Common use of Stock Options Clause in Contracts

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code.

Stock Options. (a) At the Effective Time, each outstanding option The Company shall take all actions or warrant cause all such actions to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant be taken prior to the Company's 1988 Stock Option PlanCommencement Date as are necessary to ensure that, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share Time, all then outstanding options to purchase Common Stock of the Company set forth on Schedule 3.03-1 of the Company Disclosure Schedule (collectively, the "Company Options"), whether or not exercisable, whether or not vested, and whether or not performance-based, under the Company's 1992 Equity Incentive Stock Option Plan and 2001 Equity Incentive Plan (collectively, the "Company Stock Option Plans") that are held by those persons set forth on Schedule 2.04A of the Company Disclosure Schedule (as defined in Section 3.01 hereof), shall be automatically converted into the right to receive only an amount of cash (net of applicable withholding Taxes) equal to (x) the aggregate difference, if any, between the Per Share Amount less the exercise price for the Shares otherwise purchasable pursuant to per share of Common Stock payable upon exercise of such Company Stock Option divided Options multiplied by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable of Common Stock issuable thereunder upon exercise immediately prior to the Effective Time. Additionally, the Company shall take all actions or cause all such actions to be taken prior to the date of the consummation of the Offer as are necessary to ensure that the holders of at least 80% of the Company Options that are not held by those persons set forth on said Schedule 2.04A (the "Remaining Options") shall be converted as set forth above. The Company shall use its reasonable best efforts to ensure that as soon as practicable and in any event prior to the Effective Time all of the Remaining Options that were not converted as set forth above on or before the date of the consummation of the Offer shall be exercised or converted as set forth above. The Company shall use its reasonable best efforts to obtain a signed consent of each holder of outstanding Company Options to the conversion of such Company Options as specified in this Section 2.04(a). Except with respect to Company Options for which a signed consent is obtained in accordance with this Section 2.04(a), and notwithstanding anything to the contrary in this Section 2.04(a), no payment shall be made to any holder of a Company Option that is to be converted and terminated unless such holder delivers a signed waiver acknowledging that all of his or her outstanding Company Options are converted and terminated at the Effective Time and waiving all of his or her rights under or with respect to those Company Options. The Company shall use its reasonable best efforts to take all such actions or cause such actions to be taken such that, as soon as practicable, all Company Options that have an exercise price per share of Common Stock equal to or greater than the Per Share Amount shall be converted and terminated as of the Effective Time. Purchaser shall pay, or cause to be paid, the cash amounts payable pursuant to this Section 2.04(a) in respect of Company Options at or shortly (and in no event more than five (5) business days) after the Effective Time, except that such option and payment with respect to the terms and conditions Company Options set forth on Schedule 2.04B of exercise of such option the Company Disclosure Schedule shall be determined made from the Exchange Fund on the 90th day following the Effective Time (unless such day is not a business day, in order which case payment shall be made on the next succeeding business day). The Company shall not make, or agree to comply with make, any payment of any kind to any holder of a Company Option (except for the payments described in this Section 424(a2.04) without the prior written consent of the CodeParent.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares shares of Company Common Stock (a "Company Stock Option" or collectively or, collectively, "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangementstock option plans listed on Schedule 1.10 hereto (the "Company Plans"), whether vested or unvested, shall be converted as cancelled and, in lieu thereof, Parent shall issue to each holder of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any a Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option (each, a "Parent Option"), to acquire, on substantially the same terms and subject to substantially the same conditions as were applicable under such Company Stock Option, a including, without limitation, term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Code, acceleration and termination provisions, the same number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time Time, at a price per share equal to (xy) the aggregate exercise price for the Shares shares of Company Common Stock otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (iz) the number of Shares otherwise full shares of Parent Common Stock deemed purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that in the case of any option to which Section 421 of the Code applies by reason of its qualification under Section any of Sections 422 through 424 of the Code ("incentive stock options" or "ISOs" ) Code, the option exercise price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined adjusted, if necessary, in order to comply with Section 424(a) 424 of the CodeCode and provided, further, however, that the number of shares of Parent Common Stock that may be purchased upon exercise of any such Parent Option shall not include any fractional share and, upon exercise of the Parent Option, a cash payment shall be made for any fractional share based upon the average closing price for Parent Common Stock as reported on the Nasdaq Stock Market (or any subsequent national securities exchange on which shares of Parent Common Stock are listed for trading) for the five trading days immediately preceding the date of exercise. Employment with the Company shall be credited to the optionees for purposes of determining the number of vested shares of Parent Common Stock subject to exercise under converted Company Options after the Effective Time. None of the Company Stock Options that are unvested at the Effective Time shall become vested as a result of the execution and delivery of this Agreement or the consummation of the Merger.

Stock Options. (a) At Subsequent to the Effective Timeeffectiveness of the Form 10, but prior to the consummation of the Distribution, and subject to the consummation of the Distribution, each outstanding option or warrant to purchase Shares ALTISOURCE Common Stock (a "Company Stock Option" or collectively "Company “ALTISOURCE Stock Options"”) issued pursuant granted and outstanding under the 2009 Equity Incentive Plan of ALTISOURCE (“ALTISOURCE Option Plan”) shall remain granted and outstanding and shall not, and ALTISOURCE shall cause (to the Company's 1988 maximum extent permitted under the ALTISOURCE Option Plan) the ALTISOURCE Stock Options not to, terminate, accelerate or otherwise vest as a result of the Distribution, and each holder thereof immediately prior to the Distribution will be entitled to the following, determined in a manner in accordance with, and subject to, the ALTISOURCE Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive FAS123R and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as Section 409A of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute Internal Revenue Code: (i) an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, acquire a number of shares of Parent Residential Class B Common Stock equal to the product of (x) the number of shares of Parent ALTISOURCE Common Stock that subject to the holder of such Company ALTISOURCE Stock Option would have been entitled to receive pursuant to the Merger had held by such holder exercised such option or warrant in full immediately prior to on the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by Distribution Date and (y) the product distribution ratio of one (i1) share of Residential Class B Common Stock for every three (3) shares of ALTISOURCE Common Stock (the number of Shares otherwise purchasable pursuant “Residential Stock Options”), with an exercise price to such Company Stock Option, multiplied by be determined in a manner consistent with this Section 3.04 and (ii) the Exchange Ratio; provided, however, that in the case of any option to which Section 421 adjustment of the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise price of such option shall holder’s ALTISOURCE Stock Option, to be determined in order to comply a manner consistent with this Section 424(a3.04 (the “Adjusted ALTISOURCE Stock Options”) of (the CodeResidential Stock Options and the Adjusted ALTISOURCE Stock Options, together, the “Post-Distribution Stock Options”).

Stock Options. As of the close of business on February 13, 2003: (ai) At the Effective Timethree million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, each (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding option options, rights or warrant warrants to purchase Shares (a "Company NPS Common Stock Option" or collectively "Company Stock Options") issued other than pursuant to the Company's 1988 Stock NPS Option PlanPlans, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase (iii) thirty eight thousand seven hundred twenty five (38,725) shares of Parent NPS Common Stock in accordance with are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms of this Section 1.11. All plans or agreements described above and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any Company Stock character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option has been issued as a result of the Mergers (whether alone or may be issued upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other than similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding warrants are referred as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to collectively as the "Company Plans." Each Company Stock which each such NPS Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to was granted; (iii) the number of shares of Parent NPS Common Stock that the holder of subject to each such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to NPS Option; (xiv) the aggregate exercise price for the Shares otherwise purchasable pursuant to of each such Company Stock Option divided by NPS Option; (yv) the product of date on which each such NPS Option was granted; (ivi) the number extent to which each such NPS Option is vested and unvested as of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by a recent practicable date; (iivii) the Exchange Ratio; provideddate on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, however, that in and indicates the case extent of any option to which such acceleration. Section 421 of the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a3.2(b) of the CodeNPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule).

Stock Options. Prior to the Effective Time, the Company shall take all actions necessary to provide, effective as of the Effective Time, for the cancellation, on the terms and conditions set forth in this Section 1.09(a) and without any payment therefor except as otherwise provided in this Section 1.09(a), of all Stock Options held by the Principal Stockholder that are outstanding at the Effective Time (awhether or not then exercisable) At (each such Stock Option being, an “Affiliate Stock Option“). As of the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Affiliate Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, (whether vested or unvested, ) shall be converted as of cancelled (and to the Effective Time into options or warrantsextent formerly so exercisable shall no longer be exercisable) and shall entitle each holder thereof, as applicablein cancellation and settlement therefor, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, receive a number of shares of Parent Common Class A Stock, as of the Effective Time, determined by dividing (i) the product of (A) the amount, if any, by which the Merger Consideration exceeds the exercise price per share with respect to such Affiliate Stock equal Options, and (B) the total number of shares of Company Stock then issuable upon the exercise of such Affiliate Stock Options (whether or not then vested or exercisable), by (ii) the Merger Consideration; provided, that the obligations of the Principal Stockholder in respect of any withholding taxes due upon receipt of the shares of Class A Stock pursuant to this Section 1.09(a) shall be satisfied by reducing the number of shares of Parent Common Class A Stock that the holder of such Company Stock Option would have been entitled to receive otherwise deliverable pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at this Section 1.09(a) by a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company number of shares of Class A Stock Option divided determined by (y) the product of dividing (i) the number minimum statutory amount that the Company is required to withhold upon the delivery of Shares otherwise purchasable shares of Class A Stock pursuant to such Company Stock Optionthis Section 1.09(a), multiplied by (ii) the Exchange Ratio; providedMerger Consideration, however, and the Company shall remit all amounts that the Company is required to withhold upon the delivery of shares of Class A Stock pursuant to this Section 1.09(a) to the applicable taxing authorities in the case a timely manner. Any shares of Class A Stock delivered in respect of any option to which Affiliate Stock Option in accordance with this Section 421 of the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" 1.09(a) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined deemed to be Excluded Shares and shall be cancelled at the Effective Time in order to comply accordance with Section 424(a) of the Code1.07.

Stock Options. (a) At Each option to purchase shares of Company Common Stock that is outstanding at the Effective Time, each outstanding option whether or warrant to purchase Shares not exercisable and whether or not vested (a "Company Stock Option"), shall, without any action on the part of the Company or the holder thereof, be assumed by Parent in such manner that Parent (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 and the regulations thereunder or collectively "Company Stock Options"(ii) issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as extent that Section 424 of the Code does not apply to any such Company Option, would be such a corporation were Section 424 of the Code applicable to such Company Option. From and after the Effective Time into options or warrantsTime, as applicable, all references to purchase shares of Parent Common Stock the Company in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option Options shall be deemed to constitute an option refer to acquire, on Parent. The Company Options assumed by Parent shall be exercisable upon the same terms and conditions as were applicable under the Company Options (including provisions regarding vesting and the acceleration thereof) except that (i) such Company Stock Option, a number of shares of Options shall entitle the holder to purchase from Parent Common Stock equal to the number of shares of Parent Common Stock that (rounded down to the holder nearest whole number of such shares) that equals the product of the Conversion Ratio multiplied by the number of shares of Company Common Stock subject to such Company Option would have been entitled to receive pursuant immediately prior to the Merger had such holder exercised such Effective Time, (ii) the option or warrant exercise price per share of Parent Common Stock shall be an amount (rounded up to the nearest full cent) equal to the option exercise price per share of Company Common Stock in full effect immediately prior to the Effective Time at a price per share equal to divided by the Conversion Ratio, and (xiii) the aggregate exercise price for Company Options shall vest to the Shares otherwise purchasable extent required pursuant to the current terms of such Company Stock Option divided by Options or other agreements as described in Section 1.7 of the Company Disclosure Schedule (yas defined below); provided that if such vesting of Company Options or other provisions with respect to the Company Options would jeopardize the Merger being accounted for as a "pooling of interests," then the Company shall, subject to Parent's written consent not to be unreasonably withheld, use reasonable best efforts to prevent such vesting or effect of other provisions. Except to the extent required pursuant to the current terms of such Company Options or other agreements as described in Section 1.7 of the Company Disclosure Schedule, the Company shall not take any action to accelerate the vesting of any Company Options. Prior to the Effective Time, the Board of Directors of Parent shall, for purposes of Rule 16b-3(d)(1) promulgated under Section 16 of the product Securities Exchange Act of 1934, and the rules and regulations thereunder (the "1934 Act"), specifically approve (i) the number assumption by Parent of Shares otherwise purchasable pursuant to such the Company Stock Option, multiplied by Options and (ii) the Exchange Ratio; provided, however, that issuance of Parent Common Stock in the case of any option Merger to which Section 421 directors, officers and stockholders of the Code applies by reason of its qualification under Company subject to Section 422 16 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code1934 Act.

Stock Options. (a) At As soon as practicable following the date of this Agreement, Target shall ensure that (i) each holder (each, an "Optionee") of an outstanding Target Stock Option shall have the right to irrevocably elect, subject to satisfaction of the conditions set forth in Section 6.01(d), to surrender, immediately prior to the acceptance for payment of shares of Target Common Stock pursuant to the Offer, any outstanding and unexercised Target Stock Option then held by the Optionee in exchange for a cash payment equal to (x) the excess, if any, of (A) the price per share of Target Common Stock to be paid pursuant to the Offer over (B) the exercise price per share of Target Common Stock subject to such Target Stock Option, multiplied by (y) the number of shares of Target Common Stock issuable pursuant to the unexercised portion of such Target Stock Option, less any tax withholding required by the Code or any provision of state or local law, payable not later than twenty days after the earlier of the satisfaction of the conditions set forth in Section 6.01(d) and five days after the Effective Time, (ii) each outstanding option or warrant Optionee shall have the right to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant purchase, effective as of the consummation of the Merger, subject to the Company's 1988 consummation of the Merger and in accordance with the terms of the relevant plan or document, all or any part of the shares of Target Common Stock subject to any Target Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangementheld by the Optionee, whether vested or unvested, and that each share of Target Common Stock so purchased shall be converted converted, as of the Effective Time into options Time, in the right to required the Merger Consideration, less any tax withholding received by the Code or warrantsany provision of state or local law, as applicable, to purchase shares of Parent Common and (iii) each Target Stock in accordance Option (with the terms of this Section 1.11. All plans or agreements described above pursuant respect to which any Company Stock Option an Optionee has been issued or may be issued other than outstanding warrants are referred to collectively not exercised one of the rights set forth in this section) shall terminate and expire as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the CodeTime.

Stock Options. (a) At As soon as practicable following the Effective Timedate of this Agreement, Parent and Company (or, if appropriate, any committee of the Board of Directors of Company administering Company's Amended and Restated Stock Option Plan and 1996 Stock Option Plan (collectively, the "Company Option Plans") shall take such action as may be required to effect the following provisions of this Section 1.04(a). The terms of each outstanding option or warrant granted by Company to purchase Shares shares of Company Common Stock under the Company Option Plans (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement), whether vested or unvested, shall be converted adjusted as of necessary to provide that at the Effective Time, each Company Stock Option outstanding immediately prior to the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock OptionOption (after giving effect to the existing provisions in the Company Option Plans or related option agreements that provide for the automatic acceleration of vesting upon consummation of a change of control of Company), a the same number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant Company Stock Option in full immediately prior to the Effective Time (assuming for this purpose that such option were then exercisable), at a price per share of Parent Common Stock equal to (xA) the aggregate exercise price for the Shares shares of Company Common Stock otherwise purchasable pursuant to such Company Stock Option option divided by (yB) the product of (i) the aggregate number of Shares otherwise shares of Parent Common Stock deemed purchasable pursuant to such Company Stock Option (each, as so adjusted, an "Adjusted Option"); provided that (after aggregating all the Shares of a holder subject to Company Stock Options) any fractional share of Parent Common Stock resulting from such calculation for such holder shall be rounded down to the nearest whole share; and provided further that, multiplied by (ii) the Exchange Ratio; provided, however, that in the case of any option Company Stock Option to which Section 421 of the Code applies by reason of its qualification under Section any of Sections 422 through 424 of the Code ("incentive qualified stock options" or "ISOs" ) ), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option Adjusted Option shall be determined in order such manner so as to comply with Section 424(a) 424 of the Code. Upon exercise of an Adjusted Option, a cash payment shall be made to the holder of such Adjusted Option for the fractional share of Parent Common Stock referred to in the preceding sentence. For purposes of determining the amount of such payment the price of the Parent Common Stock shall be the average closing price per share of the Parent Common Stock on the NYSE for the five trading days immediately prior to the date of exercise.

Stock Options. On the date Acquisition Sub purchases Shares pursuant to the Offer, each outstanding option to purchase Common Stock (aa "Stock Option") At granted under the Company's 1994 Long-Term Stock Incentive Plan or pursuant to any other employee stock option plan or agreement entered into by the Company with any employee of the Company or any subsidiary thereof and listed on Section 3.3 of the Company Disclosure Schedule (the "Company Stock Option Plan"), whether or not then exercisable, shall become exercisable, subject to the terms of the Company Stock Option Plan pursuant to which such Stock Option was issued. If and to the extent that a Stock Option shall not have been exercised at the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company such Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the automatically canceled. Each holder of such Company a canceled Stock Option would have been shall be entitled to receive pursuant as soon as practicable after the first date payment can be made without liability to such person under Section 16(b) of the Merger had Exchange Act from the Company in consideration for such holder exercised such option or warrant cancellation an amount in full immediately prior to the Effective Time at a price per share cash (less applicable withholding taxes) equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant shares of Common Stock previously subject to such Company Stock Option, Option multiplied by (ii) the Exchange Ratio; providedexcess, howeverif any, that of the Per Share Amount over the exercise price per share of Common Stock previously subject to such Stock Option (the "Option Consideration") upon surrender of such Stock Option to the Company or an affidavit of loss in the case form requested by Parent, together with such additional documentation as may be reasonably required by Parent or the Company. The surrender of a Stock Option in exchange for the Option Consideration in accordance with the terms of this Section 2.6(c) shall be deemed a release of any option and all rights the holder had or may have had in respect of such Stock Option. Prior to which the purchase by Acquisition Sub of Shares pursuant to the Offer, the Company shall use its reasonable best efforts to obtain all necessary consents or releases from holders of Stock Options under the Company Stock Option Plan and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section 421 2.6(c). Except as otherwise agreed to by the parties, the Company shall use its reasonable best efforts to assure that following the purchase by Acquisition Sub of Shares pursuant to the Offer no participant in the Company Stock Option Plan or other plans, programs or arrangements shall have any right thereunder to acquire any equity securities of the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option priceCompany, the number of shares purchasable pursuant Surviving Corporation or any subsidiary thereof and to terminate all such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codeplans.

Stock Options. (a) At or immediately prior to the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock each, an “Option" or collectively "Company Stock Options"”) issued pursuant to the Company's 1988 Stock outstanding under any employee plan that provides for equity-based compensation (each, an “Option Plan”) that is (i) then outstanding, 1990 Stock vested and exercisable (including for such purpose any such Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive that will vest and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of become exercisable at the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with its terms or in accordance with any applicable employment agreement or other Employee Plan) (collectively, the terms “Exercisable Options”) or (ii) not an Exercisable Option and that is held by a non-employee director of this Section 1.11. All plans or agreements described above pursuant to which any the Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as (collectively, together with the "Company Plans." Each Company Stock Option Exercisable Options, the “Cashout Options”) shall be deemed to constitute canceled, and the Company or a wholly-owned Subsidiary of the Company shall pay each holder of any such Option at or as soon as practicable after the Effective Time for each such Option an option to acquireamount in cash determined by multiplying (x) the excess, on if any, of the same terms and conditions as were Offer Price over the applicable under per Share exercise price of such Company Stock Option, a number of shares of Parent Common Stock equal to Option by (y) the number of shares of Parent Common Stock that the Shares such holder of such Company Stock Option would could have been entitled to receive pursuant to the Merger purchased had such holder exercised such option or warrant Option in full immediately prior to the Effective Time at Time; provided that such amounts payable with respect to Company 102 Options that are held by the 102 Trustee shall be paid to the 102 Trustee in accordance with the Israeli Options Tax Ruling, if obtained, and the Israeli Income Tax Ordinance. Section 3.05(a) of the Company Disclosure Schedule sets forth a price per share equal to (x) true and complete list of each Option that will vest and become exercisable as a result of the aggregate exercise price for transactions contemplated by this Agreement, assuming a Closing Date of July 31, 2011, including the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) holder thereof, the number of Shares otherwise purchasable pursuant subject to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that in the case grant date 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" ) the option price, the number of shares purchasable pursuant to such option Option and the terms and conditions of per-Share Option exercise of such option shall be determined in order to comply with Section 424(a) of the Codeprice.

Stock Options. (a) At the Effective Time, Company shall take all action necessary so that each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option whether or warrant in full not it is then vested or exercisable, shall be canceled immediately prior to the Effective Time, and shall thereafter represent (whether or not previously vested) only the right to receive from the Surviving Corporation, at the Effective Time at a price per share or as soon as practicable thereafter, in consideration for the option's cancellation, an amount in cash equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such shares of Company Common Stock Option, issuable upon exercise of the option multiplied by (ii) the Exchange Ratio; providedexcess, howeverif any, of the Common Stock Merger Consideration over the exercise price per share payable under the option, (with the amount payable subject to reduction for required withholding of taxes). Promptly following the execution of this Agreement, Company shall mail to each person who is a holder of an outstanding Company Stock Option (whether or not then vested or exercisable) a letter in a form acceptable to Parent describing the treatment of and payment for Company Stock Options pursuant to this Section 2.5(i) and providing instructions to use to obtain payment for the holder's Company Stock Options under this Agreement. These instructions shall require, inter alia, that as a condition of payment, the holder shall be required to deliver a release, in a form acceptable to Parent, by which the holder effectively relinquishes all rights in respect of the holder's Company Stock Options upon payment in accordance with this Section 2.5(i). The Surviving Corporation shall cause the Paying Agent, at the Effective Time or as soon as reasonably practicable thereafter, to deliver to such holder the amount of cash provided for in the case first sentence of this Section 2.5(i). Company shall take all actions necessary to cause all stock option, stock grant and stock purchase plans, and any option other plan, program or arrangement with respect to which Section 421 equity securities of Company or any Subsidiary, to be terminated effective as of the Code applies by reason Effective Time and to ensure that no Person shall have any rights thereunder to acquire equity securities of its qualification under Section 422 of Company, any Subsidiary, Parent or the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to Surviving Corporation after such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codetime.

