at an quotient obtained by dividing the exercise price per share (rounded up of such Company Option by the Stock Exchange Ratio. From and after the date of this Agreement, no additional options to the nearest cent) equal to the exercise price for each such share purchase shares of Company Common Stock subject to a shall be granted under the Company Stock Option divided Plan, Directors' Stock Option Plan or otherwise. Except as otherwise agreed to by the Stock Option Conversion Fractionparties, and all references to no person shall have any right under any stock option plan (or any option granted thereunder) or other plan, program or arrangement of the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their termsrespect to, including pursuant any right to such preexisting terms and conditionsacquire, provided, however, that Parent shall treat each equity securities of the Company Stock Option following the Effective Time. At or as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to soon as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of a Company Option that is canceled an outstanding agreement that accurately reflects the terms of the Parent Exchange Option a document evidencing the foregoing assumption substituted therefore as contemplated by Parentthis Section 2.7. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible i) take all corporate actions necessary to use) under the Securities Act on the Closing Date with respect to the reserve for issuance such number of shares of Parent Common Stock subject as will be necessary to satisfy exercises in full of all Parent Exchange Options and shall after the Effective Time, (ii) use its commercially reasonable best efforts to cause ensure that an effective Registration Statement on Form S-8 is on file with the Securities and Exchange Commission (the "SEC") with respect to such registration statement Parent Common Stock, and (iii) use its reasonable best efforts to remain effective until the exercise or expiration have such shares admitted to trading upon exercises of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.ARTICLE III

Stock Options. At In addition to the Effective Timebasic salary provided for above, each outstanding unexpired Employer hereby grants to executive the right, privilege and unexercised option (the "Stock Option") to purchase Five hundred thousand (500,000) shares of the common stock, $0.001 par value. The "Option Shares" are to be fully vested and become exercisable immediately. The exercise price of the Option Shares shall be Twenty-five ($.25) per share. The option rights granted hereby shall be cumulative. Upon becoming exercisable, the option rights shall be exercisable at any time and from time to time, in whole or acquire in part; provided, however, that options may be exercised for no longer than three (3) years from the date of this Agreement. The options shall be exercised by written notice directed to Employer, accompanied by a share check payable to Employer for the Option shares being purchased. Employer shall make immediate delivery of Company Common Stock such purchased shares, fully paid and non-assessable, registered in the name of Executive. The certificates evidencing such shares shall bear the following restrictive legend, unless and until such shares have been registered in accordance with the Securities and Exchange Act of 1933, as amended (the "Act"): THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT"), OR THE SECURITIES LAWS OF ANY OTHER JURISDICITON, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF IN ANY MANNER UNLESS THEY ARE REGISTERED UNDER SUCH ACT AND THE SECURITIES LAWS OR ANY APPLICABLE JURISDICITONS OR UNLESS PURSUANT TO ANY EXEMPTION THEREFROM. Employer shall use its best efforts to register the Option Shares under the Company Equity Plans (eachAct at the earlier of such time as it registers shares issuable pursuant to a qualified employee stock option plan or such time as it registers shares beneficially owned by or issued to either or all of the following individuals: If, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition the extent that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product common stock of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option Employer shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their termsincreased or reduced by whatever action, including pursuant but not limited to such preexisting terms and conditionschange of par value, providedsplit, howeverreclassification, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to distribution or a dividend payable in stock, or the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a)like, the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange the Stock Option and the exercise option price per share shall be proportionately adjusted. If Employer is reorganized or consolidated or merged with another corporation, Executive shall be entitled to receive options covering shares of such Parent Exchange Option shall be determined in a manner which would not result reorganized, consolidated, or merged company in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A same proportion, at an equivalent price, and subject to the same conditions. For purposes of the Codepreceding sentence, the excess of the aggregate fair market value of the shares subject to the option immediately after any such reorganization, consolidation, or merger over the aggregate option price of such shares shall not be more than the excess of the aggregate fair market value of all shares subject to the Stock Option immediately before such reorganization, consolidation, or merger over the aggregate option price of such shares, and the Company new option or assumption of the old Stock Option shall not give Executive additional benefits which he did not have under the old Stock Option, or deprive him of benefits which he had under the old Stock Option. Executive shall have no rights as a stockholder with respect to the Option Shares until exercise of the Stock Option and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant payment of stock optionsthe Option Price as herein provided.

Stock Options. At Parent shall not assume or otherwise replace any Company Options in connection with the Effective Time, each outstanding unexpired transactions contemplated hereby. Upon the terms and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the conditions set forth in this Agreement, at the Effective Time, each Company Stock Option Option, whether vested or unvested, that is outstanding immediately prior to the Effective Time shall be cancelled, extinguished and automatically converted into the right to receive, in each case without interest and subject to deduction for any required Tax withholding (which, for the avoidance of doubt, shall be taken first from any cash payments) (a) following the Effective Time, an option to purchase the number of shares of Parent Common Stock amount equal to the product sum of (xi) the Per Share Common Cash Consideration and (ii) the Per Share Common Stock Option Conversion Fraction (as defined in this Section 2.4(a)) Consideration multiplied by (y) the number of shares of Company Common Stock which could have been obtained that was issuable upon exercise of such Company Option immediately prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, Time; provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant the Per Share Common Cash Consideration payable to the terms holder of the Company Option shall be reduced by an amount equal to the aggregate exercise price of the Company Option (the aggregate amount of Per Share Common Cash Consideration not payable to all holders of Company Options as a result of such reduction, the “Cash Consideration Exercise Price Amount”); and (b) the holder’s Pro-Rata Portion of the Promissory Note Interests, the Contingent Merger Consideration, the Escrow Funds, the Representative Reimbursement Amount, if any, as and when made in accordance with this Agreement, provided that any such amounts must be made prior to the date that is five (5) years following the Effective Time and otherwise in accordance with Treasury Regulation 1.409A-3(i)(5)(iv)(A) and, for the avoidance of doubt, no amounts shall be paid or payable under this Section 2.4(a2.8 to any holder of Company Options on or after the fifth (5th) shall be referred to as a “Parent Exchange Option.” In connection with anniversary of the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options Effective Time. The amounts payable pursuant to this Section 2.4(a2.8 shall be paid to the Company Holders in respect of the Company Options by the Surviving Corporation, subject to delivery to the Surviving Corporation of an Option Holder Acknowledgment (the “Option Holder Acknowledgment”), and the Surviving Corporation shall (and Parent shall cause the Surviving Corporation to) process and pay to each holder of Company Options the amount payable pursuant to Section 2.8(a) within five (5) Business Days following the Closing (and which payments shall be reduced by the amount of any Taxes required to be withheld under applicable law). As promptly To the extent that amounts are deducted or withheld for any required Tax withholding, such amounts shall be treated for all purposes under this Agreement as reasonably practicable after having been paid to the person to whom such amounts would otherwise have been paid. Prior to the Effective Time, Parent the Company shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts take all actions necessary to cause such registration statement each Company Option to remain effective until be cancelled, extinguished and converted at the exercise or expiration of the Parent Exchange Options. For purposes of Effective Time as set forth in this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options2.8.

Stock Options. At Following the Effective TimeRetirement Date, each outstanding unexpired and unexercised option all of the Executive’s stock options granted by the Company to purchase or acquire a share shares of Company Common the Company’s stock (the “Stock under the Company Equity Plans (each, a “Company Stock OptionOptions”) that are outstanding and vested on the Retirement Date shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply remain exercisable in accordance with their terms. Any termination of the Executive’s employment (other than for death or Disability (as such term is defined in the Company’s long-term disability plan)) on or prior to the Retirement Date shall be deemed to be termination of employment for retirement with respect to the terms of any outstanding Stock Options. Subject to the remainder of this Section 3(b), including pursuant following the Retirement Date, all of the Stock Options, if any, that are outstanding and unvested on the Retirement Date shall continue to vest in accordance with their terms as if the Executive had remained employed by the Company, and once vested, shall remain exercisable in accordance with their terms. Notwithstanding anything contained in the immediately preceding sentence to the contrary, (i) Stock Options held by the Executive that are unvested on the Retirement Date shall not continue to vest and shall not be exercisable until the date on which both the Supplementary Pension Payment and Black-Scholes values required to be determined under clause (ii) of this Section 3(b) have been determined (the “Stock Option Determination Date”), and (ii) on the Stock Option Determination Date, the Executive shall, and hereby will, cease to be eligible to vest in a number of unvested Stock Options (if there had been unvested stock options on the Retirement Date) with a Black-Scholes value equal to the amount of the Supplementary Pension Payment, or if the number of such preexisting terms unvested Stock Options has a Black-Scholes value less than the Supplementary Pension Payment, then the Executive shall cease to be eligible to vest in all of such unvested Stock Options. All Stock Options which shall no longer be eligible to vest as of the Stock Option Determination Date shall terminate as of the Stock Option Determination Date and conditionsshall under no circumstances become exercisable. If the Executive shall cease to be eligible to vest in less than all unvested Stock Options, then the Stock Options subject to termination under this Section 3(b) shall be determined by terminating first those with the highest per share exercise price and then terminating Stock Options in descending order of exercise price. The applicable award agreements for the Stock Options that remain unvested following the Retirement Date are hereby amended to the extent necessary to implement this Section 3(b); provided, however, that Parent nothing herein shall treat each Company Stock Option as fully vested amend such award agreements to eliminate or modify the provisions regarding cancellation and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration rescission of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of including without limitation the Codenon-disclosure, non-solicitation, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant assignment of stock optionsinventions provisions.