Stock Options. (a) At Each grantee under any of the Effective Time, each outstanding option or warrant to purchase Shares CHK Legacy Equity Plans (i) who will be a "Company Stock Option" or collectively "Company Stock Options"SSE Employee and (ii) issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted who holds as of the Effective Time into options Distribution Date, one or warrantsmore CHK Options, shall receive, effective as of the last to occur of the Distribution Date and the Registration Statement Effectiveness Date, as applicable, to purchase shares of Parent Common Stock a replacement award in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to substitution for each such CHK Option (which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute cancelled), an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, purchase a number of shares of Parent SSE Common Stock under the SSE Equity Plan (each a “Replacement SSE Option”) having a value (calculated using the SSE Share Price) equal to the value of the CHK Common Stock subject to the CHK Option (calculated using the Pre-Distribution CHK Share Price). The number of shares of Parent SSE Common Stock that the holder of such Company Stock subject to a Replacement SSE Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share shall be equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant shares of CHK Common Stock subject to such Company Stock Option, a CHK Option as of the Distribution Date multiplied by (ii) a fraction, the Exchange Ratio; providednumerator of which is the Pre-Distribution CHK Share Price and the denominator of which is the SSE Share Price, however, that with the resulting number being rounded down to the nearest whole share. Each such Replacement SSE Option shall have the same comparative ratio of the exercise price to the SSE Share Price as the exercise price of each CHK Option to the Pre-Distribution CHK Share Price as provided under Code Section 424 and the applicable regulations thereunder. SSE shall be responsible for (i) the satisfaction of all tax reporting and withholding requirements in respect of the exercise of Replacement SSE Options issued in accordance with this Section 3.4(a) and (ii) remitting the appropriate tax or withholding amounts to the appropriate taxing authorities. Replacement SSE Options shall not be exercisable until the Registration Statement Effectiveness Date. Except as provided in the case foregoing provisions of any option this Section 3.4(a), Replacement SSE Options granted under this Section 3.4(a) shall be granted on terms which are in all material respects identical (including with respect to vesting) to the terms of the CHK Options with respect to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codethey replace.

Stock Options. (ai) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a the same number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time Time, at a price per share (rounded up to the nearest whole cent) equal to (xy) the aggregate exercise price for the Common Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (iz) the number of Shares otherwise full shares of Parent Common Stock deemed purchasable pursuant to such Company Stock Option, multiplied by (ii) Option in accordance with the Exchange Ratioforegoing; provided, however, that in the case of any option Company 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" ) applies, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to comply with satisfy the requirements of Section 424(a) of the Code; provided, further, that to the extent that Common Shares acquired upon exercise of a Company Option would be subject to vesting or other restrictions under the terms of the relevant Company Stock Plan under which such Company Option was issued ("Company Restricted Shares"), the number of shares of Parent Common Stock to be issued upon exercise of an assumed Company Option in accordance with the foregoing that bears the same ratio to the total shares of Parent Common Stock deemed purchasable pursuant to such assumed Company Option as the number of Company Restricted Shares bears to the total number of Company Shares issuable under such Company Option shall be subject to the same vesting and other restrictions as would be applicable to the Company Restricted Shares. 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 Parent pursuant to this Section.

Stock Options. (ai) At On the Effective TimeDate, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock ML Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangementwhich is then outstanding, whether vested or unvestednot exercisable, shall cease to represent a right to acquire shares of ML Common Stock and shall be converted as of the Effective Time automatically into options or warrants, as applicable, an option to purchase shares of Parent Sovereign Common Stock and the corresponding number of Sovereign Stock Purchase Rights, and Sovereign shall assume each ML Option, in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company the applicable ML Stock Option has been issued Plan and stock option agreement by which it is evidenced, except that from and after the Effective Date, (i) Sovereign and its Board of Directors or a duly authorized committee thereof shall be substituted for ML and ML's Board of Directors or duly authorized committee thereof administering such ML Stock Option Plan, (ii) each ML Option assumed by Sovereign may be issued other than outstanding warrants are referred to collectively as exercised solely for shares of Sovereign Common Stock and Sovereign Stock Purchase Rights, (iii) the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Sovereign Common Stock subject to such ML Option shall be equal to the number of shares of Parent ML Common Stock that the holder of subject to such Company Stock ML Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price Date multiplied by the Applicable Exchange Ratio, provided that any fractional shares of Sovereign Common Stock resulting from such multiplication shall be rounded down to the nearest share, and (iv) the per share equal to (x) the aggregate exercise price for under each such ML Option shall be adjusted by dividing the Shares otherwise purchasable pursuant to per share exercise price under each such Company Stock ML Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Applicable Exchange Ratio; provided, however, provided that in such exercise price shall be rounded up to the case of any option to which Section 421 nearest cent. Notwithstanding clauses (iii) and (iv) of the Code applies by reason of its qualification under Section 422 of the Code (preceding sentence, each ML Option which is an "incentive stock optionsoption" 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 "ISOs" ) renewal of the option price, within the number meaning of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a424(h) of the CodeIRC. Sovereign and ML agree to take all necessary steps to effect the foregoing provisions of this Section 1.02(f).

Stock Options. (a) At The Company has reserved 1,066,824 shares of Common Stock for issuance under the Effective TimeStock Plans, each of which options with respect to 953,281 shares are outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms date of this Agreement. Section 1.11. All plans 2.2(b) of the Disclosure Schedule accurately sets forth, with respect to each Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Option and whether such holder is an employee or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as non-employee; (ii) the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a total number of shares of Parent Common Stock equal that are subject to such Option and the number of shares of Parent Common Stock that with respect to which such Option is immediately exercisable; (iii) the holder date on which such Option was granted and the term of such Company Stock Option; (iv) the vesting schedule for such Option would have been entitled and whether the vesting of such Option shall be subject to receive pursuant to any acceleration in connection with the Merger had such holder exercised such option or warrant in full immediately prior to any of the Effective Time at a other transactions contemplated by this Agreement; (v) the exercise price per share equal to of Common Stock purchasable under such Option; and (xvi) the aggregate exercise price for the Shares otherwise purchasable pursuant to whether such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that is an “incentive stock option” as defined 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 or subject to Section 409A of the Code. Each grant of an Option was duly authorized no later than the date on which the grant of such Option was by its terms to be effective ("incentive stock options" the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the board of directors of the Company (or "ISOs" a duly constituted and authorized committee thereof) and any required stockholder approval by the option pricenecessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto, each such grant was made in compliance with the terms of the applicable compensation plan or arrangement of the Company and all other applicable Legal Requirements, the number per share exercise price of shares purchasable pursuant each Option was equal to such option and or greater than the terms and conditions fair market value of exercise a share of such option shall be determined Common Stock on the applicable Grant Date and, except as set forth in order to comply with Section 424(a2.2(b) of the CodeDisclosure Schedule, each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company and each Option qualifies for the Tax treatment afforded to such Option in the Tax Returns of the Company. All options with respect to shares of Common Stock that were ever issued by the Company ceased to vest on the date on which the holder thereof ceased to be an employee of or a consultant to the Company. The exercise of the Options and the payment of cash in respect thereof complied and will comply with the terms of the Stock Plans, all Contracts applicable to such Options and all applicable Legal Requirements and, as of the Effective Time, no former holder of an Option will have any rights with respect to such Option other than the rights contemplated by Section 1.6(a). The Company has delivered to Parent accurate and complete copies of the Stock Plans, each form of agreement used thereunder and each Contract pursuant to which any Option is outstanding.

Stock Options. Each option (aan "Option") At the Effective Time, each outstanding option or warrant to purchase Shares (a "issued ------------- by the Company Stock which is outstanding at the Effective Time shall be cancelled by virtue of the Merger, without consideration except as provided in this Section 2.6, and shall cease to exist. Each holder of an Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvestednot immediately exercisable, shall be converted as entitled to receive, for each Share issuable on exercise of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock an amount in cash equal to the number excess of shares of Parent (x) the Common Stock that Consideration over (y) the holder per Share exercise price of such Company Stock the Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant as in full effect immediately prior to the Effective Time Time. The consideration due under this Section 2.6 shall be payable without interest after (a) verification by the Paying Agent of the ownership and terms of the particular Option by reference to the Company's records, and (b) delivery in the manner provided in Section 2.8 of a written instrument duly executed by the owner of the applicable Option, in a form provided by the Paying Agent and setting forth (i) the aggregate number of Options owned by that person and their respective issue dates and exercise prices; (ii) a representation by the person that he or she is the owner of all Options described pursuant to clause (i), and that none of those Options has expired or ceased to be exercisable; and (iii) a confirmation of and consent to the cancellation of all of the Options described pursuant to clause (i). Each holder of an Option who is a participant in the Company's Special Executive Deferred Compensation Plan may elect before the Offer commences to surrender any Option that is not immediately exercisable at the time of the holder's election and receive, for each Share that would have been issuable on exercise of such Option, a price per share credit in the Special Executive Deferred Compensation Plan equal to the excess of (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Common Stock Option divided by Consideration over (y) the product per Share exercise price of (i) the number Option as in effect at the time of Shares otherwise purchasable the election. Such credit shall be funded pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that in the case change of any option to which Section 421 control provisions of the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the CodeSpecial Executive Deferred Compensation Plan.

Stock Options. (a) At the Effective Time, by virtue of the First Step Merger and without any action on the part of the holders of Company Options, each Company Option that is outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant immediately prior to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangementEffective Time, whether or not then vested or unvestedexercisable, shall be assumed by Parent (the “Assumed Options”) and converted as of automatically at the Effective Time into options or warrants, as applicable, to purchase an option denominated in shares of Parent Common Stock and which has other terms and conditions substantially identical to those of the related Company Option except that (i) each Assumed Option will be exercisable (or will become exercisable in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Parent Common Company Stock that the holder were issuable upon exercise of such Company Stock Assumed Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price multiplied by the Option Exchange Ratio (as defined below), rounded down to the nearest whole number of shares of Parent Stock and (ii) the per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant shares of Parent Stock issuable upon exercise of such Assumed Option will be equal to such the quotient determined by dividing the exercise price per share of Company Stock at which such Assumed Option divided was exercisable immediately prior to the Effective Time by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Option Exchange Ratio, rounded up to the nearest whole cent; provided, however, that in no case shall the case exchange of any option to which a Company Option be performed in a manner that is not in compliance with the adjustment requirements of Section 421 409A of the Code applies by reason of its qualification under Section 422 of Code. The “Option Stock Amount” means the Code ("incentive stock options" or "ISOs" ) the option price, the aggregate number of shares purchasable of Parent Stock issuable pursuant to this Section 2.6(a). The “Option Exchange Ratio” means (i)(A) 0.267008, multiplied by (B) the Elected Stock Percentage; plus (ii) (A) the quotient obtained by dividing $7.30 by the closing sale price for Parent Stock on the NASDAQ for the last trading day immediately prior to the Closing Date, multiplied by (B) the Elected Cash Percentage. The Company agrees that the assumption and adjustment of Company Options in accordance with this Section 2.6(a) shall preserve the compensation element of each Company Option as of the Effective Time. Notwithstanding the foregoing, unless determined otherwise by Parent, each Company Option that is held by a person who is not an employee of, or a consultant to, the Company or any Subsidiary of the Company immediately prior to the Effective Time (the “Non-Assumed Options”) shall not be assumed by Parent pursuant to this Section 2.6 and shall, immediately prior to the Effective Time, be canceled and extinguished and the vested portion thereof shall automatically be converted into the right to receive an amount in cash, if any, equal to the product obtained by multiplying (i) the aggregate number of shares of Company Stock that were issuable upon exercise or settlement of such Non-Assumed Options immediately prior to the Effective Time (for these purposes, after giving effect to any applicable vesting acceleration provisions) and (ii) $7.30, less any per share exercise price of such Non-Assumed Options. All Company Options held by non-employee members of the Board of Directors of the Company shall be Non-Assumed Options for purposes of this Agreement and converted into the right to receive cash pursuant to the immediately preceding sentences. The Company shall at least thirty (30) days prior to the Effective Time provide a notice to all holders of Assumed Options and Non-Assumed Options of the effect of the transaction on their options. The Company shall also provide notice that all holders of outstanding Company Options which as of the Effective Time will be Non-Assumed Options have the opportunity to exercise their vested options on or before the termination date of the option and during a specified period prior to the Effective Time, and that upon a failure to so exercise a Non-Assumed Option, each Non-Assumed Option outstanding immediately prior to the Effective Time will be extinguished and converted into a right to receive cash in accordance with this section. Parent shall take such actions as are necessary for the assumption and conversion of the Company Options pursuant to this Section 2.6, including the reservation, issuance and listing of Parent Stock as is necessary to effectuate the transactions contemplated by this Section 2.6. As soon as reasonably practicable after the Effective Time, Parent shall deliver to each holder of any Company Option an appropriate notice setting forth such holder’s rights pursuant to such option Company Option. Parent shall prepare and file with the terms and conditions SEC a registration statement on Form S-8 with respect to the shares of Parent Stock issuable upon exercise of the Assumed Options promptly (but in no event later than fifteen (15) Business Days) following the Effective Time and Parent shall exercise commercially reasonable efforts to maintain the effectiveness of such option registration statement for so long as such Assumed Options remain outstanding. The Company and its counsel shall be determined reasonably cooperate with and assist Parent in order the preparation of such registration statement prior to comply with Section 424(a) of the CodeEffective Time.

Stock Options. (a) At or immediately prior to the Effective Time, each outstanding option Company Option (defined below) which is vested or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued which pursuant to the Company's 1988 terms of the relevant Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, Plan (defined below) become vested by virtue of the Offer or other agreement or arrangement, whether vested or unvested, the Merger shall be converted as canceled, and each holder of any such option shall be paid by the Company promptly after the Effective Time into options or warrantsfor each such option an amount determined by multiplying (i) the excess, as applicableif any, to purchase shares of Parent Common Stock in accordance with $29.25 per Share over the terms applicable exercise price of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an such option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to by (ii) the number of shares of Parent Common Stock that the Shares such holder of such Company Stock Option would could have been entitled to receive pursuant to the Merger purchased had such holder exercised such option or warrant in full immediately prior to the Effective Time (as if such Company Option was exercisable in full); subject to the limitations set forth in an amendment to certain option agreements (true and complete copies of which have been provided to Parent) with respect to the Company Options issued in 1999. The Company shall take such action or, if required, shall amend each of the Company's Stock Plans that do not provide for the vesting of unvested Company Options by virtue of the Offer or the Merger so that, at a price the Effective Time, each of the then outstanding unvested Company Options shall by virtue of the Merger, and without any further action on the part of any holder thereof, be assumed by Parent and converted into an option to purchase that number of shares of common stock, par value $.10 per share equal ("PARENT COMMON STOCK"), of Parent determined by multiplying the number of Shares subject to such Company Option at the Effective Time by the quotient obtained by dividing (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided $29.25 by (y) the product average closing price of Parent Common Stock on the New York Stock Exchange Composite Tape for the 30 consecutive trading days immediately prior to the Effective Time (isuch quotient, the "CONVERSION NUMBER"), at an exercise price per share of Parent Common Stock equal to the quotient obtained by dividing (x) the number exercise price per Share of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied Option immediately prior to the Effective Time by (iiy) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code.the

Stock Options. Prior to the Effective Time, the Company shall take all actions necessary to provide, effective as of the Effective Time, for the cancellation, on the terms and conditions set forth in this Section 1.08(a) and without any payment therefor except as otherwise provided in this Section 1.08(a), of all outstanding options to purchase Common Shares (aeach, a “Stock Option”) At outstanding at the Effective Time (whether or not then vested or exercisable). As of the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed cancelled (and to constitute an option the extent formerly so vested or exercisable shall no longer be vested or exercisable) and shall entitle each holder thereof, in cancellation and settlement therefor, to acquirereceive a payment, on if any, in cash from the same terms and conditions Company (less any applicable withholding taxes), as were applicable under such Company Stock Optionpromptly as reasonably practicable following the Effective Time, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant amount, if any, by which the Merger Consideration exceeds the exercise price per share with respect to such Company Stock OptionOptions, multiplied by (ii) the Exchange Ratio; providedtotal number of Common Shares then issuable upon the exercise of such Stock Options (whether or not then vested or exercisable). Each Stock Option, howeverwhen cancelled pursuant to this Section 1.08(a), that shall no longer represent the right to acquire Company Shares and shall represent the right to receive the cash consideration, if any, as set forth in this Section 1.08(a). Notwithstanding the case of any option foregoing, no Stock Option shall be subject to which this Section 421 1.08(a), if, in accordance with its terms, upon consummation of the Code applies by reason of its qualification under Section 422 of the Code Merger, ("incentive stock options" or "ISOs" i) the option priceexercise price per Company Share of such Stock Option will be greater than the Merger Consideration per Company Share and (ii) the holder of such Stock Option will be entitled to receive, upon exercise of such Stock Option, only the Merger Consideration multiplied by the number of shares purchasable Company Shares subject to such Stock Option. For the avoidance of doubt, in the event that a Stock Option is forfeited by its terms prior to the Effective Time, the holder thereof shall not be entitled to any payment in respect of such Stock Option pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with this Section 424(a1.08(a) of the Codeor otherwise.

Stock Options. (a) At Immediately prior to the Effective Time, each subject to obtaining any consent which may be necessary from the holder of the outstanding option or warrant options, the Company shall cancel and settle, by cash payment to the holders thereof (the "Option Settlement Amount"), all the outstanding options to purchase Shares shares of Common Stock (a "Company Stock Option" whether or collectively "Company Stock Options"not such options are currently exercisable or vested) issued pursuant to which have heretofore been granted under the following stock plans and agreements of the Company's 1988 : (i) Foodbrands America, Inc. 1992 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Incentive Plan, as amended, 1997 (ii) Foodbrands America, Inc. Associate Stock Option Purchase Plan, as amended(iii) Foodbrands America, 1994 Outside Director Inc. Nonqualified Associate Stock Option Purchase Plan, Key Executive (iv) Deferred Stock Option PlanCompensation Plan for the non-employee directors of Foodbrands, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as (v) the 25,000 options issued to certain directors of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above Company pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants option agreements dated April 27, 1995. (Such plans and agreements are referred to herein collectively as the "Company Stock Option Plans." Each Company ") Except as otherwise provided pursuant to the terms of the Stock Option Plans in clauses (ii) and (iii) above, such Option Settlement Amount with respect to each cancelled option shall be deemed to constitute in an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock amount equal to the excess, if any, of the Merger Consideration over the per share exercise price of such cancelled option, multiplied by the number of shares of Parent Common Stock into which such cancelled option would be exercisable, less any amounts that the Company is required to withhold and pay over to any federal and state, local or other tax authorities under applicable law with respect to such Option Settlement Amount. The remaining proceeds, if any, will be paid to the option holder in cash. Such cash settlement shall constitute full performance of such Company the Company's obligations under the Stock Option would have been entitled Plans and any related stock option agreements. Except as otherwise agreed to receive pursuant to by the Merger had such holder exercised such option parties, the Stock Option Plans shall terminate before or warrant in full immediately prior to as of the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the CodeTime.

Stock Options. (a) At the Effective Time, each holder of a then outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to under the Company's 1988 1985 Stock Option Plan and 1994 Long Term Incentive Plan (collec- tively, the "Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement"), whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as not then exercisable (the "Company Plans." Each Company Stock Option"), shall, in settlement thereof, represent the right to receive for each Share subject to such Option shall be deemed an amount (subject to constitute an option to acquire, on the same terms and conditions as were any applicable under such Company Stock Option, a number of shares of Parent Common Stock withholding tax) in cash equal to the number of shares of Parent Common Stock that difference between the holder Offer Consideration and the per Share exercise price of such Company Stock Option would have been entitled to receive pursuant to the Merger had extent such holder exercised difference is a positive number (such option or warrant in full immediately prior amount being hereinafter referred to as, the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock "Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange RatioConsideration"); provided, however, that in the case of with respect -------- ------- to any option person subject to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a16(a) of the CodeExchange Act, any such amount shall, at the written request of such Person, 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. Upon receipt of the Option Consideration, the Option shall be canceled. The surrender of an Option to the Company in exchange for the Option Consideration shall be deemed a release of any and all rights the holder had or may have had in respect of such Option. Prior to the Effective Time, the Company shall use its commercially reasonable best efforts to obtain all necessary consents or releases from holders of Options under the Stock Option Plans and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section 3.5 (except for such action that may require the approval of the Company's stockholders). Except as otherwise agreed to by the parties, (i) all Stock Option Plans shall terminate as of the Effective Time and the provisions in any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company any Subsidiary thereof, shall be canceled as of the Effective Time, and (ii) the Company shall take all action necessary to ensure that following the Effective Time no participant in any Stock Option Plan or other plans, programs or arrangements shall have any right thereunder to acquire equity securities of the Company, the Surviving Corporation or any Subsidiary thereof and to terminate all such plans.