Stock Options. At the Effective Time, each stock option (all options issued pursuant to the Insurdata Stock Option Plans are referred to herein, collectively, as the "Insurdata Options" and, individually, as an "Insurdata Option") issued and outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Insurdata Incorporated 1999 Stock Option Plan, and any other plan or program maintained by Insurdata under which Options have been granted, as listed on Section 3.1(b) of the Insurdata Disclosure Schedule (the "Insurdata Stock Option Plans") shall be converted into an option to purchase shares of HealthAxis Common Stock, as provided below. Following the Effective Time, each such Insurdata Option shall be exercisable upon the same terms and conditions as then are applicable to such Insurdata Option, except that (i) each such Insurdata Option shall be exercisable for that number of shares (rounding down to the nearest whole share, with cash being payable for any fraction of Parent a share) of HealthAxis Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Insurdata Common Stock for which could have been obtained such Insurdata Option was exercisable immediately prior to the Effective Time upon and (y) the Exchange Ratio and (ii) the exercise price of each such Company Stock Insurdata Option (rounded down shall be equal to the nearest whole share), at an exercise price per share quotient (rounded up to the nearest centone hundredth) equal to obtained by dividing the exercise price for each such per share of Company such Insurdata Option by the Exchange Ratio. Following the Effective Time, any restriction on the exercise of any Insurdata Option shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Insurdata Option (except as set forth in this Section 2.3) shall remain unchanged. From and after the date of this Agreement, no additional options to purchase shares of Insurdata Common Stock subject to a Company shall be granted under the Insurdata Stock Option divided Plans or otherwise. Except as otherwise agreed to by the Stock Option Conversion FractionParties, and all references to the Company in each such no person shall have any right under any stock option shall be deemed to refer to Parentplan (or any option granted thereunder) or other plan, where appropriate. The other terms program or arrangement of such Company Stock Options shall continue to apply in accordance Insurdata with their termsrespect to, including pursuant any right to such preexisting terms and conditionsacquire, provided, however, that Parent shall treat each Company Stock Option equity securities of Insurdata following the Effective Time. At or as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to soon as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent HealthAxis, as the Surviving Corporation, shall issue to each holder of an outstanding Parent Exchange Insurdata Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible converted into an option to use) under the Securities Act on the Closing Date with respect to the purchase shares of Parent HealthAxis Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration a statement to remain effective until that accurately reflects the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange of HealthAxis Common Stock for which the Insurdata Option is exercisable and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to Insurdata Option as contemplated by this Section 2.4(a) 2.3. HealthAxis shall take all corporate actions necessary to avoid reserve for issuance such new grant number of stock optionsshares of HealthAxis Common Stock as will be necessary to satisfy exercises in full of all Surviving Corporation Insurdata Options after the Effective Time.

Stock Options. At the Effective Time, each the Company Stock Options, whether vested or unvested, will be assumed by NPI ("Assumed Stock Options"). Section 2.2 of the Company Disclosure Schedule hereto sets forth a true and complete list as of the date hereof of all holders of outstanding unexpired and unexercised option options to purchase or acquire a share shares of Company Common Stock under the Company Equity Plans (each, a “"Company Stock Option”) shall vest and become fully exercisableOptions"), whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) including the number of shares of Company Common Stock which could have been obtained subject to each such option, the exercise or vesting schedule, the exercise price per share and the term of each such option. On the Closing Date, the Company shall deliver to NPI an updated Section 2.2 of the Company Disclosure Schedule hereto current as of such date. Each such option so assumed by NPI under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan ("Company Option Plan") and any other document governing such option immediately prior to the Effective Time, except that (a) such option will be exercisable for that number of whole shares of NPI Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option (Exchange Ratio and rounded down to the nearest whole share)number of shares of NPI Common Stock, at an (b) the per share exercise price for the shares of NPI Common Stock issuable upon exercise of such assumed option will be equal to the quotient determined by dividing the exercise price per share (of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest centwhole tenth of a cent and (c) equal to any restriction on the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms exercisability of such Company Stock Options Option shall continue to apply in accordance with their termsfull force and effect, including pursuant to and the term, exercisability, vesting schedule and other provisions of such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisableshall remain unchanged. Each Company Stock Option converted pursuant to Consistent with the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance Company Option Plan and the documents governing the outstanding options, the Merger will not terminate any of Parent Exchange Options, Parent shall reserve for issuance the number outstanding options under the Company Option Plan or accelerate the exercisability or vesting of such options or the shares of Parent NPI Common Stock that which will become be subject to Parent Exchange Options pursuant those options upon NPI's assumption of the options in the Merger. It is the intention of the parties that the options so assumed by NPI following the Effective Time will remain incentive stock options as defined in Section 422 of the Code to this Section 2.4(a)the extent such options qualified as incentive stock options prior to the Effective Time, and the parties hereto shall use their commercially reasonable efforts to carry out such intention. As promptly as reasonably practicable Within 10 business days after the Effective Time, Parent shall NPI will issue to each person who, immediately prior to the Effective Time was a holder of an outstanding Parent Exchange option under the Company Option Plan a document in form and substance reasonably satisfactory to the Company evidencing the foregoing assumption of such option by ParentNPI. Parent shall NPI agrees to file with the Securities and Exchange Commission ("SEC") after the Closing a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to covering the shares of Parent NPI Common Stock subject issuable pursuant to Parent Exchange Options Assumed Stock Options. The Company shall cooperate with and shall use its commercially reasonable efforts to cause assist NPI in the preparation of such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsstatement.