Stock Options. (a) At the Effective Time, each outstanding ------------- option or warrant to purchase Shares shares of Common Stock (a an "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement), whether vested or unvested, shall be converted as of assumed by the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option and shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of as if each share underlying such Company option were exchanged for Parent Common Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior Section 4.1(e) (i) (rounded up to the Effective Time nearest whole number), at a price per share (rounded down to the nearest whole cent) equal to (xy) the aggregate exercise price for the Shares shares of Common Stock otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (iz) the number of Shares otherwise full shares of Parent Common Stock deemed purchasable pursuant to such Company Stock Option, multiplied by (ii) Option in accordance with the Exchange Ratioforegoing; provided, -------- however, that in the case of any option 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" ) ------- applies, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in accordance with the foregoing, with the exceptions that the number of shares of Parent Common Stock shall be rounded down to the nearest whole share and the purchase price per share shall be rounded up to the nearest cent, and further subject to such adjustments as are necessary in order to comply with satisfy the requirements of Section 424(a) of the CodeCode and the regulations promulgated thereunder. At or prior to the Effective Time, the Company shall make all necessary arrangements to permit the assumption of the unexercised Options by the Parent pursuant to this Section.

Stock Options. At the first regularly scheduled meeting of the Board following the date upon which Employer closes an equity financing, in a single transaction or series of related transactions, of at least $15,000,000 (a “Financing”), Employer shall grant Employee a stock option under RXi Pharmaceuticals Corporation’s 2007 Incentive Plan (the “Plan”) to purchase a number of shares of Employer’s common stock equal to 3/70th of the number of shares of Employer’s common stock held by CytRx immediately prior to the Financing (the “Option”). The Option shall vest and become exercisable in 36 equal monthly installments beginning on the one-month anniversary of the date of grant, in each case, that Employee remains in the continuous employ of Employer through such anniversary date. The Option shall (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant be exercisable at an exercise price equal to the Company's 1988 Stock Option Planfair market value at the time of granting as determined by Employer, 1990 Stock Option Plan(b) have a term of ten years, 1992 Key Executive Stock Option Planand (c) be on such other terms as shall be determined by Employer’s Board of Directors (or the Compensation Committee of the Board) and set forth in a customary form of stock option agreement under the Plan evidencing the Option. Notwithstanding anything to the contrary in Section 6.2 or other provisions of this Agreement or of the stock option agreement evidencing the Option, 1993 Employee Qualified Stock Purchase Planin the event that either (a) a Covered Transaction as defined in the Plan occurs or (b) CytRx votes its shares of capital stock of Employer to elect individuals who are (i) employees, 1996 Supplemental Stock Planofficers or directors of CytRx, as amended(ii) employees, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Planofficers or directors of any entity that has a contractual business relationship with CytRx, or other agreement (iii) employees, officers, directors of any entity that has a contractual business relationship with any officer or arrangementdirector of CytRx (collectively, whether vested or unvested, shall be converted as “Affiliates”) to constitute a majority of the Effective Time into options or warrantsEmployer’s Board of Directors, the Option shall thereupon vest in full and become exercisable as applicable, to purchase all of the shares of Parent Common Stock covered thereby in accordance with the terms of this Section 1.11the Plan. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as Furthermore, in the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock event that the holder Employee is terminated without Cause or resigns for Good Reason, the shares that would have vested during the Severance Period (as defined in Section 6.2 below) shall vest and become exercisable as of the date of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codetermination.

Stock Options. (a) At the Effective Time, each outstanding option option, warrant or warrant other right to purchase Shares (a "Company Stock Option" or collectively and collectively, "Company Stock Options") issued pursuant to the Company's 1988 1999 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Plan for Non-Employee Qualified Stock Purchase PlanDirectors and Advisors, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director 1989 Stock Option Plan, Key Executive as amended, and 1996 Directors' Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified all other agreements or arrangements other than the 1996 Employee Stock Option Purchase Plan, or other agreement or arrangement, whether vested or unvested, shall be assumed by Parent and converted as of the Effective Time into options an option, warrant or warrantsright, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants or rights are referred to collectively as the "Company Plans." Each Company Stock Option so converted shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option Company Stock Option, whether or warrant not vested, in full immediately prior to the Effective Time rounded down to the nearest whole share at a price per share share, rounded up to the nearest tenth of a cent, equal to (x) the aggregate exercise price for the Shares otherwise purchasable per Share pursuant to such Company Stock Option immediately prior to the Effective Time divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that in the case of any option to which Section 421 of the Code applies by reason of its qualification under Section Sections 422 through 424 of the Code ("incentive stock options" or "ISOs" ) Code, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined adjusted as necessary in order to comply with Section 424(a) of the Code.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, Award that is a stock option to purchase shares of Parent Company Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any (each a “Company Stock Option has been issued Option”) that is outstanding immediately prior to the Effective Time and is held by a Continuing Service Provider, whether or may not then vested or exercisable (each, an “Assumed Option”) shall be issued other than outstanding warrants are referred assumed by Parent and converted into an option to collectively acquire a number of shares of Parent Class A Common Stock, as the "Company Plans." provided herein. Each Company Stock such Assumed Option shall be deemed subject to constitute an option to acquire, on the same terms and conditions as were applicable under such applied to the Company Stock OptionOption immediately prior to the Effective Time, a number of shares of Parent Common Stock equal to including the vesting schedule applicable thereto, except that (A) the number of shares of Parent Class A Common Stock that subject to such Assumed Option shall be equal to the holder product obtained by multiplying (x) the number of shares of Company Common Stock subject to such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full as of immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product Option Exchange Ratio (with the resulting number rounded down to the nearest whole share of Parent Class A Common Stock), and (iB) the number per share exercise price of Shares otherwise purchasable pursuant each Assumed Option shall be equal to the quotient obtained by dividing (x) the per share exercise price at which such Company Stock Option, multiplied Assumed Option was exercisable immediately prior to the Effective Time by (iiy) the Option Exchange Ratio; provided, however, that in Ratio (with the case of any option resulting price per share rounded up to which Section 421 the nearest whole cent). It is the intention of the Code applies by reason of its qualification under parties that each Assumed Option that qualified as a United States-based incentive stock option (as defined in Section 422 of the Code ("incentive stock options" or "ISOs" Code) shall continue to so qualify, to the option pricemaximum extent permissible, following the number Effective Time, and further, that the assumption of shares purchasable pursuant to such option and the terms and conditions of exercise of such option Assumed Options shall be determined effected in order to comply with a manner that satisfies the requirements of Section 409A and 424(a) of the CodeCode and the Treasury Regulations promulgated thereunder, and this Section 2.7(d)(i) will be construed consistent with this intent. Each Company Stock Option that is outstanding immediately prior to the Effective Time and is held by a Person that is not a Continuing Service Provider shall not be assumed by Parent and by virtue of the Merger and without any further action on the part of Parent, Merger Sub One, Merger Sub Two, the Company or the holder thereof, shall be cancelled and shall have no further effect following the Effective Time. The Company shall take all actions reasonably necessary to cause each Company Stock Option held by a Person that is not a Continuing Employee to be cancelled and terminated as of the Effective Time, either pursuant to its terms or pursuant to an agreement with the holder thereof.

Stock Options. The Company shall (a) At terminate the Company's Non-statutory Stock Option Plan (as amended and restated effective as of June 10, 1997, and as subsequently amended), Amended and Restated 1993 Non-officer Employee Stock Option Plan, 1994 Director Stock Option Plan, and Amended and Restated 1996 Director Stock Plan (as amended by Amendment No. 1 effective as of July 9, 2004) (collectively, the "Company Stock Plans"), immediately prior to the Effective Time without prejudice to the rights of the holders of options (each, a "Company Stock Option") awarded pursuant thereto, (b) following such termination grant no additional options under the Company Stock Plans or permit the receipt of shares of Company Common Stock, and (c) cause each Company Stock Option that is outstanding immediately prior to the consummation of the Merger to become fully vested and exercisable. Prior to the Effective Time, the Company and Parent will take all actions reasonably necessary to provide that, upon the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed cancelled automatically and at the Effective Time shall be converted into and constitute the right to constitute receive cash in an option amount equal (less any applicable withholding and without interest) to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a product of (1) the total number of shares of Parent Company Common Stock equal subject to the number of shares of Parent Common Stock that the holder of such holder's Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full Options immediately prior to the Effective Time at a and (2) the excess, if any, of the Per Share Consideration over the exercise price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant of Company Common Stock subject to such Company Stock Option divided by or Options (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock each, an "Eligible Option, multiplied by (ii) the Exchange Ratio; provided, however, that in the case of any option to which Section 421 "). No payment of the Code applies Per Share Consideration with respect to an Eligible Option shall be made by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) Disbursing Agent to the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise holder of such Eligible Option until receipt by the Disbursing Agent of an option shall be determined cancellation agreement, in order a form mutually and reasonably acceptable to comply the Company and Parent, with Section 424(a) respect to all Eligible Options owned by the holder of the Codesuch Eligible Option.

Stock Options. The Company shall not grant to any non-employees, including non-employee members of the Board of Directors (a) At the Effective Time"Directors"), each outstanding option and former employees (collectively "NON-EMPLOYEES"), or warrant to any current employees any options to purchase Shares, stock appreciation rights, restricted stock, restricted stock units or any other real or phantom stock or stock equivalents on or after the date of this Agreement except as set forth in Attachment A to Schedule 4.2(a). Options to acquire Shares which are outstanding as of the date of this Agreement and which were granted to employees or Non-Employees under any stock option plan, program or similar arrangement of the Company or any Subsidiaries (a "Company Stock Option" Options"), other than Options described in Sections 2.10 and 2.11, shall be treated as follows: (i) Each current employee as of the date of this Agreement whose annual base salary as of the date of this Agreement is $80,000 or collectively more ("Company Stock Key Employee") and who is holding Options which have an exercise price ("Exercise Price") less than the Closing Price (as defined below) ("In the Money Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether which are vested or unvested, shall be converted as of the Effective Time into options or warrantsClosing Date shall be given the opportunity by the Company to make an irrevocable election on a grant by grant basis to be effective immediately following the Closing Date to receive in exchange for cancellation of each such vested In the Money Option either (A) a credit to an individual deferred compensation book account equal to the excess of the Closing Price of a Share over the Exercise Price of such In the Money Option times the number of Shares subject to such In the Money Option, as applicable, such deferred compensation book account to purchase shares of Parent Common Stock in accordance with have the terms of this Section 1.11. All plans described below, or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute (B) an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, purchase a number of shares of Parent Common Stock common stock (a "Parent Option") equal to 150% of the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant Shares subject to the Merger had such holder exercised such option or warrant in full immediately prior to Key Employee's In the Effective Time at a price per share equal to Money Option; provided that (x) the aggregate exercise price for Parent Option received in the Shares otherwise purchasable pursuant to such Company Stock exchange shall be fully vested and have the same expiration date as the vested In the Money Option divided by exchanged therefor, (y) the product Exercise Price of the Parent Option shall equal the Fair Market Value (as defined below), and (z) the Parent Option shall be governed by the provisions of the GTE Corporation 1997 Long-Term Incentive Plan ("LTIP") and by applicable LTIP award agreements. For purposes of this Section 2.9(i), the deferred compensation book account shall be denominated in Parent phantom stock units, and dividend equivalent payments shall be credited to such deferred compensation book account at such time and in such manner as dividends are paid on Parent common stock. Before the third anniversary of the day of the Closing Date, no distribution may be made in respect of the deferred compensation book account to a Key Employee who is employed by Parent or an affiliate of Parent. The dividend equivalent payments on the deferred compensation book account shall be subject to forfeiture in the event the Key Employee is not employed by Parent or an affiliate of Parent on any date that precedes the third anniversary of the day of the Closing Date. Parent shall determine administrative procedures and provisions with regard to the deferred compensation book account. In the event a Key Employee does not make an irrevocable election described in this Section 2.9(i) before the Closing Date, the Key Employee shall be deemed to have irrevocably elected the deferred compensation book account credit as described in clause (A) above and all In the Money Options shall be canceled. For purposes of this Section 2.9, Section 2.10, and Section 2.11, (i) "Closing Price" shall mean the number purchase price per share of the Shares otherwise purchasable pursuant to such Company Stock Optionas set forth in Section 1.1(a), multiplied by (ii) "Fair Market Value" shall mean the average of the high and low sales price of the Parent common stock on the composite tape of the New York Stock Exchange Ratio; providedissues as of the Closing Date, howeveror, that in the case of any option to which Section 421 of event that no trading occurs on such day, then the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option applicable value shall be determined in order to comply with Section 424(aon the last preceding day on which trading took place and (iii) "Closing Date" shall mean the day of the Code.consummation of the Offer. (ii) Each current employee whose annual base salary as of the date of this Agreement is less than $80,000 ("Employee") who is holding In the Money Options which are vested as of the 5

Stock Options. (ai) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to under the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a the same number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time and the Shares received in such exercise been deemed to be Stock Election Shares (without regard to any proration thereof) (rounded down to the nearest whole number), at a price per share (rounded up to the nearest whole cent) equal to (xy) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (iz) the number of Shares otherwise full shares of Parent Common Stock deemed purchasable pursuant to such Company Stock Option, multiplied by (ii) Option in accordance with the Exchange Ratioforegoing; provided, however, that in the case of any option Company Option which is intended to which Section 421 of the Code applies by reason of its qualification under be an "incentive stock option" (as defined in Section 422 of the Code ("incentive stock options" or "ISOs" ) Code), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to comply with satisfy the requirements of Section 424(a) of the Code. At or prior to the Effective Time, the Company shall make all necessary arrangements to permit the assumption of the unexercised Company Options by Parent pursuant to this Section.

Stock Options. (a) At Except as provided in (b) below with respect to the Company's Employee Stock Purchase Plan, each option to purchase shares of Company Common Stock that is outstanding at the Effective Time, each outstanding option whether or warrant to purchase Shares not exercisable and whether or not vested (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant shall, by virtue of the Merger and without any action on the part of the Company or the holder thereof, be assumed by Parent in such manner that Parent (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 and the regulations thereunder or (ii) to the extent that Section 424 of the Code does not apply to any such Company Option, would be such a corporation were Section 424 of the Code applicable to such Company Option. Prior to the Effective Time, the Company's 1988 Stock Option PlanBoard of Directors and Compensation Committee thereof shall adopt resolutions preventing the value of any outstanding Company Options, 1990 Stock Option Planstock appreciation rights, 1992 Key Executive Stock Option Planrestricted stock, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, performance units or other agreement or arrangement, whether vested or unvested, shall be converted as of stock based awards from being paid in cash to the holders thereof. From and after the Effective Time into options or warrantsTime, as applicable, all references to purchase shares of Parent Common Stock the Company in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option Options shall be deemed to constitute an option refer to acquire, on Parent. The Company Options assumed by Parent shall be exercisable upon the same terms and conditions as were applicable under the Company Options (including provisions regarding vesting and the acceleration thereof, and if and to the extent caused by and in accordance with the current terms of a Company Option, such Company Stock Option, a number Option shall vest fully as of shares of the date on which the Merger is approved by the Company's shareholders) except that (i) such Company Options shall entitle the holder to purchase from Parent Common Stock equal to the number of shares of Parent Common Stock that (rounded down to the holder nearest whole number of such shares) that equals the product of the Conversion Ratio multiplied by the number of shares of Company Common Stock subject to such Company Option would have been entitled to receive pursuant immediately prior to the Merger had such holder exercised such Effective Time, and (ii) the option or warrant exercise price per share of Parent Common Stock shall be an amount (rounded up to the nearest full cent) equal to the option exercise price per share of Company Common Stock in full effect immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (ythe Conversion Ratio. Prior to the Effective Time, the Board of Directors of the Parent shall, for purposes of Rule 16b-3(d)(1) promulgated under Section 16 of the product of 1934 Act, specifically approve (i) the number assumption by Parent of Shares otherwise purchasable pursuant to such the Company Stock Option, multiplied by Options and (ii) the Exchange Ratio; provided, however, that issuance of Parent Common Stock in the case Merger to directors, officers and shareholders of the Company subject to Section 16 of the 1934 Act. As promptly as practicable after the Effective Time, Parent shall issue to each holder of a Company Option a written instrument informing such holder of the assumption by Parent of such Company Option. As soon as reasonably practicable after the Effective Time (and in any event no later than five business days after the Effective Time), Parent shall file a registration statement on Form S-8 (or any successor form) with respect to such shares of Parent Common Stock and shall use its best efforts to maintain such registration statement (or any successor form), including the current status of any option related prospectus or prospectuses, for so long as the Company Options remain outstanding. In addition, Parent shall use all reasonable efforts to which Section 421 cause the shares of Parent Common Stock subject to Company Options to be listed on the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the NYSE and such other exchanges as Parent shall determine. Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares purchasable of Parent Common Stock for delivery upon exercise of Company Options pursuant to such option and the terms and conditions of exercise of such option shall be determined set forth in order to comply with this Section 424(a) of the Code1.7.

Stock Options. (a) At Except as provided below with respect to the Company's Employee Stock Purchase Plan, each option to purchase shares of Company Common Stock that is outstanding at the Effective Time (a "Company Option") shall, by virtue of the Merger and without any action on the part of the holder thereof, be assumed by Parent (and a registration statement on Form S-8 therefor shall be filed promptly after the Effective Time) in such manner that Parent (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 and the regulations thereunder or (ii) to the extent that Section 424 of the Code does not apply to any such Company Option, would be such a corporation were Section 424 of the Code applicable to such Company Option. From and after the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant all references to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of Company in the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option Options shall be deemed to constitute an option refer to acquire, on Parent (other than for purposes of determining whether there has been a change in control of the Company). The Company Options assumed by Parent shall be exercisable upon the same terms and conditions as were applicable under the Company Options (including provisions thereof, if any, relating to the acceleration of vesting upon a change in control of the Company) except that (i) such Company Stock Option, a number of shares of Options shall entitle the holder to purchase from Parent Common Stock equal to the number of shares of Parent Common Stock that (rounded to the holder nearest whole number of such shares) that equals the product of the Conversion Fraction multiplied by the number of shares of Company Common Stock Option would have been entitled subject to receive pursuant such option immediately prior to the Merger had such holder exercised such Effective Time, and (ii) the option or warrant exercise price per share of Parent Common Stock shall be an amount (rounded to the nearest full cent) equal to the option exercise price per share of Company Common Stock in full effect immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange RatioConversion Fraction; provided, however, that in the case of any option Company 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" ) ), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option options shall be determined in order to comply with Section 424(a) of the Code. As promptly as practicable after the Effective Time, Parent shall issue to each holder of a Company Option a written instrument informing such holder of the assumption by Parent of such Company Option.

Stock Options. (ai) At On the Effective TimeDate, each option to acquire Peoples Common Stock which is then outstanding option or warrant to purchase Shares (a "Company Stock Peoples Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement), whether vested or unvestednot exercisable, shall cease to represent a right to acquire shares of Peoples Common Stock and shall be converted as of the Effective Time automatically into options or warrants, as applicable, an option to purchase shares of Parent Sovereign Common Stock and the corresponding number of Sovereign Stock Purchase Rights, and Sovereign shall assume each Peoples Option, in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company the applicable Peoples Stock Option has been issued Plan and stock option agreement by which it is evidenced, except that from and after the Effective Date, (i) Sovereign and its Board of Directors or a duly authorized committee thereof shall be substituted for Peoples and Peoples' Board of Directors or duly authorized committee thereof administering such Peoples Stock Option Plan, (ii) each Peoples Option assumed by Sovereign may be issued other than outstanding warrants are referred to collectively as exercised solely for shares of Sovereign Common Stock and Sovereign Stock Purchase Rights, (iii) the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Sovereign Common Stock subject to such Peoples Option shall be equal to the number of shares of Parent Peoples Common Stock that the holder of subject to such Company Stock Peoples Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price Date multiplied by the Applicable Exchange Ratio, provided that any fractional shares of Sovereign Common Stock resulting from such multiplication shall be rounded down to the nearest share, and (iv) the per share equal to (x) the aggregate exercise price for under each such Peoples Option shall be adjusted by dividing the Shares otherwise purchasable pursuant to per share exercise price under each such Company Stock Peoples Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Applicable Exchange Ratio; provided, however, provided that in such exercise price shall be rounded down to the case of any option to which Section 421 nearest cent. Notwithstanding clauses (iii) and (iv) of the Code applies by reason of its qualification under Section 422 of the Code (preceding sentence, each Peoples Option which is an "incentive stock optionsoption" 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 "ISOs" ) renewal of the option price, within the number meaning of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a424(h) of the CodeIRC. Sovereign and Peoples agree to take all necessary steps to effect the foregoing provisions of this Section 1.02(f).

Stock Options. (ai) At On the Effective TimeDate, each option to acquire First Home Common Stock which is then outstanding option or warrant to purchase Shares (a "Company Stock First Home Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement), whether vested or unvestednot exercisable, shall cease to represent a right to acquire shares of First Home Common Stock and shall be converted as of the Effective Time automatically into options or warrants, as applicable, an option to purchase shares of Parent Sovereign Common Stock and the corresponding number of Sovereign Stock Purchase Rights, and Sovereign shall assume each First Home Option, in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company the applicable First Home Stock Option has been issued Plan and stock option agreement by which it is evidenced, except that from and after the Effective Date, (i) Sovereign and its Board of Directors or a duly authorized committee thereof shall be substituted for First Home and First Home's Board of Directors or duly authorized committee thereof administering such First Home Stock Option Plan, (ii) each First Home Option assumed by Sovereign may be issued other than outstanding warrants are referred to collectively as exercised solely for shares of Sovereign Common Stock and Sovereign Stock Purchase Rights, (iii) the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Sovereign Common Stock subject to such First Home Option shall be equal to the number of shares of Parent First Home Common Stock that the holder of subject to such Company Stock First Home Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price Date multiplied by the Applicable Exchange Ratio, provided that any fractional shares of Sovereign Common Stock resulting from such multiplication shall be rounded down to the nearest share, and (iv) the per share equal to (x) the aggregate exercise price for under each such First Home Option shall be adjusted by dividing the Shares otherwise purchasable pursuant to per share exercise price under each such Company Stock First Home Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Applicable Exchange Ratio; provided, however, provided that in such exercise price shall be rounded up to the case of any option to which Section 421 nearest cent. Notwithstanding clauses (iii) and (iv) of the Code applies by reason of its qualification under Section 422 of the Code (preceding sentence, each First Home Option which is an "incentive stock optionsoption" 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 "ISOs" ) renewal of the option price, within the number meaning of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a424(h) of the CodeIRC. Sovereign and First Home agree to take all necessary steps to effect the foregoing provisions of this Section 1.02(f).

Stock Options. (a) At the Effective Time, each outstanding option or warrant Options to purchase Ordinary Shares shall be granted from time to time under such arrangements, contracts or plans as approved by the Board of Directors (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant including the Sung Director). Each recipient of an option to purchase Ordinary Shares under the Company's 1988 Stock Option ’s stock option plan (the “Plan”) shall enter into an option agreement with the Company. Unless otherwise expressly approved by the Board of Directors, 1990 Stock Option Planincluding the Sungy Director, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, Ordinary Shares purchased upon exercise of options to purchase Ordinary Shares of the Company issued after the Closing to employees of the Company under the Plan or other agreement or arrangement, whether vested or unvestedotherwise, shall be converted as subject to standard restrictions including but not limited to right of the Effective Time into options or warrantsfirst refusal upon transfer and market stand-off, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of upon exercise of such option options, each optionee shall, if required by the Company, sign an Adoption Agreement to adopt this Agreement and the Right of First Refusal and Co-Sale Agreement entered into by and among the Group Companies, the Founders’ BVI Holding Entity, the Investor and the Founders dated as of even date herewith. Furthermore, unless otherwise expressly approved by the Board of Directors, including the Sungy Director, options to purchase Ordinary Shares of the Company issued to employees of the Company under the Plan or otherwise, shall also be determined in order subject to comply with Section 424(afour (4) year vesting provisions as follows: twenty-five percent (25%) of the Codeshares subject to such options shall vest on the first anniversary of the issuance of such options and one forty-eighth (1/48th) of the shares subject to such options shall vest monthly over the next three (3) years. Unless otherwise expressly approved by the Board of Directors, including the Sungy Director, there shall be no acceleration of the vesting of shares subject to options granted under the Plan. The Company shall have a repurchase option on any unvested shares at the lower of the original purchase price of such shares paid by such optionee and the fair market value of such shares at the time the Company exercises its right to repurchase. The Company shall exercise this repurchase option unless otherwise approved by the Board of Directors, including the Sungy Director.

Stock Options. (a) At the Effective Time, each outstanding Employee shall be granted an option or warrant to purchase Shares 50,000 shares of common stock of Holdings (a the "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued Agreement attached hereto as Exhibit A. The Option shall have an exercise price equal to $5.75 which is equal to the fair market value of the common stock of Holdings on the date hereof. The Option shall be subject to and conditional upon the Option receiving (i) the approval of the Compensation Committee of the Board of Directors of Holdings and (ii)the affirmative vote of a majority of all outstanding shares of Holdings at the next annual meeting of the stockholders of Holdings of the Long Term Incentive Plan ("Stockholder Approval") and the Option shall be null and void if such approval or Stockholder Approval is not obtained. The Option shall be exercisable (A) in installments, as follows: (i) 25,000 shares of common stock may be issued other than outstanding warrants are referred to collectively purchased on the first anniversary hereof and, (ii) 25,000 shares of common stock may be purchased on the second anniversary hereof; and (B) in full upon a "Change of Control", as the defined below. A "Company Plans.Change in Control" Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of occurred if: (i) any person (as defined in Section 3(a)(9) under the number Securities Exchange Act of Shares otherwise purchasable 1934, as amended (the "Exchange Act")), other than the Company or Holdings, becomes the Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act; provided, that a Person shall be deemed to be the Beneficial Owner of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, options or otherwise, without regard to the 60 day period referred to in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Holdings, the Company or any Significant Subsidiary (as defined below) representing 50% or more of the combined voting power of Holdings', the Company's or such Company Stock Option, multiplied by subsidiary's then outstanding securities; (ii) during any period of two years, individuals who at the Exchange Ratiobeginning of such period constitute the Board of Holdings cease for any reason to constitute at least a majority of the Board of either Holdings; provided(iii) the consummation of a merger or consolidation of Holdings, howeverthe Company or any subsidiary owning directly or indirectly all or substantially all of the consolidated assets of the Company ( a "Significant Subsidiary") with any other entity, that other than a merger or consolidation which would result in the case of any option to which Section 421 voting securities of the Code applies by reason of its qualification under Section 422 Holdings, the Company or a Significant Subsidiary outstanding immediately prior thereto continuing to represent more than 50% of the Code combined voting power of the surviving or resulting entity outstanding immediately after such merger or consolidation; ("incentive stock options" or "ISOs" iv) the option priceshareholders of the Company approve a plan or agreement for the sale or disposition of all or substantially all of the consolidated assets of the Company in which case the Board shall determine the effective date of the Change of Control resulting therefrom; (v) any other event occurs which the Board determines, in its discretion, would materially alter, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) structure of the CodeCompany or its ownership and (vi) Xxxxxx Xxxxxxxx ceases to be the Chief Executive Officer of Holdings and/or TSI.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, Fraser shall be converted as granted stock in the amount of the Effective Time into options or warrants, as applicable, to purchase 250,000 shares of Parent restricted Company Common Stock in accordance with the terms of this Section 1.11first calendar year. All plans or agreements described above pursuant to which If, at any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately time prior to the Effective Time issuance of said shares there shall be any alteration in the capital stock of the Company, other than an increase in the authorized or issued capital, the said issuance shall attach to an appropriate number of the shares or securities of the Company, which shall have, been created by anysuch alteration. In addition, Fraser and Cathy Masamitsu, Fraser's assxxxxxx, xxxxx xe xxxxxxx a stock option of restricted Company Common Stock in an amount to be determined by the Board of Directors of ValCom at the end of each calendar year. Fraser warrants and represents that the shares are being acquired solely for its own account and not with a price per share equal to (x) view to, or for resale in connection with, any distribution of common shares within the aggregate exercise price meaning of the Securities Act. Fraser agrees that the shares may not be sold in absence of registration unless such sale is exempt from registration under the Act and any applicable state securities laws. The certificate for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) shares shall bear the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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 following restrictive legend: "THE SHARES REPRESENTED BY THE CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 ("incentive stock optionsTHE ACT") AND ARE "RESTRICTED SECURITIES" or AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY."ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code.

Stock Options. (a) At the Effective Time, each all rights with respect to FEI Common Stock under FEI Options then outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrantsand become rights with respect to Veeco Shares, as applicable, to purchase shares of Parent Common Stock and Veeco shall assume each such FEI Option in accordance with the terms (as in effect as of the date of this Section 1.11Merger Agreement) of the stock option plan or other arrangement under which it was issued and the terms of the stock option agreement by which it is evidenced. All plans or agreements described above pursuant to which any Company Stock From and after the Effective Time, (i) each FEI Option has been issued or assumed by Veeco may be issued other than outstanding warrants are referred exercised by the holder thereof solely for Veeco Shares, (ii) the number of Veeco Shares subject to collectively as the "Company Plans." Each Company Stock each such FEI Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the product of (A) the number of shares of Parent FEI Common Stock that the holder of subject to such Company Stock FEI Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price multiplied by (B) the Exchange Ratio, rounding to the nearest whole share, (iii) the per share equal to exercise price under each such FEI Option shall be adjusted by dividing (x) the aggregate per share exercise price for the Shares otherwise purchasable pursuant to under such Company Stock FEI Option divided by (y) the product Exchange Ratio and rounding to the nearest cent and (iv) any restriction on the exercise or transfer of (i) any such FEI Option shall continue in full force and effect in accordance with its terms and the number term, exercisability, vesting schedule and other provisions of Shares otherwise purchasable pursuant or relating to such Company Stock OptionFEI Option shall otherwise remain unchanged. Veeco shall file with the SEC, multiplied no later than the date on which the Merger becomes effective, a registration statement on Form S-8 relating to the Veeco Shares issuable with respect to FEI Options assumed by (ii) the Exchange Ratio; provided, however, that Veeco in the case of any option to which accordance with this Section 421 of the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code5.05(a).

Stock Options. (a) At As soon as practicable following the date of this Agreement, but in any event not less than fifteen trading days prior to the Closing, the Board of Directors of the Company (or, if appropriate, any committee administering the Company's 1989 Non-Qualified Stock Option Plan (the "NQSO Plan") or 1996 Incentive Stock Option Plan (the "ISO Plan," and together with the NQSO Plan, the "Company Option Plans") shall adopt such resolutions or take such other actions as may be required to adjust the terms of all outstanding Company Options (as defined in Section 3.03) issued pursuant to the Company Option Plans and related agreements, to provide that at the Effective Time, each Company Option outstanding (whether or not vested and exercisable) immediately prior to the Effective Time shall at the Effective Time cease to represent a right to acquire shares of Company Common Stock and shall be converted automatically into an option or warrant to purchase Shares (a "Company Stock Continuing Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of acquire Parent Common Stock in accordance with an amount and at an exercise price determined as provided in the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, immediately following sentence (and on substantially the same terms and conditions as were applicable under such Company Stock OptionOption Plan and the agreements evidencing grants thereunder), subject to Section 1.02(b). At the Effective Time, if the holder of a Company Option which is then outstanding and unexercised has not timely elected (with respect to Company Options granted under the NQSO Plan) or has not timely requested (with respect to Company Options granted under the ISO Plan; or if so requested, if such request has been denied by the Company) to receive cash for such Company Option as described in subsection (b) of this Section 1.02, then such Company Option shall, in accordance with the provisions of the NQSO Plan or the ISO Plan, whichever is applicable, become a Continuing Option to acquire (x) the number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant shares of Company Common Stock subject to such Company Stock Option, Option immediately prior to the Effective Time multiplied by (ii) the Exchange Ratio; providedMerger Consideration (a partial share shall be rounded down to the next lower whole share), however, that with (y) an exercise price equal to the quotient of (i) the original exercise price per share (the "Original Exercise Price") of Company Common Stock subject to such Company Option in effect immediately prior to the Effective Time divided by (ii) the Merger Consideration and rounding the exercise price thus determined to the nearest whole cent (a half cent shall be rounded to the next higher whole cent). In the case of any option Company Options intended to which Section 421 of the Code applies by reason of its qualification under be incentive stock options (as defined in Section 422 of the Code ("incentive stock options" or "ISOs" ) Code), the option exercise price, the number of shares purchasable pursuant of Parent Common Stock subject to such option Continuing Option and the terms and conditions of or exercise of such option Continuing Option shall be determined in order to comply with the requirements of Section 424(a) of the Code.

Stock Options. (a) At the Effective Time, the obligation to issue shares under each outstanding option or warrant to purchase Shares UNIDATA Common Stock (each a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Companygranted under UNIDATA's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Option Plan, 1994 Stock Option Plan, 1995 Stock Option Plan, 1996 Supplemental Stock Option Plan, as amended, and 1997 Stock Option Plan, each as amendedamended (collectively, 1994 Outside Director the "UNIDATA Stock Option PlanPlans") and to former employees of O2 pursuant to the O2 Transaction, Key Executive all of which shall be fully vested and exercisable at the Effective Time pursuant to the terms of the applicable Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvestedOption, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option deemed assumed by VMARK and each such option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock OptionOption prior to the Effective Time, a the whole number (disregarding any fractional shares) of shares of Parent VMARK Common Stock equal to the number of shares of Parent Common Stock that as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time (not taking into account whether or not such option was in fact exercisable), at a price per share equal to (x) the aggregate exercise price for the Shares UNIDATA Common Stock otherwise purchasable pursuant to such Company Stock Option Option, divided by (y) the product of (i) the number of Shares otherwise shares of VMARK Common Stock deemed purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that in the case of any option to which Section 421 exercisability or the other vesting of the Code applies assumed options and the underlying stock shall continue to be determined by reason of its qualification under Section 422 of the Code ("incentive reference to stock options" or "ISOs" ) the option priceagreements executed pursuant to UNIDATA's Stock Option Plans, and provided, further, that references in any Stock Option to UNIDATA, the number board of shares purchasable directors of UNIDATA or any committee thereof, and any UNIDATA Stock Option Plan shall, commencing at the Effective Time, unless inconsistent with the context, be to VMARK, the board of directors of VMARK or a committee thereof, and VMARK's 1986 Stock Option Plan (for officers) or 1995 Non-Statutory Option Plan (for non-officers), respectively. (b) As soon as practicable after the Effective Time, VMARK shall deliver to each holder of an outstanding Stock Option an appropriate notice setting forth such holder's rights pursuant to thereto and such option and Stock Option shall continue in effect on the same terms and conditions of exercise of such option (including further anti-dilution provisions and subject to the adjustments required by this Section 5.05 after giving effect to the Merger). VMARK shall be determined in order to comply with the terms of all such Stock Options and ensure, to the extent required by, and subject to the provisions of, any such UNIDATA Stock Plan that Stock Options which qualified for special tax treatment prior to the Effective Time continue to so qualify after the Effective Time. VMARK shall take all corporate action necessary to reserve for issuance a sufficient number of VMARK Common Stock for delivery pursuant to the terms set forth in this Section 424(a5.05. (c) VMARK shall use reasonable efforts after the Effective Time to maintain the effectiveness of a registration statement under the Code.Securities Act with respect to the issuance by VMARK of shares of VMARK Common Stock which may be issued pursuant to the UNIDATA Options as provided for above in this Section 5.05. Section 5.06

Stock Options. (ai) At the Effective Time, except as set forth in ‎Section 1.08(c)(ii), each stock option in respect of shares of HTLF Common Stock granted under the HTLF Stock Plan (each such stock option, a “HTLF Option” and, collectively with the HTLF RSU Awards and the HTLF PSU Awards, the “HTLF Equity Awards”) that is outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant immediately prior to the Company's 1988 Stock Option PlanEffective Time, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive by virtue of the Merger and Nonqualified Stock Option Plan, without any required action on the part of HTLF or other agreement or arrangement, whether vested or unvestedany holder of such HTLF Option, shall be assumed by UMB and shall be converted as into a stock option (each, an “Assumed Option” and, together with the Assumed RSU Awards and the Assumed PSU Awards, “Assumed Equity Awards”) that (x) is exercisable for (subject to achievement of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, time-based vesting conditions) a number of shares of Parent UMB Common Stock equal to the number of shares of Parent HTLF Common Stock that underlying the holder of such Company Stock HTLF Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a multiplied by the Exchange Ratio, rounded down to the nearest whole share and (y) has an exercise price per share of UMB Common Stock equal to (x) the aggregate exercise price for applicable to the Shares otherwise purchasable pursuant to such Company Stock underlying HTLF Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, howeverrounded up to the nearest cent. Each Assumed Option shall continue to have, and shall be subject to, the same terms and conditions as applied to the corresponding HTLF Option immediately prior to the Effective Time (including the requirement to perform continued services to satisfy applicable time-based vesting conditions, subject to any accelerated vesting on a Qualified Termination of the holder’s employment following the Mergers). The assumption of HTLF Options pursuant to this Section 1.08(c) shall be effected in a manner that in satisfies the case requirements of any option to which Section 421 409A of the Code applies by reason of its qualification under and this Section 422 of the Code ("incentive stock options" or "ISOs" 1.08(c) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall will be determined in order to comply construed with Section 424(a) of the Codethis intent.

Stock Options. (a) At Immediately prior to the Effective Time, each outstanding option or warrant to purchase Shares Common Stock (a "Company Stock Option" ") granted under the Company's 1997 Equity Incentive Plan or collectively the Stock Option Plan for Non- Employee Directors or pursuant to any other employee stock option plan or agreement entered into by the Company with any employee of the Company or any subsidiary thereof and listed on Section 2.11(c) of the Company Disclosure Schedule (the "Company Stock OptionsOption Plans") issued ), whether or not then exercisable, shall become exercisable, subject to the terms of the Company Stock Option Plan pursuant to the Company's 1988 which such Stock Option Plan, 1990 was issued. If and to the extent that a Stock Option Planshall not have been exercised at the Effective Time, 1992 Key Executive such Stock Option Plan, 1993 Employee Qualified shall be automatically canceled. Each holder of a canceled Stock Purchase Plan, 1996 Supplemental Stock PlanOption shall be entitled to receive as soon as practicable after the first date payment can be made without liability to such person under Section 16(b) of the Securities Exchange Act of 1934, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as rules and regulations promulgated thereunder (the "Exchange Act") from the Company Plans." Each Company Stock Option shall be deemed to constitute in consideration for such cancellation an option to acquire, on the same terms and conditions as were amount in cash (less applicable under such Company Stock Option, a number of shares of Parent Common Stock withholding taxes) equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant shares of Common Stock previously subject to such Company Stock Option, Option multiplied by (ii) the Exchange Ratio; providedexcess, howeverif any, that of the equivalent cash value of the Merger Consideration at the Effective Time ($1.50 plus 0.5 multiplied by the Average Trading Price for the 10-Day Period) over the exercise price per share of Common Stock previously subject to such Stock Option (the "Option Consideration ") upon surrender of such Stock Option to the Company or an affidavit of loss in the case form requested by Parent, together with such additional documentation as may be reasonably required by Parent or the Company. The surrender of a Stock Option in exchange for the Option Consideration in accordance with the terms of this Section 1.6(c) shall be deemed a release of any option and all rights the holder had or may have had in respect of such Stock Option. Prior to which the Effective Time, the Company shall use its reasonable best efforts to obtain all necessary consents or releases from holders of Stock Options under the Company Stock Option Plans and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section 421 1.6(c). Except as otherwise agreed to by the parties, (i) the provisions in the Company Stock Option Plans with respect to the right to issue or grant additional options or rights to acquire Common Stock shall terminate as of the Code applies by reason Effective Time and the provisions in any other plan, program or arrangement providing for the issuance or grant of its qualification under Section 422 any other interest in respect of the Code capital stock of the Company or any subsidiary thereof shall be canceled as of the Effective Time, and ("incentive stock options" or "ISOs" ii) the option priceCompany shall use its reasonable best efforts to assure that following the Effective Time no participant in the Stock Option Plans or other plans, programs or arrangements shall have any right thereunder to acquire any equity securities of the Company, the number of shares purchasable pursuant Surviving Corporation or any subsidiary thereof and to terminate all such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codeplans.

Stock Options. (a) At As soon as practicable following the date of this Agreement, but in any event not less than fifteen trading days prior to the Closing, the Board of Directors of the Company (or, if appropriate, any committee administering the Company's 1989 Non-Qualified Stock Option Plan (the "NQSO Plan") or 1996 Incentive Stock Option Plan (the "ISO Plan," and together with the NQSO Plan, the "Company Option Plans") shall adopt such resolutions or take such other actions as may be required to adjust the terms of all outstanding Company Options (as defined in Section 3.03) issued pursuant to the Company Option Plans and related agreements, to provide that at the Effective Time, each Company Option outstanding (whether or not vested and exercisable) immediately prior to the Effective Time shall at the Effective Time cease to represent a right to acquire shares of Company Common Stock and shall be converted automatically into an option or warrant to purchase Shares (a "Company Stock Continuing Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of acquire Parent Common Stock in accordance with an amount and at an exercise price determined as provided in the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, immediately following sentence (and on substantially the same terms and conditions as were applicable under such Company Stock Option2 Option Plan and the agreements evidencing grants thereunder), subject to Section 1.02(b). At the Effective Time, if the holder of a Company Option which is then outstanding and unexercised has not timely elected (with respect to Company Options granted under the NQSO Plan) or has not timely requested (with respect to Company Options granted under the ISO Plan; or if so requested, if such request has been denied by the Company) to receive cash for such Company Option as described in subsection (b) of this Section 1.02, then such Company Option shall, in accordance with the provisions of the NQSO Plan or the ISO Plan, whichever is applicable, become a Continuing Option to acquire (x) the number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant shares of Company Common Stock subject to such Company Stock Option, Option immediately prior to the Effective Time multiplied by (ii) the Exchange Ratio; providedMerger Consideration (a partial share shall be rounded down to the next lower whole share), however, that with (y) an exercise price equal to the quotient of (i) the original exercise price per share (the "Original Exercise Price") of Company Common Stock subject to such Company Option in effect immediately prior to the Effective Time divided by (ii) the Merger Consideration and rounding the exercise price thus determined to the nearest whole cent (a half cent shall be rounded to the next higher whole cent). In the case of any option Company Options intended to which Section 421 of the Code applies by reason of its qualification under be incentive stock options (as defined in Section 422 of the Code ("incentive stock options" or "ISOs" ) Code), the option exercise price, the number of shares purchasable pursuant of Parent Common Stock subject to such option Continuing Option and the terms and conditions of or exercise of such option Continuing Option shall be determined in order to comply with the requirements of Section 424(a) of the Code.

Stock Options. Subject of approval by the Holdings Board, Executive shall be granted an option (athe “Option”) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued total of 1,725,000 shares of common stock of Holdings pursuant to the Educate, Inc. 2003 Omnibus Stock Incentive Plan (the “Plan”), with a per share exercise price equal to $2.97. The Option shall vest as to 1/36 of the shares subject to the Option at the end of each full month following the date of grant. In the event of a “Change of Control” of the Company's 1988 Stock , the Option Planshall vest in full and become and remain immediately exercisable at such time as will permit him to exercise the Option in connection with the Change of Control and, 1990 Stock Option Planif not therein exercised, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Planshall remain outstanding and exercisable for the longer of two (2) years (six (6) months in the event the Change of Control occurs at any time following any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act of 1933, as amended, 1997 Stock Option (“IPO”)) or the duration provided in the Plan, but in no event shall such Option be exercisable following the expiration date. Except as amendedotherwise provided, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed subject to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of the Plan and the form of option agreement approved by the Board. The Executive may immediately or in the future transfer or direct the Company to provide directly, the Executive’s vested and unvested Option to Sterling Partners I, L.P. (the “Options Transferee”). In the event the Executive elects to transfer or direct the Company to provide directly, the Executive’s vested and unvested Option to the Options Transferee, the Executive agrees that the Company shall be under no obligation to any additional registration obligations with respect to the shares issuable upon exercise of such option the Option by the Options Transferee. The parties agree that the compensation described in this Section 3.5 may actually be provided through options or restricted stock as the parties may mutually agree and that all references throughout this Agreement to “options” will be deemed to refer to the eventual compensation arrangement under this section, and that any references to share numbers or exercise prices with respect to options shall be determined in order not apply to comply with Section 424(a) of the Coderestricted stock unless specifically agreed to by both parties.