Stock Options. At (a) Each holder of one or more outstanding options to purchase Starseed Common Stock ("Starseed Stock Option") under the Starseed 1998 Stock --------------------- Option/Stock Issuance Plan (the "Plan") shall have the right, exercisable at any ---- time prior to the Effective Time, each outstanding unexpired to furnish GeoCities with a signed waiver agreement (in form and unexercised option substance satisfactory to purchase GeoCities) in which such person, as consideration for the assumption of his or acquire a her Starseed Stock Options by GeoCities in the Merger, waives any and all rights he or she may otherwise have under the Plan or the agreements evidencing his or her Starseed Stock Options or otherwise, to receive any portion of the Cash Payment upon the subsequent exercise of the assumed options which would reflect, or otherwise compensate such person for, the cash consideration payable per share of Company Starseed Common Stock under to the Company Equity Plans (each, a “Company actual holders of Starseed Common Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfiedin conversion of their shares of such Common Stock in the Merger. At the Effective Time, each Company issued and outstanding Starseed Stock Option held by a person who has previously furnished GeoCities with such a waiver agreement will be assumed by GeoCities, whether vested or unvested. Each Starseed Stock Option so assumed by GeoCities under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the agreement evidencing such option immediately prior to the Effective Time, as modified by the waiver agreement furnished GeoCities hereunder, except that (i) such Starseed Stock Option shall be converted into an option to purchase the exercisable (when vested) solely and exclusively for that number of whole shares of Parent GeoCities Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Starseed Common Stock which could have been obtained that were issuable upon the exercise of the Starseed Stock Option immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option (Exchange Ratio and rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent GeoCities Common Stock, (ii) the per share exercise price of the GeoCities Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after issuable upon the Effective Time, Parent exercise of such assumed Starseed Stock Option shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect be equal to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and quotient determined by dividing the exercise price per share of such Parent Exchange Starseed Common Stock in effect under the Starseed Stock Option immediately prior to the Effective Time and rounded up to the nearest whole cent, and (iii) there shall be determined in a manner which would not result in no right to receive any cash payments or other cash consideration upon the conversion exercise of Company the assumed Starseed Stock Option. Any Starseed Stock Options into Parent Exchange Options being treated as issued and outstanding at the Effective Time and held by a new grant of stock options person who has not furnished GeoCities with a waiver agreement under this Section 409A of the Code5.12(a) shall terminate at that time, whether vested or unvested, and shall not be assumed by GeoCities, and such person shall cease to have any rights to purchase either Starseed Common Stock or GeoCities Common Stock under the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsterminated Starseed Stock Options or the Plan.

Stock Options. At (a) Pursuant to amendments effected in accordance with Section 9.03 hereof, all options (the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock under the Company Equity Plans (each, a “Company Stock Option”"IVAX OPTIONS") shall vest and become fully exercisableoutstanding, whether or not then exercisable and whether or not vested at the Effective Time under IVAX's 1994 Stock Option Plan or subject to 1985 Stock Option Plan or any performance condition that has not been satisfiedplans assumed by IVAX in connection with any acquisition, business combination or similar transaction (collectively, the "IVAX STOCK OPTION PLANS"), shall remain outstanding following the Effective Time. At the Effective Time, the IVAX Options shall, by virtue of the Merger and without any further action on the part of IVAX or the holder thereof, be assumed by IVAX NYCOMED in such manner that IVAX NYCOMED (i) is a corporation "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code or (ii) to the extent that Section 424 of the Code does not apply to any such IVAX Options, would be such a corporation were Section 424 of the Code applicable to such IVAX Options. From and after the Effective Time, all references to IVAX in the IVAX Stock Option Plans, Employee Savings Plan and the applicable stock option agreements issued thereunder shall be deemed to refer to IVAX NYCOMED, which shall have assumed the IVAX Stock Option Plans as of the Effective Time by virtue of this Agreement and without any further action. Each IVAX Option assumed by IVAX NYCOMED (each Company a "SUBSTITUTE OPTION") shall be exercisable upon the same terms and conditions as under the applicable IVAX Stock Option Plan and the applicable option agreement issued thereunder, except that (A) each such Substitute Option shall be converted into an option exercisable for, and represent the right to purchase the acquire, that whole number of shares of Parent IVAX NYCOMED Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded up or down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent IVAX Common Stock subject to Parent such IVAX Option multiplied by the Merger Exchange Options Ratio; and shall use its commercially reasonable efforts to cause such registration statement to remain effective until (B) the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise option price per share of such Parent Exchange Option IVAX NYCOMED Common Stock shall be determined an amount equal to the option price per share of IVAX Common Stock subject to such IVAX Option in a manner effect immediately prior to the Effective Time divided by the Merger Exchange Ratio (the option price per share, as so determined, being rounded upward to the nearest full cent). Notwithstanding anything in this Section 2.09 or in Section 9.03 to the contrary, any specified treatment of the IVAX Options which would not result in shall be inconsistent with accounting for the conversion of Company Stock Options into Parent Exchange Options being treated Transactions as a new grant "pooling of stock options under Section 409A of interests" for financial accounting purposes shall be modified to the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) extent necessary to avoid make such new grant treatment consistent with "pooling of stock optionsinterests" accounting treatment.