Stock Options. (a) At the Effective Time, each PAS Option then outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Planshall, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as by virtue of the Effective Time into options Merger and without any further action on the part of PAS or warrantsthe holder of any such PAS Option, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on exercisable upon the same terms and conditions as were under the applicable under PAS stock option plan and the applicable option agreement issued thereunder, except that (i) each such Company Stock assumed PAS Option (a "PAS Rollover Option, a ") shall be exercisable for that whole number of shares of Parent USSC Common Stock equal (rounded to the nearest whole share) into which the number of shares of Parent PAS Common Stock that the holder of subject to such Company Stock PAS Rollover Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Optionwould be converted under this Article II, multiplied by (ii) the option price per share of USSC Common Stock shall be an amount equal to the option price per share of PAS Common stock subject to such PAS Rollover Option divided by the Exchange Ratio; providedRatio (the option price per share being rounded to the nearest full cent), however(iii) each PAS Rollover Option referred to on Schedule 2.05(f)(1) shall, that in the case of any option to which Section 421 as a result of the Code applies by reason Merger, be vested to the extent of its qualification under Section 422 50% of the Code shares of USSC Common Stock for which such option shall be exercisable, ("incentive iv) each PAS Rollover Option referred to on Schedule 2.05(f)(2) shall, as a result of the Merger, be vested to the extent of 60% of the shares of USSC Common stock options" for which such option shall be exercisable, (v) each PAS Rollover Option referred to on Schedule 2.05(f)(3) shall, as a result of the Merger, be vested to the extent of 75% of the shares of USSC Common Stock for which such option shall be exercisable, (vi) each PAS Rollover Option referred to on Schedule 2.05(f)(4) shall, as a result of the Merger, be vested to the extent of 100% of the shares of USSC Common Stock for which such option shall be exercisable, (vii) any PAS Rollover Option referred to on Schedule 2.05(f)(1), 2.05(f)(2) or "ISOs" 2.05(f)(3) held by a PAS employee whose employment is terminated without cause after the option Effective Time and prior to the second anniversary of the Effective Time shall become fully vested on the date of such termination, and (viii) except as stated in clause (vii), all PAS Rollover Options referred to on Schedule 2.05(f)(1), 2.05(f)(2) and 2,05(f)(3), shall, to the extent not vested (pursuant to the terms thereof or pursuant to the provisions of this Section 2.05(f)) as of the Effective Time, vest in equal monthly installments over the 24 month period following the Effective Time, PAS represents and warrants that the remainder of the PAS Options (i.e., those not referred to on Schedule 2.05(f)(1), (2), (3), or (4)) are referred to on Schedule 2.05(f)(5) and will not be affected by the transactions contemplated hereby except as provided in clauses (i) and (ii) of the first sentence of this Section 2.05(f). No payment shall be made for fractional interests, rather, the aggregate number of shares of USSC Common Stock to be issued under any PAS Rollover Option shall be rounded to the nearest whole number. In the event any PAS Rollover Options shall expire without having been exercised on or prior to the second anniversary of the Effective Time, USSC shall calculate the value of such expired PAS Rollover Options (which value shall be determined based upon the excess of the then current fair market value for shares of USSC Common Stock, as determined by reference to the average of the closing prices of a share of USSC Common Stock, as reported by THE WALL STREET JOURNAL under the New York Stock Exchange composite transactions for the seven (7) trading days ending on one (1) business day prior to such second anniversary date, over the exercise price, multiplied by the number of shares purchasable of USSC Common Stock for which such lapsed PAS Rollover Options would have been exercisable) and distribute the value thereof, in cash, pro rata to the holders of PAS Capital Stock as of the Effective Time and the holders of PAS Rollover Options as of the Effective Time (excluding the holder or holders of lapsed PAS Rollover Options). USSC shall either include the shares of USSC Common Stock subject to the PAS Rollover Options in the Form S-3 to be filed pursuant to Section 6.01 hereof, or as promptly as reasonably practicable following the Effective Time, file a Form S-8 registration statement with the Securities and Exchange Commission registering the issuance of such option and the terms and conditions of shares upon exercise of such option shall be determined in order to comply with Section 424(a) of the CodePAS Rollover Options.

Stock Options. (ai) At On the Effective TimeDate, each option to acquire Main Street Common Stock which is then outstanding option or warrant to purchase Shares (a "Company Stock Main Street Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement), whether vested or unvestednot exercisable, shall cease to represent a right to acquire shares of Main Street Common Stock and shall be converted as of the Effective Time automatically into options or warrants, as applicable, an option to purchase shares of Parent Sovereign Common Stock and the corresponding number of Sovereign Stock Purchase Rights, and Sovereign shall assume each Main Street Option, in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company the applicable Main Street Stock Option has been issued Plan and/or stock option agreement by which it is evidenced, except that from and after the Effective Date, (i) Sovereign and its Board of Directors or a duly authorized committee thereof shall be substituted for Main Street and Main Street's Board of Directors or duly authorized committee thereof administering such Main Street Stock Option Plan, (ii) each Main Street Option assumed by Sovereign may be issued other than outstanding warrants are referred to collectively as exercised solely for shares of Sovereign Common Stock and Sovereign Stock Purchase Rights, (iii) the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Sovereign Common Stock subject to such Main Street Option shall be equal to the number of shares of Parent Main Street Common Stock that the holder of subject to such Company Stock Main Street Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price Date multiplied by the Common Stock Exchange Ratio, provided that any fractional shares of Sovereign Common Stock resulting from such multiplication shall be rounded down to the nearest share, and (iv) the per share equal to (x) the aggregate exercise price for under each such Main Street Option shall be adjusted by dividing the Shares otherwise purchasable pursuant to per share exercise price under each such Company Main Street Option by the Common Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, provided that in such exercise price shall be rounded down to the case of any option to which Section 421 nearest cent. Notwithstanding clauses (iii) and (iv) of the Code applies by reason of its qualification under Section 422 of the Code (preceding sentence, each Main Street Option which is an "incentive stock optionsoption" 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 "ISOs" ) renewal of the option price, within the number meaning of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a424(h) of the CodeIRC. Sovereign and Main Street agree to take all necessary steps to effect the foregoing provisions of this Section 1.02(g).

Stock Options. (ai) At On the Effective TimeDate, each option to acquire First Home Common Stock which is then outstanding option or warrant to purchase Shares (a "Company Stock First Home Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement), whether vested or unvestednot exercisable, shall cease to represent a right to acquire shares of First Home Common Stock and shall be converted as of the Effective Time automatically into options or warrants, as applicable, an option to purchase shares of Parent Sovereign Common Stock and the corresponding number of Sovereign Stock Purchase Rights, and Sovereign shall assume each First Home Option, in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company the applicable First Home Stock Option has been issued Plan and stock option agreement by which it is evidenced, except that from and after the Effective Date, (i) Sovereign and its Board of Directors or a duly authorized committee thereof shall be substituted for First Home and First Home's Board of Directors or duly authorized committee thereof administering such First Home Stock Option Plan, (ii) each First Home Option assumed by Sovereign may be issued other than outstanding warrants are referred to collectively as exercised solely for shares of Sovereign Common Stock and Sovereign Stock Purchase Rights, (iii) the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Sovereign Common Stock subject to such First Home Option shall be equal to the number of shares of Parent First Home Common Stock that the holder of subject to such Company Stock First Home Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price Date multiplied by the Applicable Exchange Ratio, provided that any fractional shares of Sovereign Common Stock resulting from such multiplication shall be rounded down to the nearest share, and (iv) the per share equal to (x) the aggregate exercise price for under each such First Home Option shall be adjusted by dividing the Shares otherwise purchasable pursuant to per share exercise price under each such Company Stock First Home Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Applicable Exchange Ratio; provided, however, provided that in such exercise price shall be rounded up to the case of any option to which Section 421 nearest cent. Notwithstanding clauses (iii) and (iv) of the Code applies by reason of its qualification under Section 422 of the Code (preceding sentence, each First Home Option which is an "incentive stock optionsoption" 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 "ISOs" ) renewal of the option price, within the number meaning of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a424(h) of the Code.IRC. Sovereign and First Home agree to take all necessary steps to effect the foregoing provisions of this Section 1.02(f). A-7

Stock Options. (a) At the Effective Time, each outstanding The Company shall adopt a new stock option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above ------------- plan pursuant to which any Company Stock Option has been issued 5 million shares of Common Stock, or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a greater number of shares of Parent Common Stock equal as shall be determined by the board of directors of the Company, shall be reserved for issuance pursuant to options or other awards granted pursuant to such plan. Of the total number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price reserved for the Shares otherwise purchasable issuance pursuant to such plan, the board of directors of the Company shall grant to Persons who are members of the management of the Company as of the date of this Agreement options relating to 1.5 million shares of Common Stock, having an exercise price equal to the Conversion Price of Common Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that set forth in the case of any option Convertible Subordinated Debt and having such vesting schedule and term to expiration (which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" shall not exceed 10 years) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option as shall be determined in order to comply with Section 424(a) by the Compensation Committee of the Codeboard of directors of the Company as constituted as of the date of this Agreement, which Committee shall also determine the allocation of such options among such Persons. The foregoing determinations by such Committee so constituted shall be binding upon the Company and its Board of Directors notwithstanding that adoption and implementation of the new stock option plan referred to in this Section 5.9 may occur at a later date as of which the composition of the Compensation Committee of the board of directors of the Company has changed. In the event the Company is unable for any reason to adopt or implement a new stock option plan as contemplated in this Section 5.9, the Company shall promptly make such alternative arrangements, including, without limitation, adoption and implementation of one or more phantom stock or other compensation plans, as it shall reasonably determine to be appropriate to provide comparable incentive compensation opportunities to the Persons referred to in this Section 5.9. The provisions of this Section 5.9 are intended to confer upon the Persons designated by the existing Compensation Committee of the Company's Board of Directors the right to receive the compensation opportunities hereinabove described and to be enforceable by each of such Persons.

Stock Options. (a) At the Effective Time, (i) each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with outstanding under any employee stock option or compensation plan or arrangement of the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company (except for the Molecular Dynamics, Inc. 1993 Employee Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as Purchase Plan (the "Company Plans." Each Company Stock Option Purchase Plan")) that is vested and exercisable (other than any option that becomes vested and exercisable by its terms as a result of the transactions contemplated hereby) shall be deemed to constitute canceled, and the Company shall pay each such holder in cash at the Effective Time for each such option an amount determined by multiplying (A) the excess, if any, of the Merger Consideration over the applicable exercise price per share of such option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to by (B) the number of shares to which such option relates; and (ii) each option to purchase shares of Parent Common Stock that outstanding under any employee stock option or compensation plan or arrangement of the holder of such Company (except for the Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option Purchase Plan) that is unvested or warrant in full immediately prior to unexercisable at the Effective Time at (each, an "Unvested Option") shall be canceled, and Buyer shall replace each such Unvested Option with an award (a "Replacement Award") with a total value determined by multiplying (A) the excess, if any, of the Merger Consideration over the applicable exercise price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to of such Company Stock Unvested Option divided by (y) the product of (iB) the number of Shares otherwise purchasable pursuant shares to which such Unvested Option relates. The total value of the Replacement Award shall be payable in cash to the optionee in five installments, with the first such installment (constituting 25% of the Replacement Award) payable at the Effective Time and thereafter, the remaining portion of the Replacement Award shall be paid in four equal installments on the last business day of the third, sixth, ninth and twelfth month following the Effective Time (provided that the optionee shall only be entitled to such quarterly payment for any quarter during which such optionee is employed by the Company Stock Optionor its successor as of such quarterly payment date). Each Replacement Award shall represent an unfunded, multiplied by (ii) the Exchange Ratio; provided, however, that in the case of any option to which Section 421 unsecured obligation of the Code applies by reason of Company or its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codesuccessor.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into date hereof (the “Award Date”), the Corporation has granted XXXXX ten (10) year non-qualified options or warrants, as applicable, for the purchase of up to purchase 200,000 shares of Parent the Corporation’s common stock, par value $0.01 per share (the “Common Stock”) under the Corporation’s 2006 Stock Incentive Plan (“Plan”) at an exercise price of $5.11 per share, which represents the closing stock price of the Corporation’s Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full trading date immediately prior to the Effective Time Award Date (the “Stock Option Grant”). The terms of the Stock Option Grant, including the vesting schedule, shall be as set forth in a separate option agreement executed by and between the parties. Such option agreement shall provide, among other things, that the options shall vest pro rata on a quarterly basis (commencing 90 days from the date hereof) over a period of four years, subject to acceleration as provided herein. Any subsequent stock option grants will be determined annually by the Board (and any committee of the Board delegated authority over employee compensation matters). The Corporation hereby represents and warrants to XXXXX that the shares of Common Stock issuable upon exercise of the options referred to herein are covered by an existing effective registration statement of the Corporation on Form S-8 (a “Form S-8”). Notwithstanding anything to the contrary contained in the foregoing, if at a price per share equal any time such shares of Common Stock issuable upon exercise of the options referred to herein are not covered by an existing effective Form S-8, (xa) the aggregate Corporation agrees that if, at any time, and from time to time, it shall authorize the filing of a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), in connection with the proposed offer of any of its securities by it or any of its stockholders, the Corporation shall: (1) promptly notify XXXXX that such registration statement to cover all such shares of Common Stock issuable upon exercise price of the options referred to herein will be included in such registration statement at XXXXX’x request, (2) cause such registration statement to cover all such shares of Common Stock issuable upon exercises of the options referred to herein for which XXXXX requests inclusion, (3) use best efforts to cause such registration statement to become effective as soon as practicable, and (4) take all other reasonable action necessary under any federal or state law or regulation of any governmental authority to permit all such shares of Common Stock issuable upon exercise of the options referred to herein to be sold or otherwise disposed of, and will maintain such compliance with each such federal and state law and regulation of any governmental authority for the Shares otherwise purchasable pursuant period necessary for XXXXX to promptly effect the proposed sale or other disposition; and (b) XXXXX may make a written request that the Corporation effect a registration under the Securities Act covering such Company shares of Common Stock Option divided by issuable upon exercise of the options referred to herein and the Corporation shall (y1) the product of use best efforts to cause such registration statement to become effective as soon as practicable, and (i2) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that in the case take all other reasonable action necessary under any federal or state law or regulation of any option governmental authority to which Section 421 permit all such shares of Common Stock issuable upon exercise of the Code applies by reason options referred to herein to be sold or otherwise disposed of, and will maintain such compliance with each such federal and state law and regulation of its qualification under Section 422 of any governmental authority for the Code ("incentive stock options" period necessary for XXXXX to promptly effect the proposed sale or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codeother disposition.

Stock Options. (a) At the Effective Time, each a)......The Company shall take all actions necessary to provide that all outstanding option or warrant options to purchase Shares acquire shares of Company Common Stock (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to granted under any stock option plan, program or similar arrangement of the Company's 1988 Company or any of its Subsidiaries, each as amended (the "Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvestedPlans"), shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms become fully exercisable and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full vested immediately prior to the Effective Time whether or not otherwise exercisable and vested. The Company shall comply with the terms of the Stock Option Plans, as applicable, and, to the extent required thereunder, provide written notice to the holders of Options that such Options shall be treated as set forth herein. All Options which are outstanding immediately prior to the Effective Time shall be canceled and become null and void and the holders thereof shall be entitled to elect (1) to receive from the Company at a price per the same times and in the same manner as the Company Stockholders pursuant to this Article III, for each Option to acquire one share of Company Common Stock, (A) an amount in cash equal to (x) the aggregate exercise price for cash payable to the Shares otherwise purchasable holder of one share of Company Common Stock pursuant to such Company Stock Option divided by Section 3.2 assuming all Options had been exercised prior to the Effective Time minus (y) the product exercise price per share of such Option (ithe "Exercise Difference"), plus (B) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, certificates representing 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" ) the option price, the number of shares purchasable of Buyer Class A Common Stock which the holder of one share of Company Common Stock would have the right to receive pursuant to such option Sections 3.1 and 3.2 as adjusted as set forth in Section 3.3 hereof assuming all Options had been exercised prior to the Effective Time, plus (C) Warrants in an amount issued to the holder of one share of Company Common Stock pursuant to Section 3.5, plus (D) the right to receive the Contingent Additional Consideration that may be payable to the holder of one share of Company Common Stock pursuant to Section 3.4, or (2) if the Exercise Difference is negative, as a condition for receiving the Buyer Class A Common Stock, the Warrants and the terms and conditions of exercise of right to receive the Contingent Additional Consideration under clause (1) above, to pay such option difference in cash to the Company on or before the Closing Date. All applicable withholding taxes attributable to the payments made hereunder or to distributions contemplated hereby shall be determined in order to comply with Section 424(adeducted from the amounts payable under clause (A) above or by payment of cash by the CodeOption holder if amounts payable under clause (A) are insufficient.

Stock Options. (a) At As soon as practicable following the date of this Agreement, the Board of Directors of AVEMCO (or, if appropriate, any committee administering the AVEMCO Stock Option Plans) shall adopt such resolutions or take such other actions as may be required to effect the following with respect to all options to purchase shares of AVEMCO Common Stock granted under the AVEMCO Stock Option Plans or otherwise ("Options") not exercised prior to the Closing Date: (i) adjust the terms of all such Options to purchase shares of AVEMCO Common Stock to provide that, at the Effective Time, each Option outstanding option or warrant immediately prior to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on substantially the same terms and conditions conditions, as were applicable to such Option under the terms of such Company Option and the applicable AVEMCO Stock OptionOption Plans, a the same number of shares of Parent HCCH Common Stock equal (rounded down to the number of shares of Parent Common Stock that nearest whole share) as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant Option in full immediately prior to the Effective Time Time, at a price per share equal to (xy) the aggregate exercise price for the Shares shares of AVEMCO Common Stock otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (iz) the number of Shares otherwise shares of HCCH Common Stock deemed purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that (i) no certificate or scrip representing fractional shares of HCCH Common Stock shall be issued in respect of any Option as adjusted pursuant to this Section 2.5 and (ii) any such fractional share will not entitle the owner thereof to vote or to any rights of a shareholder of HCCH; provided, further, that in the case of any option to which Section 421 of the Code applies by reason of its qualification under any of Section 422 of the Code ("incentive qualified stock options" or "ISOs" ) ), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code.; and (ii) make such other changes to the AVEMCO Stock Option Plans as it deems appropriate to give effect to the Merger (subject to the approval of HCCH, which shall not be unreasonably withheld). (b) Any provisions in the AVEMCO Stock Option Plans providing for the issuance, transfer or grant of any capital stock of AVEMCO or any interest in respect of any capital stock of AVEMCO shall be deleted as of the Effective Time, and AVEMCO shall use commercially reasonable efforts to ensure that following the Effective Time no holder of an Option or any participant in any AVEMCO Stock Option Plan shall have any right thereunder to acquire any capital stock of AVEMCO, HCCH or the Surviving Corporation, except as contemplated in this Section 2.5. 7 13 (c) As soon as practicable after the Effective Time, HCCH shall deliver to the holders of Options appropriate notices setting forth such holder's rights pursuant to the respective AVEMCO Stock Option Plans and the agreements evidencing the grants of such Options shall continue in effect on substantially the same terms and conditions (subject to the adjustments required by this Section 2.5 after giving effect to the Merger). Except as otherwise provided in this Section 2.5, HCCH shall comply with the terms of the AVEMCO Stock Option Plans and ensure, to the extent required by, and subject to the provisions of such AVEMCO Stock Option Plans, that the Options which qualified as incentive stock options prior to the Effective Time continue to qualify as incentive stock options after the Effective Time. (d) HCCH agrees to use commercially reasonable efforts to take such actions as are necessary for the conversion of the Options in accordance with this Section 2.5, including: (i) the reservation, issuance and listing of HCCH Common Stock as is necessary to effectuate the transactions contemplated by Section 2.5; (ii) entering into such agreements as are necessary to assume such Options; and (iii) the filing of a registration statement or statements pursuant to Section 8.6 hereof, to facilitate the public sale of stock issuable upon the exercise of such Options. (e) A holder of an Option adjusted in accordance with this Section 2.5 may exercise such adjusted Option in whole or in part in accordance with its terms by delivering a properly executed notice of exercise to HCCH, together with the consideration therefor and the federal withholding tax amount, if any, required in accordance with the related AVEMCO Stock Option Plans. ARTICLE III THE SURVIVING CORPORATION SECTION 3.1

Stock Options. (a) At Prior to the Effective Time, Xxxxx shall use its commercially reasonable efforts to provide that each outstanding option or warrant to purchase Xxxxx Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 granted under Xxxxx’x 1997 Employee, Director and Consultant Stock Option PlanPlan and its 2005 Stock Plan (in each case, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of a “Xxxxx Option”) outstanding at the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock which is vested (in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Optioneach case, a number of shares of Parent Common Stock “Vested Xxxxx Option”) shall entitle each holder thereof to receive a payment in cash from the Surviving Corporation, upon the Effective Time, equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Xxxxx Shares otherwise purchasable pursuant previously subject to such Company Stock Option, multiplied by Vested Xxxxx Option and (ii) the Exchange Ratioexcess, if any, of the Merger Consideration over the exercise price per Xxxxx Share previously subject to such Vested Xxxxx Option. All applicable withholding taxes attributable to the payments made hereunder shall be deducted from the amounts payable hereunder; provided, however, that in the case of with respect to any option person subject to which Section 421 16 of the Code applies by reason of its qualification 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 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a16(b) of the CodeExchange Act. Xxxxx shall, upon the request of any holder of Vested Xxxxx Options, permit such holder to execute and deliver to Xxxxx, prior to the expiration of the Offer, an agreement substantially in the form of Annex B (an “Option Election”) under which such holder would agree, contingent upon the purchase of Xxxxx Shares by Acquisition Subsidiary pursuant to the Offer, to cause, immediately prior to the expiration of the Offer, such Vested Xxxxx Options to be exercised and the Xxxxx Shares issued as a result of that exercise to be tendered in the Offer. Xxxxx and Acquisition Subsidiary shall reflect on their books and records the transactions effected pursuant to the Option Elections. At the Effective Time, (A) each Xxxxx 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 Xxxxx Shares into which such Xxxxx Option is exercisable shall be cancelled by Xxxxx in exchange for the right to receive, without interest, a cash amount equal to the product of (1) the excess, if any, of (x) such Merger Consideration, over (y) the exercise price per share of such Xxxxx Option multiplied by (2) the total number of Xxxxx Shares subject to such Xxxxx Option (such product, as applied to Xxxxx Options referred to as “Option Consideration”); (B) each Xxxxx 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 Xxxxx Shares into which such Xxxxx Option is exercisable shall be terminated, without any consideration therefor; and (C) the Board of Directors of Xxxxx 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 Xxxxx Option agreements and any other plan or arrangement of Xxxxx (whether written or oral, formal or informal). As soon as practicable following the date hereof, Xxxxx shall deliver or cause to be delivered to each holder of a Xxxxx Option any certifications, notices or other communications required by the terms of such Xxxxx Option or any agreement entered into with respect thereto to be delivered to such holder prior to the Effective Time and the other transactions contemplated by this Agreement.

Stock Options. All options (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent acquire Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than Shares outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time under any stock option or similar plan or agreement of the Company (such stock option or similar plans or agreements being collectively referred to herein as the "Stock Plans"), whether or not then exercisable, shall (by all necessary and appropriate action which shall be taken by the Board of Directors of the Company or such appropriate committee or committees thereof) be canceled at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of Effective Time and (i) Purchaser shall use commercially reasonable efforts so that each holder of a Stock Option shall at the Effective Time, but in any event not more than two business days after the Effective Time, receive from the Surviving Corporation (and if necessary Purchaser will provide funds to the Surviving Corporation so that it is able to make such payment), for each Common Share subject to a Stock Option, an amount in cash equal to the excess, if any, of the Merger Consideration over the per share exercise price of such Stock Option, without interest, in full settlement of the Company's (and the Surviving Corporation's) obligations under each such Stock Option, or (ii) to the extent that the per share exercise price of any Stock Option equals or exceeds the Merger Consideration, at the Effective Time such Stock Option shall be canceled and the holder of such Stock Option shall not receive or be entitled to receive any consideration from Purchaser, Merger Sub or the Surviving Corporation in respect of such Stock Option. The Company shall deliver to Purchaser a list of the holders of Stock Options, indicating the number of Shares otherwise purchasable Stock Options held by each holder of Stock Options and the exercise price, expiration date and exerciseability of such Stock Options, at least ten days prior to the Closing Date. Notwithstanding the foregoing, the amounts payable pursuant to such this Section 1.4 shall be subject to all applicable withholding taxes. The Company Stock Option, multiplied by (ii) shall use commercially reasonable efforts to approve the Exchange Ratio; provided, however, that in the case of any option to which Section 421 disposition of the Code applies by reason of its qualification Stock Options in accordance with the foregoing to the extent necessary to exempt such dispositions under Section 422 Rule 16b-3 of the Code Securities Exchange Act of 0000 (xxx "incentive stock options" or Xxxxxxxx Xxx"ISOs" ) ). The term Stock Options shall not include the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the CodeLFSRI Warrant.

Stock Options. (a) At Employee currently holds the Effective Time, each outstanding option or warrant options to purchase Shares Alfacell Common Stock that are described, as to grant date, number of shares covered, purchase price, vesting schedule, original expiration date and expiration date based upon the termination of Employee’s employment with the Company on the Termination Date, on Exhibit B hereto (a "Company Stock Option" or collectively "Company Stock collectively, the “Existing Options") issued ”). Each such Existing Option shall remain exercisable in accordance with its original terms and such original terms shall not be modified by this Agreement, except to the extent expressly set forth in this Section 2(e). With respect to any outstanding Existing Options, Employee acknowledges that she will cease to be an employee on the Termination Date and that accordingly, pursuant to the Company's 1988 Stock Option Planterms of the stock option plan(s) and stock option agreements under which they were granted, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrantsTermination Date (i) any unvested Existing Options will lapse, and (ii) any Existing Options that have vested as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder date will lapse unless exercised such option or warrant in full immediately prior to the Effective Time post-retirement expiration date set forth on Exhibit B. All or portions of the Existing Options may be transferred by Employee to “Family Members” (as such term is defined in the General Instructions to Form S-8) at a price per share equal any time that Employee holds the Existing Options to (xbe transferred, provided that Employee may not receive any consideration for such transfer, any such Family Member may not make any subsequent transfers of such Existing Options other than by will or the laws of descent and distribution and the Company receives prior written notice of such transfer. To the extent required, the Company will amend the applicable option or stock plan to allow for such transfers to take place. The provisions of this section 2(e) shall not apply to the aggregate exercise price for the Shares otherwise purchasable options granted to Employee pursuant to such Company Stock Option divided by (ySection 3(b) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code).

Stock Options. (ai) At Effective as of the Effective Time, the Company shall take all necessary action, to (A) terminate the Stock Option Plans, (B) provide that each outstanding option or warrant to purchase Shares shares of Company Common Stock granted under the Stock Option Plans (a "Company “Stock Option" or collectively "Company Stock Options"”) issued pursuant that is outstanding and unexercised as of immediately prior to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangementEffective Time, whether or not vested or unvestedexercisable, shall be converted become fully vested and exercisable as of the Effective Time into options or warrantsand (C) cancel, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of the Plans, as of the Effective Time, each Stock Option that is outstanding and unexercised at the Effective Time. Each holder of a Stock Option that is outstanding and unexercised at the Effective Time and that has an exercise price per share of Common Stock that is less than the Per Share Consideration shall be entitled (subject to the provisions of this Section 1.11. All plans 1.7(b)) to be paid by the Surviving Corporation at the Effective Time or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as soon thereafter as the "Company Plans." Each Company Stock Company’s payroll service provider can arrange the payment, in exchange for the delivery of an agreement in substantially the form attached hereto as Exhibit E-3 (and “Option shall be deemed to constitute an option to acquire, on the same terms Letter”) and conditions as were applicable under cancellation of such Company Stock Option, a number an amount in cash (subject to any applicable withholding taxes) with respect to each share of shares of Parent Common Stock subject to the Stock Option as set forth on the Payment Spreadsheet (which shall be equal to the number excess, if any, of the Per Share Consideration over the applicable per share exercise price of such Stock Option (the “Option Payment”)). Any such payment shall be subject to all applicable federal, state and local tax withholding requirements. The Surviving Corporation shall pay or cause to be paid the aggregate amount set forth in the Payment Spreadsheet (less applicable withholding taxes and amounts which will be held in escrow in accordance with Section 1.8(b)) to the holders of Stock Options with funds provided by Parent at the Effective Time. At the Effective Time, any unvested shares of Parent Common Stock that awarded to employees, directors or consultants pursuant to any of the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option Plans or warrant in full other arrangements that are outstanding immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that in the case of any option to which Section 421 shall become fully vested as of the Code applies by reason of its qualification under Effective Time and converted into the amounts described in this Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code1.7(b).

Stock Options. (a) At the Effective TimeClosing, each Stock Option outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant as of immediately prior to the Company's 1988 Closing will, by virtue of the Closing and without further action on the part of the holder thereof, be cancelled and each such outstanding Stock Option Planwill be converted into the right to receive, 1990 Stock Option Plansubject to the conditions set forth herein, 1992 Key Executive Stock Option Plana portion of the Final Merger Cash Consideration (the “Optionholder Cash Consideration”), 1993 Employee Qualified Stock Purchase PlanShare Consideration (the “Optionholder Share Consideration”) and Earnout Consideration, 1996 Supplemental Stock Planif any (the “Optionholder Earnout Consideration”, and together with the Optionholder Cash Consideration, and Optionholder Share Consideration, the “Optionholder Consideration”), in each case as amended, 1997 Stock Option Plan, calculated and as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, set forth on the Distribution Waterfall. The Optionholder Cash Consideration shall be converted as promptly paid to each Company Optionholder by the Company in accordance with and subject to the provisions of the Effective Time into options Section 2.7 or warrants2.10, as applicable, promptly following the Closing for amounts payable under Section 2.7 and promptly following the date any such amounts become payable under Section 2.10, (and in any case by the next normal payroll date of the Company following the date such portion of the Optionholder Cash Consideration becomes payable pursuant to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued 2.6(d)) through the Company’s payroll systems (other than outstanding warrants are referred with respect to collectively as the "Company Plans." Each Company Stock Option Optionholder Consideration in respect of non-employee service providers). The Optionholder Consideration shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant paid to such Company Stock Optionholder following receipt by the Company of a duly executed Option divided by (y) Cancellation Agreement, in substantially the product of (i) form attached hereto as Exhibit E, and the number of Shares Company shall be entitled to deduct and withhold from the consideration otherwise purchasable payable or deliverable to any Company Optionholder pursuant to this Section 2.6(d) such Company Stock Option, multiplied by (ii) amounts as it is required to deduct and withhold with respect to the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise making of such option payment under any provision of federal, state, local or foreign tax law. Any amounts required to be withheld with respect to the Optionholder Share Consideration shall reduce the amount of Optionholder Cash Consideration that would otherwise be payable to the Optionholder. If the Company so withholds such amounts, such amounts shall be determined treated for all purposes of this Agreement as having been paid to the Company Optionholders in order to comply with Section 424(a) respect of which the CodeCompany made such deduction and withholding.

Stock Options. (a) At After the Effective Time, each ------------- outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Concentric Common Stock in accordance with the terms of this Section 1.11. All granted under any Concentric stock option or compensation plans or agreements described above pursuant arrangements (a "CONCENTRIC STOCK OPTION"), whether or not exercisable or vested, shall be adjusted as necessary to which any Company provide that, at the Effective Time, each Concentric Stock Option has been issued or may be issued other than outstanding warrants are referred immediately prior to collectively as the "Company Plans." Each Company Stock Option Effective Time shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Concentric Stock OptionOption (including terms regarding vesting), a the same number of shares of Parent Newco Common Stock equal to the number of shares of Parent Common Stock that as the holder of such Company Concentric Stock Option would have been entitled to receive pursuant to the Merger Mergers had such holder exercised such option or warrant Concentric Stock Option in full immediately prior to the Effective Time Time, at a price per share of Newco Common Stock equal to (xA) the aggregate exercise price for the Shares shares of Concentric Common Stock otherwise purchasable pursuant to such Company Concentric Stock Option divided by (yB) the product of (i) the aggregate number of Shares otherwise shares of Newco Common Stock deemed purchasable pursuant to such Company Concentric Stock OptionOption (each, multiplied by (iias so adjusted, an "ADJUSTED OPTION") rounded up to the Exchange Rationearest cent; providedprovided that any fractional share of Newco Common Stock resulting from an aggregation of all the shares of a holder subject to Concentric Stock Option shall be rounded down to the nearest whole share, howeverand provided further that, that in the case of for any option Concentric Stock Option to which Section 421 of the Code applies by reason of its qualification under Section any of Sections 422 through 424 of the Code ("incentive stock options" or "ISOs" ) Code, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) 424 of the Code.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Drilex Common Stock Option" or collectively "Company Stock Options") issued that has been granted pursuant to the Company's 1988 Drilex Stock Plan ("Drilex Stock Option") shall be treated as set forth in this Section 5.10. Drilex shall not grant any stock appreciation rights or limited stock appreciation rights and shall not permit cash payments to holders of Drilex Stock Options in lieu of the treatment thereof as provided in this Section 5.10. (b) The portion, if any, of each Drilex Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted that is exercisable as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11thereof shall be assumed by Bakex Xxxhxx. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option Xx so assumed, such option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Drilex Stock Option, a number of shares of Parent Common Bakex Xxxhxx Xxxmon Stock equal to the number of shares of Parent Drilex Common Stock that the holder purchasable pursuant to such exercisable portion of such Company Drilex Stock Option would have been entitled to receive pursuant to multiplied by the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time Exchange Ratio, at a price per share equal to (x) the aggregate per-share exercise price for the Shares otherwise shares of Drilex Common Stock purchasable pursuant to such Company Drilex Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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 any of sections 422-424 of the Code ("incentive stock options" or "ISOs" ) Code, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code.; and provided further, that the number of shares of Bakex Xxxhxx Xxxmon Stock that may be purchased upon exercise of such Drilex Stock Option shall not include any fractional share and, upon exercise of such Drilex Stock Option, a cash payment shall be made for any fractional share based upon the closing price of a share of Bakex Xxxhxx Xxxmon Stock on the NYSE on the last trading day of the calendar month immediately preceding the date of exercise. After the Effective Time, except as provided above in this Section 5.10(b), each assumed option shall be exercisable upon the same terms and conditions as were applicable to the related Drilex Stock Option immediately prior to the Effective Time. (c) Drilex shall take all reasonable action as may be required such that the portion, if any, of each Drilex Stock Option that is not exercisable as of the Effective Time (an "Unexercisable Option") shall be canceled in exchange for the number of shares of Bakex Xxxhxx Xxxmon Stock, decreased to the nearest whole share, having an aggregate market value at the Effective Time (based on the Average Closing Price) equal to the number of shares of Drilex Common Stock subject to such Unexercisable Option multiplied by the excess, if any, of the Drilex Value over the per-share exercise price thereof. To the extent the terms of an Unexercisable Option allow for withholding to satisfy tax obligations, such rights shall apply to the consideration provided for by this Section 5.10(c). (d) Bakex Xxxhxx xxxll take all corporate action necessary to reserve for issuance a sufficient number of shares of Bakex Xxxhxx Xxxmon Stock for delivery upon exercise of the Drilex Stock Options assumed in accordance with this Section 5.10. As soon as practicable after the Effective Time, Bakex Xxxhxx xxxll file with the SEC a registration statement on Form S-8 (or any successor form) or another appropriate form with respect to the shares of Bakex Xxxhxx Xxxmon Stock subject to the Drilex Stock Options and shall use its best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as Drilex Stock Options remain outstanding. 28 35 5.11

Stock Options. (ai) At the Effective Time, each outstanding option or warrant to purchase Company Shares (a "Company Stock Option" or collectively ") under the Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangementPlans, whether -------------- vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a the same number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant Company Option in full immediately prior to the Effective Time (rounded down to the nearest whole number) (a "Substitute Option"), at a an exercise price per share ----------------- (rounded up to the nearest whole cent) equal to (xy) the aggregate exercise price for the Company Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (iz) the number of Shares otherwise full shares of Parent Common Stock deemed purchasable pursuant to such Company Option in accordance with the foregoing. Notwithstanding the foregoing, each purchase right granted under the Company's Employee Stock OptionPurchase Plan or the Company's Supplemental Employee Stock Purchase Plan (the "Purchase Plans") that is outstanding at the Effective Time shall --------- ----- be converted to a right to acquire upon the same terms and conditions as were applicable to such right immediately before the Effective Time, that number of shares (rounded down to the nearest whole share) of Parent Common Stock equal to the Exchange Ratio multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to Company Shares for which such option and the terms and conditions of exercise of such option shall be purchase right would otherwise have been exercisable determined in order to comply with Section 424(a) as of the Coderelevant grant date under the applicable Purchase Plan at a purchase price per share equal to 85% of the lower of (A) the fair market value of a Company Share on the relevant grant date divided by the Exchange Ratio or (B) the fair market value of a share of Parent Common Stock on the relevant purchase date.

Stock Options. Executive shall be granted options (athe “Options”) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase 300,000 shares of Parent Common Subordinated Voting Stock in accordance with of Indus Holdings, Inc.(“Parent”) under Parent’s 2019 Stock Incentive Plan (the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute “Plan”), having an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock exercise price equal to the number of shares of Parent Common Stock that the holder closing price of such shares on the Canadian Securities Exchange on the date of approval of this Agreement by the Parent Board of Directors. The Options shall be vested as follows: 50,000 of the Options shall be vested immediately upon grant and the remaining 250,000 Options shall vest in four equal annual installments on each anniversary of the date of grant, provided that following a Change of Control (as defined below), if within twelve months following such Change of Control the title and/or responsibilities of Executive are materially diminished or Executive is terminated by the Company Stock Option would have been entitled to receive pursuant without Cause (as defined below), then upon notice by Executive to the Merger had Company given not later than thirty (30) days following such holder exercised such option material diminishment or warrant in full termination, the remaining unvested portion of this Option shall thereupon vest and become immediately prior to the Effective Time at exercisable. As used herein, “Change of Control” shall mean a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product transaction or a series of related transactions involving (i) a sale, transfer or other disposition of all or substantially all of the number assets of Shares otherwise purchasable pursuant to such Company Stock Optionthe Indus Entities, multiplied by (ii) the Exchange Ratio; providedconsummation of a merger or consolidation of Parent or (iii) a sale or exchange of capital stock of Parent, howeverin any case as a result of which the stockholders of Parent immediately prior to such transaction or series of related transactions own, that in the case of any option to which Section 421 aggregate, less than a majority of the Code applies by reason of its qualification under Section 422 outstanding voting power of the Code ("incentive capital stock options" or "ISOs" ) equity interests of the option pricesurviving, resulting or transferee entity. In addition, in the number of shares purchasable pursuant to such option event Executive and the terms Chairman of the Board determine to seek a replacement for Executive, in the event Executive identifies a suitable replacement that is approved by the Parent Board of Directors and conditions of exercise provides cooperation and assistance in the transition of such option shall be determined individual for a period of at least one fiscal quarter, in order to comply with Section 424(a) the reasonable determination of the CodeChairman, then all Options that are unvested shall become vested and immediately exercisable.

Stock Options. (a) At Subject to Section 5.3(b), at the Effective Time, all rights with respect to Company Common Stock under each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangementthen outstanding, whether vested or unvested, shall be converted as of the Effective Time into options or warrantsand become rights to acquire Acquiror Common Stock, as applicable, to purchase shares of Parent Common Stock and Acquiror shall assume each such Company Option in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on substantially the same terms and conditions (as were in effect as of the date of this Agreement) of the stock option plan under which it was issued and the same terms and conditions of the stock option agreement by which it is evidenced, subject to any amendments deemed necessary or advisable by Acquiror in order to comply with applicable under such Legal Requirements (including without limitation the Securities Act and the Exchange Act). From and after the Effective Time, (i) each Company Stock OptionOption assumed by Acquiror may be exercised solely for shares of Acquiror Common Stock, a (ii) the number of shares of Parent Acquiror Common Stock subject to each such Company Option shall be equal to the number of shares of Parent Company Common Stock that the holder of subject to such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at multiplied by a price fraction, the numerator of which is the Common Allocation of Acquiror Stock, and the denominator of which is the Diluted Company Common Shares, rounding the product down to the nearest whole share, (iii) the per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to under each such Company Stock Option divided shall be adjusted by (ydividing the per share exercise price under such Company Option immediately prior to the Effective Time by the fraction set forth in Section 5.3(a)(ii) above, and rounding the product up to the nearest cent, (iv) any restriction on the exercise of (i) the number of Shares otherwise purchasable pursuant to any such Company Stock OptionOption shall continue in full force and effect and the term, multiplied by (iiexercisability, vesting schedule and other provisions of such Company Option and shares acquired upon exercise of any Company Option shall otherwise remain unchanged except as set forth in this Section 5.3(a) the Exchange Ratioor in such Plan or agreement; provided, however, that each Company Option assumed by Acquiror in accordance with this Section 5.3(a) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock split, stock dividend, reverse stock split, reclassification, recapitalization or other similar transaction subsequent to the case of any option Effective Time. Notwithstanding the foregoing, each Company Option that is intended to which Section 421 of the Code applies by reason of its qualification under 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 ("and the Regulations promulgated thereunder so as to continue as an incentive stock options" option under Section 424 of the Code, and so as not to constitute a modification, extension or "ISOs" ) removal of the option price, within the number meaning of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a424(h) of the Code. It is the intention of the parties that the Company Options assumed by Acquiror qualify, to the maximum extent permissible following the Effective Time, as incentive stock options as defined in Section 422 of the Code, to the extent the Company Options qualified as incentive stock options immediately prior to the Effective Time. As soon as practical after the Effective Time but in no event more than 15 days after the Effective Time, Acquiror shall file with the SEC a registration statement on Form S-8 relating to the shares of Acquiror Common Stock that are issuable with respect to the Company Options assumed by Acquiror in accordance with this Section 5.3(a) and that are eligible for registration on such Form. To the extent such shares are not eligible for registration on Form S-8, but are eligible for inclusion in the registration referred to in Section 5.9, such shares shall be included therein.