Stock Options. At Effective as of the Effective TimeDistribution Date, each Tenneco shall cause all outstanding unexpired and unexercised option options to purchase or acquire a share of Company Tenneco Common Stock under held by employees and officers other than (i) Active Employees and Former Employees of Automotive Group, (ii) employees of Packaging Corporation of America and (iii) employees of the Company Equity Plans folding carton division (eachor persons who have succeeded to the rights of any persons described in (i), a “Company Stock Option”(ii) shall vest and become fully exercisable, whether or not then vested or subject (iii) with respect to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option options to purchase the number of shares of Parent Tenneco Common Stock equal Stock) to be replaced by options to purchase Packaging Common Stock. Subject to the product requirements of (x) applicable law and generally accepted accounting principles, the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share)number, at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option replacement options shall be determined in a manner which would consistent with that described in Exhibit A attached hereto. Options held by persons described in clause (ii) or (iii) above, not result exercised prior to the Distribution Date shall be canceled effective as of the Distribution Date. Options held by Active Employees and Former Employees of Automotive Group (or persons who have succeeded to the rights of such persons) shall, unless exercised prior to the Distribution Date, remain outstanding as adjusted as provided herein after the Distribution Date, subject to the requirements of TENNECO DISTRIBUTION AGREEMENT E-5 62 applicable law and generally accepted accounting principles. The parties recognize that in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of some jurisdictions, Automotive employees were granted rights other than stock options under Section 409A in lieu of the CodeSpecial Stock Option Award of 100 options per grantee, and in those jurisdictions, the outstanding rights will be adjusted comparably. The Automotive Company options and Parent rights shall agree upon any adjustments have the same terms and conditions as prior to this Section 2.4(a) necessary the Distribution Date except that the number of options and the option exercise price shall be adjusted as described in Exhibit A attached hereto. To the extent that the exercisability of options to avoid such new purchase Tenneco Common Stock currently is subject to the attainment of share price hurdles, those hurdles will also be adjusted with respect to both options to purchase Packaging Common Stock and Tenneco Common Stock. Tenneco may grant of stock optionsspecial pre-Distribution Date exercisability with respect to some or all options which are not otherwise exercisable.

Stock Options. At In the Effective Timeevent of a Change in Control, each outstanding unexpired Executive's resignation for Good Reason or Executive's termination without Cause, all unvested stock options previously granted to Executive shall immediately vest and be exercisable as set forth below. In the event that there is a termination of Executive's employment hereunder for any reason, Executive shall be entitled to exercise any and all stock options that were previously granted to him by the Company, and are outstanding, vested and unexercised as of his Termination Date, during the exercise period ending on the greater of (i) two (2) years from his Initials:________ Initials:________ Termination Date or (ii) the expiration date of the stock option as specified in the stock option plan or stock option agreement, as applicable, notwithstanding any provision in such plan or agreement that provides for a more limited time period to purchase exercise stock options following termination of employment; provided however, if said stock option plan or acquire stock option agreement provides therein for a share longer period of Company Common Stock under time to exercise such outstanding, vested and unexercised stock options following his Termination Date, then such stock option plan or agreement shall control and the remaining provisions of this Section 6(c) shall be inapplicable and without further force or effect. In the event that there is a termination of Executive's employment hereunder for Cause or Executive voluntarily resigns without Good Reason within one year from the date of this Agreement, Executive shall forfeit any and all stock options that were previously granted to him by the Company, and are unvested and unexercised as of his Termination Date. During the extension period specified in the previous paragraph, if applicable, the Executive shall be considered an employee of the Company Equity Plans (each, a “Company Stock Option”) who shall vest and become fully exercisable, whether or not then vested or subject make himself available to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references provide consulting services to the Company in each consideration for such extension of the option shall exercise period and any post-termination payments provided to Executive under Section 6(a) or (b) of