Stock Options. Each employee stock option to purchase Old Shares granted under any employee stock option or compensation plan or arrangement of the Company outstanding immediately prior to the Effective Time (aan "Option") At shall remain outstanding upon and following consummation of the Recapitalization, and each such Option, whether or not then vested or exercisable immediately prior to the Effective Time, each outstanding option shall (i) if provided by the terms thereof (or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock if accelerated in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant relevant plan) become fully vested and exercisable at the Effective Time and (ii) after the Effective Time represent the right to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as receive, until the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquireexpiration thereof and in accordance with its terms, on in exchange for the same terms and conditions as were applicable under aggregate exercise price for such Company Stock Option, a number of shares of Parent Common Stock equal without interest, the Recapitalization Consideration with respect to the number of shares of Parent Common Stock each Old Share that the such holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant Option in full immediately prior to the Effective Time at a price per share equal Time. The Recapitalization Consideration issuable upon exercise of an Option shall be issued in the same proportion as holders of Old Shares would be entitled to (x) receive their Recapitalization Consideration, but for fractional interests, among cash and New Shares and, if applicable, principal amount of Series A and Series B Debentures and Depositary Shares representing interests in the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product $25 liquidation preference of Public Preferred Stock, except that (i) if the number Underwriting Alternative has not been consummated for any reason at of prior to the Effective Time with respect to the Depositary Shares, the Series A Debentures or the Series B Debentures, as the case may be, the total amount of each of Series A and Series B Debentures and Depositary Shares otherwise purchasable pursuant representing interests in the $25 liquidation preference of the Public Preferred Stock to be issued upon exercise of each such Company Stock OptionOption shall be rounded upwards to the nearest integral multiple of $100, multiplied $100 and $25, respectively (collectively, the "Option Adjustment"), and the amount of cash payable shall be reduced by a corresponding amount so that the holder does not receive fractional Depositary Shares, fractional Series A Debentures or fractional Series B Debentures (ii) the Exchange Ratio; provided, however, that if upon exercise of an Option the amount of cash to be received is less than the Option Adjustment, the total amount of each of Series A and Series B Debentures and Depositary Shares representing interests in the case $25 liquidation preference of Public Preferred Stock shall be rounded downwards to the nearest integral multiple of $100, $100 and $25, respectively, and the amount of cash payable shall be increased by a corresponding amount so that the holder does not receive fractional Depositary Shares, fractional Series A Debentures or fractional Series B Debentures) and (ii) whether or not the Underwriting Alternative has been consummated at or prior to the Effective Time the total amount of New Shares issuable to each Option holder in respect of all Options held by such holder shall be rounded upwards to the nearest whole New Share. Except as specifically provided in this Section 1.7, the Company shall not make any option other adjustments to which Section 421 the terms of the Code applies by reason of its qualification under Section 422 Options as a result of the Code issuance of the ESOP Preferred Stocks or the terms of the ESOP Preferred Stocks ("incentive stock options" or "ISOs" ) the option priceincluding, without limitation, the number of shares purchasable pursuant to such option dividend and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codeconversion rights thereof).

Stock Options. With respect to each outstanding (a) At option to purchase shares of Target Common Stock granted by Target pursuant to Target's 1996 Stock Option Plan and Directors Stock Option Plan (collectively, the "Stock Option Plans") (collectively, the "Options") (whether or not then exercisable) immediately prior to the Effective Time, each outstanding option or warrant to purchase Shares Target shall (a "Company Stock Option" or collectively "Company Stock Options"a) issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full cancel immediately prior to the Effective Time each Option that it has the right to cancel, and (b) with respect to Options that it does not have the right to cancel, use its commercially reasonable efforts to obtain the consent of the holder of such Option to its cancellation and, subject to such consent, cancel such Option immediately prior to the Effective Time. In consideration for the cancellation of such Option, Target agrees to and shall pay to the holder of each canceled Option, at a price per share the Effective Time (whether or not such Option was exercisable immediately prior to its cancellation), an amount in cash equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the excess, if any, of the Per Share Amount over the per-share exercise price for such Option, and (ii) the number of Shares otherwise purchasable shares of Target Common Stock previously subject to such Option. Each Option which is not canceled as described above 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 Company Stock Options were issued as in effect immediately prior to the Effective Time, except that such Options shall be exercisable for an amount in cash equal to the product of (i) the excess, if any, of the Per Share Amount over the per-share exercise price for such Option, multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant of Target Common Stock previously subject to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the CodeOption.

Stock Options. (a) At Prior to the Effective Time, each the Board of Directors of the Company (or, if appropriate, any committee thereof) will adopt appropriate resolutions and use its best efforts to take all other actions necessary to provide for the cancellation, effective at the Effective Time, of all the outstanding option or warrant stock options to purchase Shares Company Common Stock (a the "Company Stock Option" or collectively "Company Stock Options") issued pursuant to granted under the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 1991 Stock Option Plan, as amended, 1994 Outside Director Stock amended (the "Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement"). The Company will use its best efforts to ensure that each such Option, whether or not then vested or unvestedexercisable, shall be converted as of will at the Effective Time into options or warrants, as applicable, to no longer be exercisable for the purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Company Common Stock Stock. Each holder of an Option which is vested at the Effective Time, however, in cancellation and settlement thereof, shall have the right to receive from the Surviving Corporation a cash payment (less any applicable withholding taxes) in the aggregate amount equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to shares of Company Common Stock into which such Company Stock Option, multiplied by Option would have been exercisable at the Effective Time if such Option had not been cancelled and (ii) the Exchange Ratio; providedexcess, howeverif any, that of the Merger Consideration over the exercise price per share for the shares of Company Common Stock subject to such Option as expressly stated in the case applicable stock option agreement or other agreement, without any interest thereon (the "Option Consideration"). The Company will take such other actions as are necessary to fully advise holders of any option to which Section 421 Options of the Code applies by reason of its qualification their rights under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option this Agreement and the terms and conditions of Options, to facilitate their timely exercise of such option shall rights and to effectuate the provisions of this Section 1.11. Prior to the Effective Time, the Acquiror and the Company will establish a procedure to effect the surrender of Options in exchange for the Option Consideration to which the holder of an Option will be determined entitled under this Section 1.11, and, upon surrender of such Option, the Surviving Corporation will pay to the holder thereof in order to comply with Section 424(a) cash the amount of the CodeOption Consideration, if any, to which such holder will be entitled thereunder. Other than as expressly set forth in this Section 1.11, no holder of an Option will have from and after the Effective Time any other rights in respect thereof other than to receive payment for his or her Options equal to the Option Consideration, and the Company will take all necessary actions to terminate effective as of the Effective Time the Company's stock option plans, agreements and similar arrangements.

Stock Options. (a) At The Employee shall participate in any long-term equity ------------- incentive program of the Effective TimeCompany or the Bank and shall be eligible for the grant of stock options, each outstanding option restricted stock, and other awards thereunder or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to under any similar plan adopted by the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan. On the date of the closing of the stock offering for the initial capitalization of the Bank, or other agreement or arrangementas soon thereafter as an appropriate stock option plan is adopted by the Board, whether vested or unvested, the Company shall be converted as of the Effective Time into options or warrants, as applicable, grant to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute Employee an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, purchase a number of shares of Parent Common Stock equal to three percent (3%) of the number of shares of Parent Common Stock that sold in the holder of such Company Stock Option would have been entitled to receive pursuant to offering. The award agreement for the Merger had such holder exercised such stock option or warrant in full immediately prior to the Effective Time at a shall provide for an exercise price per share equal to (x) the aggregate exercise price per share of stock sold in the stock offering for the Shares initial capitalization of the Bank, and shall also provide that one-third of the total number of shares under the option award shall vest and become exercisable on each of the first, second and third anniversaries of the Opening Date, subject to accelerated vesting of all options upon a "Change in Control" as defined below. In addition, the award agreement will provide that the Employee's option shall be qualified as an incentive stock option under the Internal Revenue Code of 1986, as amended (the "Code") to the extent the option otherwise purchasable pursuant to qualifies for such Company Stock Option divided by (y) treatment under the product Code. For purposes of such option vesting, the term "Change in Control" shall mean that any of the following events shall have occurred: (i) a person, partnership, joint venture, corporation or other entity, or two or more of any of the number foregoing acting as a group (or a "person" within the meaning of Shares otherwise purchasable pursuant to Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), other than the Company, a majority-owned subsidiary of the Company, an employee benefit plan (or related trust) of the Company or such Company Stock Optionsubsidiary, multiplied by become(s) after the effective date of the stock option plan the "beneficial owner" (as defined in Rule 13(d)(3) under the 0000 Xxx) of 35% or more of the then outstanding voting stock of the Company; (ii) during any period of two consecutive years, individuals who at the Exchange Ratiobeginning of such period constitute the Board of Directors of the Company (together with any new director whose election by the Board or whose nomination for election by the Company's shareholders, was approved by the vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors then in office; provided(iii) the shareholders of the Company approve (A) a plan of complete liquidation of the Company; or (B) an agreement for the sale or disposition of all or substantially all of the Company's assets (other than to a subsidiary of the Company); or (C) a merger, howeverconsolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the case of any option to which Section 421 voting securities of the Code applies Company outstanding immediately prior thereto continuing to represent (either by reason of its qualification under Section 422 remaining outstanding or by being converted into voting securities of the Code surviving entity) at least sixty percent ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a60%) of the Codecombined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation or reorganization; or (iv) a notice of an application is filed with the Office of Comptroller of the Currency (the "OCC") or the Federal Reserve Board or any other bank or thrift regulatory approval (or notice of no disapproval) is granted by the Federal Reserve, the OCC, the Federal Deposit Insurance Corporation, or any other regulatory authority for permission to acquire control of the Company or any of its banking subsidiaries.

Stock Options. All options (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company “Stock Options"”) issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent acquire Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than Shares outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time under any stock option or similar plan or agreement of the Company (such stock option or similar plans or agreements being collectively referred to herein as the “Stock Plans”), whether or not then exercisable, shall (by all necessary and appropriate action which shall be taken by the Board of Directors of the Company or such appropriate committee or committees thereof) be canceled at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of Effective Time and (i) Purchaser shall use commercially reasonable efforts so that each holder of a Stock Option shall at the Effective Time, but in any event not more than two business days after the Effective Time, receive from the Surviving Corporation (and if necessary Purchaser will provide funds to the Surviving Corporation so that it is able to make such payment), for each Common Share subject to a Stock Option, an amount in cash equal to the excess, if any, of the Merger Consideration over the per share exercise price of such Stock Option, without interest, in full settlement of the Company’s (and the Surviving Corporation’s) obligations under each such Stock Option, or (ii) to the extent that the per share exercise price of any Stock Option equals or exceeds the Merger Consideration, at the Effective Time such Stock Option shall be canceled and the holder of such Stock Option shall not receive or be entitled to receive any consideration from Purchaser, Merger Sub or the Surviving Corporation in respect of such Stock Option. The Company shall deliver to Purchaser a list of the holders of Stock Options, indicating the number of Shares otherwise purchasable Stock Options held by each holder of Stock Options and the exercise price, expiration date and exerciseability of such Stock Options, at least ten days prior to the Closing Date. Notwithstanding the foregoing, the amounts payable pursuant to such this Section 1.4 shall be subject to all applicable withholding taxes. The Company Stock Option, multiplied by (ii) shall use commercially reasonable efforts to approve the Exchange Ratio; provided, however, that in the case of any option to which Section 421 disposition of the Code applies by reason of its qualification Stock Options in accordance with the foregoing to the extent necessary to exempt such dispositions under Section 422 Rule 16b-3 of the Code Securities Exchange Act of 1934 ("incentive stock options" or "ISOs" ) the option price, “Exchange Act”). The term Stock Options shall not include the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the CodeLFSRI Warrant.

Stock Options. (a) At the Effective TimeTime of the Merger, each outstanding option or warrant to purchase Shares Company Common Stock (each, a "Company Stock Option" "), whether or collectively "not granted under the Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, whether or other agreement or arrangement, whether vested or unvestednot vested, shall be converted as by virtue of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11Merger be assumed by Parent. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall so assumed by Parent under this Agreement will continue to have, and be deemed to constitute an option to acquiresubject to, on the same terms and conditions as were applicable under of such options immediately prior to the Effective Time of the Merger (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, a Option will be 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 the number of Company Shares that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time of the Merger multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock that if the holder said product is equal to or less than the fraction of one-half (.5) of one Parent Common Stock or rounded up to the nearest whole number of shares of Parent Common Stock if the said product is greater than the fraction of one-half (.5) of one Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per Company Share at which such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full was exercisable immediately prior to the Effective Time at a price per share equal of the Merger by the Exchange Ratio, rounded up to (x) the aggregate exercise price for nearest whole cent. Parent shall comply with the Shares otherwise purchasable pursuant to terms of all such Company Stock Options and use its best efforts to ensure, to the extent required by, and subject to the provisions of, the Company Option divided by (y) Plan and permitted under the product of (i) the number of Shares otherwise purchasable pursuant to such Code or other relevant laws and regulations that any Company Stock Option, multiplied by (iiOption that qualified for tax treatment under Section 424(b) the Exchange Ratio; 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 prior to the Effective Time of the Code ("incentive stock options" or "ISOs" ) Merger continue to so qualify after the option price, Effective Time of the Merger. Parent shall take all corporate actions necessary to reserve for issuance a sufficient number of shares purchasable pursuant to such option and of Parent Common Stock for delivery upon exercise of all Company Stock Options on the terms set forth in this Section 2.03(b). Parent will use its reasonable efforts to promptly file, a registration statement on Form S-8, to the extent available, so as to register the shares of Parent Common Stock subject to the assumed Company Option Plan and conditions of exercise shall use its best efforts to effect such registration and to maintain the effectiveness of such option shall be determined in order to comply with Section 424(a) of the Coderegistration statement for so long as a Company Stock Option remains outstanding.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase IPIX Shares (a an "Company IPIX Stock Option" or collectively collectively, "Company IPIX Stock Options") issued pursuant to the Company's 1988 Stock Option 1997 Equity Compensation Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, and all other outstanding options to purchase IPIX Shares that are listed in Section 1.09 of the Disclosure Schedule shall be converted as assumed by bamboo (all of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All such plans or agreements described above pursuant to which any Company IPIX Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company IPIX Stock Option Plans." "). Each Company IPIX Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company IPIX Stock Option, a the same number of shares of Parent Common Stock equal bamboo Shares (rounded up to the number of shares of Parent Common Stock that nearest whole share) as the holder of such Company IPIX Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time Time, at a price per share (rounded down to the nearest whole cent) equal to (xy) the aggregate exercise price for the IPIX Shares otherwise purchasable pursuant to such Company IPIX Stock Option divided by (y) the product of (iz) the number of full bamboo Shares otherwise deemed purchasable pursuant to such Company IPIX Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that in the case of any option to which Section section 421 of the Code applies by reason of its qualification under Section section 422 of the Code ("incentive stock options" or "ISOs" ) "), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section section 424(a) of the Code.

Stock Options. (a) At Subject to the next sentence, the Company will, on the basis described in Section 3.04(b), take all requisite action so as to cause at or immediately prior to the Effective TimeTime each stock option to purchase Common Shares (each, each an "OPTION") outstanding under any employee stock option or warrant to purchase Shares (a "Company Stock Option" compensation plan or collectively "Company Stock Options") issued pursuant to arrangement of the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether or not vested or unvestedexercisable, shall be converted as canceled, and the Company shall, subject to Section 3.09, pay each holder of any such option at or promptly after the Effective Time into options or warrantsfor each such option an amount in cash determined by multiplying (i) the excess, as applicableif any, to purchase shares of Parent the Common Stock in accordance with Merger Consideration over the terms applicable per share exercise price of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an such option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to by (ii) the number of shares Common Shares such holder could have purchased (assuming full vesting of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger all options) had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal Time. Notwithstanding the foregoing, with respect to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock unvested portion of any Option divided by (y) the product of that either (i) does not accelerate in accordance with its terms as a result of the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied transactions contemplated by this Agreement or (ii) the Exchange Ratio; provided, however, that accelerates in the case of any option to which Section 421 accordance with its terms as a result of the Code applies transactions contemplated by reason this Agreement but the holder of its qualification under such Option has waived such acceleration pursuant to an agreement described in Section 422 7.15(ii), such acceleration and cancellation and payment, to the extent that the acceleration and/or the cancellation and payment pursuant to this Section 3.04(a) would constitute a "parachute payment" pursuant to Section 280G of the Code Code, shall be made only if the requisite approval of the stockholders of the Company contemplated in Section 7.15 (the "incentive stock options" or STOCKHOLDER APPROVAL"ISOs" ) is obtained. In the option priceevent that the Stockholder Approval is not obtained with respect to such unvested portion of an Option, the number Company will not take any action to cause such unvested portion of shares purchasable pursuant an Option to such option be cancelled in exchange for the cash payment set forth in this Section 3.04(a) and the Company will not take any action to cause the vesting of such Option to accelerate in connection with the transactions contemplated by this Agreement. Such Option shall remain outstanding following the Closing Date in accordance with its terms and conditions (other than any provision that provides for accelerated vesting as a result of exercise of such option shall be determined in order to comply with Section 424(a) of the Codetransactions contemplated by this Agreement).

Stock Options. (a) At Prior to the Effective Time, Xxxxx shall use its commercially reasonable efforts to provide that each outstanding option or warrant to purchase Xxxxx Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 granted under Xxxxx’x 1997 Employee, Director and Consultant Stock Option PlanPlan and its 2005 Stock Plan (in each case, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of a “Xxxxx Option”) outstanding at the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock which is vested (in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Optioneach case, a number of shares of Parent Common Stock “Vested Xxxxx Option”) shall entitle each holder thereof to receive a payment in cash from the Surviving Corporation, upon the Effective Time, equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Xxxxx Shares otherwise purchasable pursuant previously subject to such Company Stock Option, multiplied by Vested Xxxxx Option and (ii) the Exchange Ratioexcess, if any, of the Merger Consideration over the exercise price per Xxxxx Share previously subject to such Vested Xxxxx Option. All applicable withholding taxes attributable to the payments made hereunder shall be deducted from the amounts payable hereunder; provided, however, that in the case of with respect to any option person subject to which Section 421 16 of the Code applies by reason of its qualification 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 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a16(b) of the CodeExchange Act. Xxxxx shall, upon the request of any holder of Vested Xxxxx Options, permit such holder to execute and deliver to Xxxxx, prior to the expiration of the Offer, an agreement substantially in the form of Annex B (an “Option Election”) under which such holder would agree, Agreement and Plan of Merger contingent upon the purchase of Xxxxx Shares by Acquisition Subsidiary pursuant to the Offer, to cause, immediately prior to the expiration of the Offer, such Vested Xxxxx Options to be exercised and the Xxxxx Shares issued as a result of that exercise to be tendered in the Offer. Xxxxx and Acquisition Subsidiary shall reflect on their books and records the transactions effected pursuant to the Option Elections. At the Effective Time, (A) each Xxxxx 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 Xxxxx Shares into which such Xxxxx Option is exercisable shall be cancelled by Xxxxx in exchange for the right to receive, without interest, a cash amount equal to the product of (1) the excess, if any, of (x) such Merger Consideration, over (y) the exercise price per share of such Xxxxx Option multiplied by (2) the total number of Xxxxx Shares subject to such Xxxxx Option (such product, as applied to Xxxxx Options referred to as “Option Consideration”); (B) each Xxxxx 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 Xxxxx Shares into which such Xxxxx Option is exercisable shall be terminated, without any consideration therefor; and (C) the Board of Directors of Xxxxx 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 Xxxxx Option agreements and any other plan or arrangement of Xxxxx (whether written or oral, formal or informal). As soon as practicable following the date hereof, Xxxxx shall deliver or cause to be delivered to each holder of a Xxxxx Option any certifications, notices or other communications required by the terms of such Xxxxx Option or any agreement entered into with respect thereto to be delivered to such holder prior to the Effective Time and the other transactions contemplated by this Agreement.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to In the Company's 1988 Money Vested Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at Time, including Vested Stock Options outstanding and issued under the Stock Option Plan (the “Employee Options”), and not exercised, shall be cancelled, extinguished and terminated and converted into and become a price per share right following the Closing Date to receive an amount of cash, without interest thereon and less any required withholding taxes, equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by Per Share Consideration minus (y) the product exercise or conversion or exchange price per share of such Vested Stock Option (such amount payable in respect of any share of Company Common Stock into which a Vested Stock Option is convertible or exercisable, the “Option Consideration”), multiplied by the number of shares of Company Common Stock into which such Vested Stock Option is convertible or exercisable or exchangeable immediately prior to the Effective Time. Notwithstanding the foregoing, as soon as practicable after the Effective Time, and subject to and in accordance with the provisions of Article IX, Parent or the Company (as applicable) shall pay to the Escrow Agent, for deposit into the Escrow Fund (in respect of the aggregate Escrow Amount) and the Equityholders’ Representative Expense Fund, as applicable, on behalf of each holder of In the Money Vested Stock Options in respect of each share of Company Common Stock underlying such Vested Stock Options as of immediately prior to the Effective Time, (i) a portion of the number Per Share Consideration otherwise payable in respect of Shares otherwise purchasable pursuant such Company Common Stock underlying such Vested Stock Options to such Company Stock Option, multiplied Optionholder by virtue of the Merger equal to the Escrow Per Share Amount for each such share and (ii) the Exchange Ratio; providedEquityholders’ Representative Per Share Expense Amount, howeverwhich in each case shall be held by the Escrow Agent as nominee for the holders of In the Money Vested Stock Options converted pursuant to this Section 3.3(a). In the event that, that in at the case Effective Time, the exercise price of any option Stock Option (whether vested or unvested) is equal to which Section 421 of or greater than the Code applies Per Share Consideration reduced by reason of its qualification under Section 422 of both the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option Escrow Per Share Amount and the terms and conditions of exercise of Equityholders’ Representative Per Share Expense Amount, such option Stock Option shall be determined in order cancelled and terminated without payment therefor and have no further force or effect. Immediately prior to comply with Section 424(a) of the CodeEffective Time, all Unvested Stock Options shall be cancelled and terminated without payment therefor and have no further force or effect.