this Agreement. In this regard, Executive agrees to be deemed classified as an employee of the Company solely for the limited purpose of making himself available to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provide consulting services on an as-needed basis; provided, however, that Parent shall treat each Company Stock Option Executive hereby specifically waives any right, entitlement, claim or demand to (i) any additional compensation for such consulting services and (ii) coverage or benefits under any of the Company's employee benefit plans or programs, or other perquisites, terms and conditions of employment, except as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms expressly specified in other provisions of this Section 2.4(a) shall be referred to Agreement. Except as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to expressly provided in this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a6(c), the “Stock Option Conversion Fraction” provision of consulting services by Executive shall mean the Exchange Ratio subject not expand his rights or duties under this Agreement. Executive hereby agrees to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A provide, upon request of the CodeCompany, and consulting services to the Company on the following terms and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.conditions:

Stock Options. (a) At the Effective Time, the Target Stock Option Plans and each outstanding unexpired and unexercised option to purchase or acquire a share shares of Company Target Common Stock under the Company Equity Plans (each, a “Company Target Stock Option”) shall vest and become fully exercisableOption Plans, whether or not then vested or subject unvested, shall be assumed by Acquiror. Target has delivered to any performance condition Acquiror a schedule (the "Option Schedule") that has not been satisfied. At sets forth a true and complete list as of the Effective Time, each Company date hereof of all holders of outstanding options under the Target Stock Option shall be converted into an option to purchase Plans, including the number of shares of Parent Target Capital Stock subject to each such option, the exercise or vesting schedule, the exercise price per share and the term of each such option. On the Closing Date, Target shall deliver to Acquiror an updated Option Schedule current as of such date. Each such option so assumed by Acquiror under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Target Stock Option Plans immediately prior to the Effective Time, except that (i) such option shall be exercisable for that number of whole shares of Acquiror Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Target Common Stock which could have been obtained that were issuable upon exercise of such option immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option (Exchange Ratio, and rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Acquiror Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after Stock, (ii) the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to per share exercise price for the shares of Parent Acquiror Common Stock subject issuable upon exercise of such assumed option shall be equal to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and quotient determined by dividing the exercise price per share of Target Common Stock at which such Parent option was exercisable immediately prior to the Effective Time, by the Option Exchange Option Ratio, rounded up to the nearest whole cent, (iii) assumed options which provided for acceleration of vesting upon a change in control of Target shall be determined in a manner which would not result fully vested on and after the Effective Date and shall be exercisable until the date 12 months following the later of (A) the Effective Date or (B) cessation of the optionee's service (if such optionee commenced service with Acquiror following the Closing), (iv) assumed options held by directors, former directors and consultants to the directors shall be fully vested on and after the Effective Date and shall be exercisable until the date 12 months following the Effective Date, and (v) except as provided in the conversion foregoing clauses (iii) and (iv), no assumed option shall provide for an exercise period in excess of Company Stock Options into Parent Exchange Options being treated 12 months in the event of the cessation of the optionee's service. The options so assumed by Acquiror shall qualify following the Effective Time as incentive stock options as defined in Section 422 of the Code to the extent such options qualified as incentive stock options prior to the Effective Time. Within twenty (20) business days after the Effective Time, Acquiror will issue to each person whose option shall be assumed in accordance with this section 5.14, a document in form and substance satisfactory to Target evidencing the foregoing assumption of such option by Acquiror. Neither Acquiror nor Target shall be in breach of this Agreement solely as a new grant result of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments optionholder failing to this Section 2.4(a) necessary to avoid such new grant of stock optionssign an Assumption Agreement.

Stock Options. At The Compensation Committee of the Effective TimeBoard of Directors, each outstanding unexpired will award Executive 100,000 incentive stock options on Employer’s common stock with an option price of fair market value as defined in the 1998 Stock Incentive Plan on the date of grant, which shall be Executive’s first day of active employment with Employer. The options described hereunder will be granted by the Compensation Committee of the Board of Directors pursuant to the Employer’s 1998 Stock Incentive Plan and unexercised a stock option to purchase or acquire agreement containing such terms and substantially in the form attached hereto as Exhibit A. This option agreement will be for a share term of Company Common Stock under the Company Equity Plans ten (each, a “Company Stock Option”10) years and shall provide that 20,000 options shall vest annually commencing on the first anniversary of the grant, and become fully exercisablecontinuing each of the next four (4) years until all the options have vested as of the fifth anniversary of the grant. Additionally, whether the Employer shall grant to Executive 10,000 to 20,000 stock options annually based on performance of Executive and Employer. In all events, Executive shall receive not less than 10,000 stock options per year during the term hereof. Performance at expected or budgeted performance consistent with opportunities in the market place will result in the award of 20,000 stock options annually. The performance criteria may include, but not then vested be limited to EPS Growth, Asset Growth, Operating Efficiency, Return on Equity, Loan Concentration, Asset Durability and Overall Performance Evaluation by the Board of Directors. However, if Employer’s strategic plans or subject to any performance condition that has not been satisfied. At extenuating circumstances preclude the Effective Timeattainment of this goal, each Company Stock Option shall be converted into the Compensation Committee and Executive will mutually agree on an option to purchase the appropriate number of shares to be granted. In the event of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained prior to the Effective Time upon the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to any conflict between the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange OptionsAgreement and any other oral or written representation regarding stock options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to one hand, and the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration terms of the Parent Exchange Options. For purposes of this Section 2.4(a)stock option agreement or the stock option plan, the “terms of the latter two documents shall govern. The Employer represents and warrants that the Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment Incentive Plan has been approved in accordance with Section 2.1(d). The number of shares subject applicable law and that Employer will adopt any additional stock option plans and Agreements in form substantially identical to any Parent Exchange Option the Employer’s 1998 Stock Incentive Plan and the exercise price per share of such Parent Exchange Stock Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) Agreement necessary to avoid such new grant of stock optionsaward Executive the additional options described hereunder.

Stock Options. (a) At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire a share of Company Common Stock Navius Option under the Company Equity Plans (eachNavius Option Plans, whether vested or unvested, shall be assumed by Endosonics and deemed to constitute an Endosonics Option to acquire, on the same terms and conditions as were applicable under the Navius Option, a “Company Stock Option”) shall vest and become fully exercisable, whether or not then vested or subject to any performance condition that has not been satisfied. At the Effective Time, each Company Stock Option shall be converted into an option to purchase the number of shares of Parent Endosonics Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (yi) the number of shares of Company Navius Common Stock which could have been obtained issuable had the holder of such Navius Option exercised such option in full immediately prior to the Effective Time upon multiplied by the exercise of each such Company Stock Option Exchange Ratio (rounded down to the nearest whole sharenumber), at an exercise a price per share (rounded up to the nearest whole cent) equal to (i) the aggregate exercise price for each such share the shares of Company Navius Common Stock subject otherwise purchasable pursuant to a Company Stock such Navius Option divided by (ii) the number of full shares of Endosonics Common Stock deemed purchasable pursuant to such Endosonics Option Conversion Fractionin accordance with the foregoing; provided, however, that, in the case of any Navius Option to which Section 422 of the Code applies ("INCENTIVE STOCK OPTIONS"), the option price, the number of shares purchasable pursuant to such option and all references to the Company in each terms and conditions of exercise of such option shall be deemed determined in order to refer to Parent, where appropriatecomply with Section 424(a) of the Code. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance assumption by Endosonics of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Navius Options pursuant to this Section 2.4(a6.5(a). As promptly as reasonably practicable after , Navius shall be deemed to have assigned to Endosonics, effective at the Effective Time, Parent shall issue Navius's right to each holder repurchase unvested shares of an outstanding Parent Exchange Option a document evidencing Navius Common Stock issuable upon the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (exercise of the Navius Options or any successor or other appropriate form that Parent is eligible to use) previously issued upon the exercise of options granted under the Securities Act on Navius Option Plans, in accordance with the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration terms of the Parent Exchange OptionsNavius Option Plans and the related stock option agreements and stock purchase agreements entered into under the Navius Option Plans. For purposes of this Section 2.4(a)the foregoing, the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option "OPTION EXCHANGE RATIO" shall be determined in a manner which would not result in by dividing (x) the conversion of Company quotient obtained by dividing (A) $15,500,000 by (B) the Reference Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of Price, by (y) the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock optionsTotal Capitalization Number.

Stock Options. (a) At the Effective Time, each outstanding unexpired and unexercised option to purchase or acquire shares of Pinnacle Common (a share of Company Common Stock under the Company Equity Plans (each, a “Company "Pinnacle Stock Option”") shall vest issued pursuant to the Pinnacle Financial Services, Inc. Executive Long Term Incentive Plan (also known as the Pinnacle Financial Services, Inc. 1993 Stock Option Plan), as amended, and become fully exercisablethe Indiana Financial Corporation 1986 Stock Option and Incentive Plan (together, the "Stock Option Plans"), whether or not then vested exercisable or subject vested, shall cease to any performance condition that has not been satisfied. At represent a right to acquire shares of Pinnacle Common and shall be converted automatically into an option to acquire, from and after the Effective Time, each Company on the same terms and conditions as were applicable under such Pinnacle Stock Option (including the immediate vesting of such Pinnacle Stock Option to the extent that the terms thereof shall be converted into an option to purchase provide for such immediate vesting upon the consummation of the Merger), the number of full shares of Parent CNB Common as the holder of such Pinnacle Stock equal Option would have been entitled to receive pursuant to the product of (x) the Stock Option Conversion Fraction (as defined Merger had such holder exercised such option in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained full immediately prior to the Effective Time upon (determined by multiplying the exercise of each such Company Stock Option (rounded down to the nearest whole share), at an exercise price per share (rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, provided, however, that Parent shall treat each Company Stock Option as fully vested and exercisable. Each Company Stock Option converted pursuant to the terms of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the aggregate number of shares of Parent Pinnacle Common covered by such Pinnacle Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable after Option by the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(aConversion Ratio), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise at a price per share equal to (y) the aggregate amount of the exercise prices for Pinnacle Common otherwise purchasable pursuant to such Parent Exchange Option Pinnacle Stock Option, divided by (z) the number of full shares (and, subject to Section 5.04(d) hereof, for these purposes, any fractional share amount shall be rounded upwards to the next higher full share amount) of CNB Common deemed purchasable pursuant to such Pinnacle Stock Option (determined as provided above in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary 5.04(a)). In no event shall CNB be required to avoid such new grant issue fractional shares of stock optionsCNB Common.

Stock Options. (a) At the Effective Time, each outstanding unexpired and unexercised option to purchase Shares (each "COMPANY STOCK OPTION" and, collectively, "COMPANY STOCK OPTIONS") issued pursuant to the Company's 1998 Stock Option Plan or acquire a share any other agreement or arrangement, whether vested or unvested, shall be converted as of Company the Effective Time into options to purchase shares of Parent Common Stock under the Company Equity Plans (each, a “in accordance with this Section 2.11. All plans or agreements described above pursuant to which any Company Stock Option”) shall vest and become fully exercisable, whether Option has been issued or not then vested or subject may be issued are referred to any performance condition that has not been satisfied. collectively as the "COMPANY PLANS." At the Effective Time, each Company Stock Option shall be converted into deemed to constitute an option to purchase acquire, on the same terms and conditions (but taking into account any changes thereto, including any acceleration in the vesting or exercisability of such option by reason of this Agreement or the Merger or the transactions or matters contemplated by this Agreement provided for in such option or the applicable plan with respect thereto) as were applicable to such Company Stock Option, a number of shares of Parent Common Stock equal to the product of (x) the Stock Option Conversion Fraction (as defined in this Section 2.4(a)) multiplied by (y) the number of shares of Company Common Stock which could have been obtained subject to such Company Stock Option immediately prior to the Effective Time upon Time, multiplied by the exercise of each such Company Stock Option (Exchange Ratio, rounded down to the nearest whole share), at an exercise a price per share of Parent Common Stock equal to (i) the per share exercise price for the shares of Company Common Stock otherwise purchasable pursuant to such Company Stock Option divided by (ii) the Exchange Ratio, rounded up to the nearest cent) equal to the exercise price for each such share of Company Common Stock subject to a Company Stock Option divided by the Stock Option Conversion Fraction, and all references to the Company in each such option shall be deemed to refer to Parent, where appropriate. The other terms of such Company Stock Options shall continue to apply in accordance with their terms, including pursuant to such preexisting terms and conditions, ; provided, however, that in the case of any option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code ("INCENTIVE STOCK OPTIONS" or "ISOS"), Parent shall treat may cause the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option to be determined so as to comply with Section 424(a) of the Code. Notwithstanding anything herein to the contrary, each Company Stock Option as fully vested and exercisable. Each issued to a non-employee director of the Company shall automatically be deemed amended so that such non-employee director shall be entitled to exercise such Company Stock Option converted pursuant to the terms for a period of this Section 2.4(a) shall be referred to as a “Parent Exchange Option.” In connection with the issuance of Parent Exchange Options, Parent shall reserve for issuance the number of shares of Parent Common Stock that will become subject to Parent Exchange Options pursuant to this Section 2.4(a). As promptly as reasonably practicable at least 90 days after the Effective Time, Parent shall issue to each holder of an outstanding Parent Exchange Option a document evidencing the foregoing assumption by Parent. Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form that Parent is eligible to use) under the Securities Act on the Closing Date with respect to the shares of Parent Common Stock subject to Parent Exchange Options and shall use its commercially reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of the Parent Exchange Options. For purposes of this Section 2.4(a), the “Stock Option Conversion Fraction” shall mean the Exchange Ratio subject to adjustment in accordance with Section 2.1(d). The number of shares subject to any Parent Exchange Option and the exercise price per share of such Parent Exchange Option shall be determined in a manner which would not result in the conversion of Company Stock Options into Parent Exchange Options being treated as a new grant of stock options under Section 409A of the Code, and the Company and Parent shall agree upon any adjustments to this Section 2.4(a) necessary to avoid such new grant of stock options.