Stock Options. (a) At Immediately prior to the Effective Time, each outstanding employee or director stock option or warrant (an "Option") to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to granted under the Company's 1988 1983 Incentive Stock Option Plan, 1990 the 1993 Incentive Stock Option Plan, 1992 Key Executive the 1993 Non-Employee Directors Stock Option Plan, 1993 Plan or the 1996 Non-Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Directors Stock Option PlanPlan (collectively, as amendedthe "Option Plans") or any other compensation plan or arrangement of the Company shall be canceled, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangementeach holder of any such Option, whether or not then vested or unvestedexercisable, shall be converted as of paid by the Company at the Effective Time into options or warrantsfor each such Option an amount determined by multiplying (i) the excess, as applicableif any, to purchase shares of Parent Common Stock in accordance with the terms Merger Consideration over the applicable exercise price of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock such Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to by (ii) the number of shares Shares such holder could have purchased (assuming full vesting of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger all Options) had such holder exercised such option or warrant Option in full immediately prior to the Effective Time at a price per share equal Time. (b) Prior to the Effective Time, the Company shall use its best efforts (xi) to obtain any consents from holders of Options and (ii) make any amendments to the aggregate exercise price terms of the Option Plans or compensation plans or arrangements, to the extent such consents or amendments are necessary to give effect to the transactions contemplated by Section 2.5(a). Notwithstanding any other provision of this Section 2.5, payment may be withheld in respect of any Option until necessary consents are obtained. (c) The Company shall promptly amend the 1994 Employee Stock Purchase Plan to provide for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number suspension of Shares otherwise purchasable pursuant participation during any offering periods commencing subsequent to such Company Stock Option, multiplied by the date of this agreement for the pendency of the Merger and subject to the successful consummation of the Merger and (ii) the Exchange Ratio; provided, however, that in the case of any option to which Section 421 termination of the Code applies by reason of its qualification under Section 422 1994 Employee Stock Purchase Plan as of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code.Effective Time. SECTION 2.6

Stock Options. (a) At the Effective Time, each outstanding option or warrant The Executive shall be entitled to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Companyparticipate in MIIX Group's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Long Term Incentive and Nonqualified Stock Option Equity Plan, or other agreement or arrangementsimilar plans which may be in effect from time to time for executives of the Company. The Executive is hereby granted, whether vested or unvested, shall be converted effective as of the Effective Time into options or warrantsdate of this Agreement, a Non-Qualified Stock Option, as applicabledefined in the Long Term Incentive Equity Plan, to purchase 100,000 shares of Parent Common Stock common stock of MIIX Group pursuant to and which shall vest in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company the Long Term Incentive Equity Plan Non-Qualified Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively Agreement, the form of which is attached as Exhibit A (the "Company Plans." Each Company Stock Option Agreement"). The per share strike price set forth in the Stock Option Agreement shall be deemed to constitute an option to acquire, the average of the high and low trading prices of the common stock of MIIX Group on the same terms and conditions as were applicable under date of this Agreement or, if no sale was made on such Company Stock Optiondate, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that last preceding day on which the holder of such Company Stock Option would have been stock was traded. The Executive shall be entitled to receive pursuant to the Merger had such holder exercised dividend equivalents on such option or warrant in full immediately prior to shares as dividends are declared and paid on the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product common stock of (i) the number of Shares otherwise purchasable pursuant to such Company Stock OptionMIIX Group, multiplied by (ii) the Exchange Ratio; provided, however, that in until paid to the case Executive any such dividend equivalents, and the interest earned thereon, shall be forfeited as to any unvested option shares that are forfeited by the Executive pursuant to the terms of the Long Term Incentive Equity Plan. Dividend equivalents, and any earnings thereon, that are subject to forfeiture shall be accumulated under the Company's Deferred Compensation Plan. The Executive and MIIX Group shall, simultaneous with the execution of this Agreement, execute the Stock Option Agreement. The grant of any option additional options to which Section 421 purchase shares of common stock of MIIX Group under the Long Term Incentive Equity Plan shall be at the sole discretion of the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the CodeBoard.

Stock Options. (a) At As soon as practicable after the Effective Timedate hereof, each outstanding option or warrant to purchase Shares (a "Company but in any event within the time required by the terms of the Stock Option" or collectively "Company Stock Options") issued Option Plan and grant agreements made pursuant to the Company's 1988 Stock Option Plan, 1990 Stock each Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, Holder shall be converted as of the Effective Time into options or warrantsprovided notice, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of the Stock Option Plan and his or its respective grant agreements, of his or its right to exercise each Company Option. Such notice shall be in form and substance reasonably acceptable to the Company and Kenexa Technology and shall provide each Option Holder the right to elect to have any In-The-Money Options, to the extent such In-The-Money Options would be vested and exercisable upon consummation of the Merger, after giving effect to any applicable acceleration provisions set forth in the Stock Option Plan or the applicable grant agreements, canceled in exchange for a portion of the Total Merger Consideration, payable in accordance with this Section 1.112.11 (each, an “Option Cancellation Agreement”). All plans or agreements Any Option Holder may make the election described above in the preceding sentence by completing, countersigning and returning the Option Cancellation Agreement, to the Company within twenty (20) days of the date of the notice. Each Option Cancellation Agreement shall (i) specify that delivery shall be effected, and risk of loss shall pass, only upon proper delivery of the Option Cancellation Agreement and original Company Option to the Company; and (ii) acknowledge the appointment of the Representative pursuant to which any Company Stock the provisions of, and the authority granted in Section 8.8. Any Option has been issued Holder making the election set forth in the preceding sentence shall receive a portion of the Total Merger Consideration with respect to his or may be issued other than outstanding warrants are referred its In-The-Money Options, in the amount and payable as follows: (i) at the Effective Time, in cash, that portion of the Net Merger Consideration equal to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on Per Share Net Merger Consideration less the same terms and conditions as were per share exercise price of the applicable under such Company Stock In-The-Money Option, a number of shares of Parent Common Stock equal to multiplied by the number of shares of Parent Common Stock that underlying the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior applicable In-The-Money Option, and (ii) subsequent to the Effective Time at a price per share equal to Time, (xA) that portion of the aggregate exercise price for balance of the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock OptionNet Adjustment Amount, multiplied by (ii) the Exchange Ratio; providedif any, however, that in the case of any option to which such Option Holder is entitled in accordance with Section 421 2.13(g); and (B) that portion of the Code applies by reason of its qualification under Section 422 balance of the Code ("incentive stock options" or "ISOs" ) the option priceGeneral Escrow Account, the number of shares purchasable pursuant if any, to which such option and the terms and conditions of exercise of such option shall be determined Option Holder is entitled in order to comply accordance with Section 424(a) 8.9. None of Parent, Kenexa Technology, Acquisition Sub or the Surviving Corporation shall assume any of the CodeCompany Options in connection with the transactions contemplated by this Agreement.

Stock Options. All options and warrants (aindividually, a "FRONTIER OPTION" and collectively, the "FRONTIER OPTIONS") outstanding at the Effective Time to purchase securities of Frontier under any stock option plans or agreements adopted by Frontier or otherwise (the "FRONTIER STOCK OPTION PLANS") shall remain outstanding following the Effective Time. At the Effective Time, each outstanding option such Frontier Options, by virtue of the Merger and without any further action on the part of Frontier or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock the holder of such Frontier Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as assumed by West Pac in such manner that West Pac (a) is a corporation (or a parent or a subsidiary corporation of such corporation) "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Effective Time into options Code; or warrants(b) to the extent that Section 424 of the Code does not apply to any such Frontier Options, as applicable, would be such a corporation (or a parent or a subsidiary corporation of such corporation) were Section 424 applicable to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11such option. All plans or agreements described above pursuant to which any Company Stock Each Frontier Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option assumed by West Pac shall be deemed to constitute an option to acquire, on exercisable upon the same terms and conditions as were under the applicable under Frontier Stock Option Plan and the applicable option agreement issued thereunder, except that (x) the unexercised portion of each such Company Stock Option, a Frontier Option shall be exercisable for that whole number of shares of Parent West Pac Common Stock (rounded to the nearest whole share, with 0.5 rounded upward) equal to the number of shares of Parent Frontier Common Stock that subject to the holder unexercised portion of such Company Stock Frontier Option would have been entitled to receive pursuant to multiplied by the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by Exchange Ratio; and (y) the product option exercise price per share of (i) West Pac Common Stock shall be an amount equal to the number option exercise price per share of Shares otherwise purchasable pursuant Frontier Common Stock subject to such Company Stock Option, multiplied Frontier Option in effect at the Effective Time divided by (ii) the Exchange Ratio; providedRatio (the option price per share, howeveras so determined, that in being rounded to the case of any option to which Section 421 of the Code applies by reason of its qualification nearest full cent, with $0.005 rounded upward). No payment shall be made for fractional interests. The term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Code Code, if applicable, and all of the other terms of the Frontier Options shall otherwise remain unchanged unless modified by or as a result of the transaction contemplated by this Agreement. As soon as practicable after the Effective Time, West Pac shall deliver to the holders of Frontier Options appropriate notices setting forth such holders' rights pursuant to such Company Options, as amended by this Section 1.5, as well as notice of West Pac's assumption of Frontier's obligations with respect thereto ("incentive stock options" or "ISOs" ) the option price, the which occurs by virtue of this Agreement). West Pac shall take all corporate actions necessary to reserve for issuance such number of shares purchasable pursuant of West Pac Common Stock as will be necessary to such option and satisfy exercises in full of all Frontier Options after the terms and conditions Effective Time. Within forty-five (45) days after the Effective Time, West Pac shall register the shares of West Pac Common Stock issuable upon exercise of such option shall be determined in order to comply Frontier Options with Section 424(athe Securities and Exchange Commission on Form S-8 and, for a period running until the earlier of (i) ten (10) years after the Effective Time; or (ii) the exercise of all of the CodeFrontier Options, shall maintain the effectiveness of such Form S-8 Registration Statement unless the Surviving Corporation is acquired after the Effective Time by any Person that does not have a class of securities registered under the Exchange Act.

Stock Options. (a) At the Effective Time, each The Company shall take all actions necessary to provide that all outstanding option or warrant options to purchase Shares acquire shares of Company Common Stock (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to granted under any stock option plan, program or similar arrangement of the Company's 1988 Company or any of its Subsidiaries, each as amended (the "Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvestedPlans"), shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms become fully exercisable and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full vested immediately prior to the Effective Time whether or not otherwise exercisable and vested. The Company shall comply with the terms of the Stock Option Plans, as applicable, and, to the extent required thereunder, provide written notice to the holders of Options that such Options shall be treated as set forth herein. All Options which are outstanding immediately prior to the Effective Time shall be canceled and become null and void and the holders thereof shall be entitled to elect (1) to receive from the Company at a price per the same times and in the same manner as the Company Stockholders pursuant to this Article III, for each Option to acquire one share of Company Common Stock, (A) an amount in cash equal to (x) the aggregate exercise price for cash payable to the Shares otherwise purchasable holder of one share of Company Common Stock pursuant to such Company Stock Option divided by Section 3.2 assuming all Options had been exercised prior to the Effective Time minus (y) the product exercise price per share of such Option (ithe "Exercise Difference"), plus (B) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, certificates representing 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" ) the option price, the number of shares purchasable of Buyer Class A Common Stock which the holder of one share of Company Common Stock would have the right to receive pursuant to such option Sections 3.1 and 3.2 as adjusted as set forth in Section 3.3 hereof assuming all Options had been exercised prior to the Effective Time, plus (C) Warrants in an amount issued to the holder of one share of Company Common Stock pursuant to Section 3.5, plus (D) the right to receive the Contingent Additional Consideration that may be payable to the holder of one share of Company Common Stock pursuant to Section 3.4, or (2) if the Exercise Difference is negative, as a condition for receiving the Buyer Class A Common Stock, the Warrants and the terms and conditions of exercise of right to receive the Contingent Additional Consideration under clause (1) above, to pay such option difference in cash to the Company on or before the Closing Date. All applicable withholding taxes attributable to the payments made hereunder or to distributions contemplated hereby shall be determined in order to comply with Section 424(adeducted from the amounts payable under clause (A) above or by payment of cash by the CodeOption holder if amounts payable under clause (A) are insufficient.

Stock Options. (a) At Section 2.5.1 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 each outstanding unexpired and unexercised option or warrant similar right to purchase Shares Company Common Stock (a "the “Company Stock Option" or collectively "Company Stock Options") issued pursuant to ”), under the Company's 1988 ’s Omnibus Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock and Award Plan, as amended, 1997 and the Company’s Equity Compensation Plan (the “Company Stock Option PlanPlans”), as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive that is vested and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted exercisable as of the Effective Time into options or warrants(the “Vested Company Options”), shall be cancelled effective as applicableof immediately after the Effective Time, to purchase shares and, in exchange therefor, each former holder of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any such cancelled Vested Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed entitled to constitute receive from Parent as soon as reasonably practicable following the Closing Date, in consideration of the cancellation of such Vested Company Option and in settlement therefor, an option amount in cash (without interest and subject to acquire, on any applicable withholding or other taxes required by applicable Law to be withheld) equal to the same terms and conditions as were applicable under such Company Stock Option, a product of (A) the total number of shares of Parent Company Common Stock equal previously subject to such Vested Company Option and (B) the number excess, if any, of shares of Parent the Common Stock that Per Share Price over the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a exercise price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant of Company Common Stock previously subject to such Vested Company Stock Option divided by (y) such amounts payable hereunder being referred to as the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio“Option Payment”); provided, however, that Parent shall deliver to the Escrow Agent on behalf and in the case name of any option to which Section 421 such holder (1) an amount in cash representing the Option Pro Rata Share of the Code applies by reason of its qualification under Section 422 Indemnification Escrow Amount such holder has the right to receive and (2) an amount in cash representing the Option Pro Rata Share of the Code ("incentive stock options" or "ISOs" ) Adjustment Escrow Amount such holder has the option priceright to receive. Immediately after the Effective Time, any such cancelled Vested Company Option shall no longer be exercisable by the number former holder thereof, but shall only entitle such holder to the payment of shares purchasable pursuant to such option the Option Payment, and the terms and conditions Company will use its reasonable best efforts to obtain all necessary consents to ensure that former holders of exercise of such option shall be determined in order Vested Company Options will have no rights other than the right to comply with Section 424(a) of receive the CodeOption Payment.

Stock Options. (a) At the Effective TimeTime of the Merger, each outstanding option or warrant to purchase Shares Company Common Stock (each, a "Company Stock Option" "), whether or collectively "not granted under the Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, whether or other agreement or arrangement, whether vested or unvestednot vested, shall be converted as by virtue of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11Merger be assumed by Parent. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall so assumed by Parent under this Agreement will continue to have, and be deemed to constitute an option to acquiresubject to, on the same terms and conditions as were applicable under of such options immediately prior to the Effective Time of the Merger (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, a Option will be 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 the number of Company Shares that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time of the Merger multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock that if the holder said product is equal to or less than the fraction of one-half (.5) of one Parent Common Stock or rounded up to the nearest whole number of shares of Parent Common Stock if the said product is greater than the fraction of one-half (.5) of one Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per Company Share at which such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full was exercisable immediately prior to the Effective Time at a price per share equal of the Merger by the Exchange Ratio, rounded up to (x) the aggregate exercise price for nearest whole cent. Parent shall comply with the Shares otherwise purchasable pursuant to terms of all such Company Stock Options and use its best efforts to ensure, to the extent required by, and subject to the provisions of, the Company Option divided by (y) Plan and permitted under the product of (i) the number of Shares otherwise purchasable pursuant to such Code or other relevant laws and regulations that any Company Stock Option, multiplied by (iiOption that qualified for tax treatment under Section 424(b) the Exchange Ratio; 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 prior to the Effective Time of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant Merger continue to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code.so qualify after the

Stock Options. (a) At Neither Parent nor Merger Sub shall assume any Company Options in connection with the Merger. Not later than five (5) business days prior to the scheduled or anticipated Closing Date, the Company shall send a notice (the “Option Termination Letter”) to all holders of Company Options, which notice shall notify such holders that (w) Parent and the Merger Sub will not be assuming any Company Options following the Effective Time or substituting new options therefor, (x) that all outstanding Unvested Company Options shall become vested and fully exercisable as of and effective immediately prior to the Effective Time, (y) that each Company Option with an exercise price per share that is less than the Per Share Merger Consideration that is not exercised prior to the Effective Time will be cancelled and the holder of each such unexercised Company Option will be paid the Options Payout Amount (as defined below), if any, in the manner set forth in this Section 1.6(a), and (z) that each Company Option with an exercise price per share that is equal to or greater than the Per Share Merger Consideration shall be canceled at the Effective Time without payment of any consideration therefor. Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, each outstanding option or warrant to purchase Shares Company Option (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of ) with an exercise price per share that is less than the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than Per Share Merger Consideration that is outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full unexercised immediately prior to the Effective Time, shall be canceled at the Effective Time at and the holder thereof, subject to Sections 1.9, 1.10 and 1.11, shall be entitled to receive, a price per share cash payment in an amount, if any, equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the aggregate number of Shares otherwise purchasable pursuant to shares of Company Common Stock issuable upon the exercise of such Company Stock OptionOption immediately prior to the Effective Time, multiplied by (ii) the Exchange Ratio; providedamount, howeverif any, by which the Per Share Merger Consideration exceeds the exercise price per share of such Company Option (it being understood and agreed that in such exercise price shall not actually be paid to the case Company by the holder thereof) (the “Options Payout Amount”). The right of any option holder of Company Options to which Section 421 of receive the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable Options Payout Amount pursuant to such option and the terms and conditions of exercise of such option this Section 1.6(a) shall be determined in order subject to comply and reduced by the amount of any withholding that is required under applicable Law. To the extent that such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the person to whom such amounts would otherwise have been paid. Notwithstanding the foregoing, each Company Option with Section 424(a) an exercise price per share that is equal to or greater than the Per Share Merger Consideration shall, at the Effective Time, be canceled without payment of the Codeany consideration therefor.

Stock Options. (a2.3.1 Subject to satisfaction of the requirements set forth in Code Section 280G(b)(5)(A)(ii), including the shareholder approval requirements set forth at Code Sections 280G(b)(5)(A)(ii)(II) At and 280G(b)(5)(B), and the Effective Timeapplicable regulations thereunder, each outstanding option or warrant in a manner sufficient to purchase assure that receipt by the optionees identified on Schedule 2.3(a) of the Buyer Shares (a "Company Stock Option" or collectively "Company Stock Options") issued identified on such Schedule and further described in the following sentence will, pursuant to the Company's 1988 Stock Code Section 280G(b)(5)(A), not be treated as a parachute payment, Company shall take all actions (including, if appropriate amending individual option agreements and obtaining optionee consents) that are necessary such that each vested and unvested Company Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of which is outstanding at the Effective Time into options or warrantsshall, as applicableby virtue of the Merger, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full cancelled immediately prior to following the Effective Time at a price per share equal in exchange for that number of Buyer Shares set forth opposite each such option holder’s name on Schedule 2.3(a). All of such Buyer Shares upon issuance shall be subject to (x) forfeiture and shall vest on the aggregate exercise price terms summarized in Schedule 2.3(a). Such restricted Buyer Shares will be issued to the grantees solely in consideration of the cancellation of the Company Options held by such grantees and as compensation for services rendered by them; and none of such restricted Buyer Shares will be issued for any of the Company’s Series A preferred stock, Class B Common Stock, Class C Common Stock, Class D Common Stock, Class E Common Stock or Class F Common Stock being changed and converted to Buyer Shares otherwise purchasable pursuant to such Section 2.1.1. The Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order make reasonable efforts to comply with requirements under Code Section 424(a280G(b)(5)(A)(ii) so as to assure that receipt by the optionees identified on Schedule 2.3(a) of the CodeBuyer Shares described on such Schedule will, pursuant to Code Section 280G(b)(5)(A), not be treated as a parachute payment; and none of such optionees shall have a right to receive such Buyer Shares, nor shall any such shares be awarded to either of them, unless the requirements of Code Section 280G(b)(5)(A)(ii), including the shareholder approval requirements set forth at Code Sections 280G(b)(5)(A)(ii)(II) and 280G(b)(5)(B), are satisfied.

Stock Options. (a) At the Effective Time, each outstanding option or warrant All options to purchase Shares (a "stock in the Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted that ------------- are held by Consultant as of the Effective Time into date of this Agreement and that are not vested shall vest on the date of this Agreement. All unexercised options or warrants, as applicable, to purchase shares of Parent Common Stock held by Consultant shall expire in accordance with the terms of this Section 1.11applicable plan or agreement governing such options. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option Consultant shall be deemed entitled to constitute receive additional options to acquire stock of the Company during the Consulting Period in an option amount to acquire, be determined by the Board of Directors on the same terms and conditions as were applicable under such Company Stock Optionrecommendation of the Chairman, but shall receive at least options to purchase a number of shares of Parent Common Stock the Company equal to 90 per cent of the average number of shares provided in options granted to the Chairman, Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Executive Vice President. The calculation of such shares shall be equitably adjusted for unusual circumstances including, without limitation, (i) any initial extraordinary grant to a newly hired officer to fill a vacancy in any of those positions shall be excluded from the calculation, but subsequent grants in the ordinary course to such new officer shall be included, and (ii) if any such office is not filled and option grants are not made with respect to such position, appropriate adjustments shall be made to reflect that circumstance in determining the average number of options granted, the intent being that, over the term of this Agreement, Consultant shall receive options to purchase a number of shares not less than 90 percent of the number of shares in options granted to the top five officers of Parent Common Stock the Company. Any such options granted during the Consulting Period shall be at prices (including any favorable repricing), and with vesting provisions and other terms (to the extent permitted under applicable law) substantially equivalent (but no less favorable) to those granted to the other executive officers of the Company. To the extent that other compensation programs for the executives listed above are instituted in lieu of stock options, Consultant shall participate in those programs such that the holder change in the form of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant compensation to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant executives is not detrimental to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that in the case of any option to which Section 421 of the Code applies by reason of its qualification his rights under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codethis Paragraph 3(c).

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Tandem Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, Plan or other agreement or arrangement, whether vested or unvested, and outstanding as of the Effective Time shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, acquire a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option Company Stock Option, whether or warrant not vested, in full immediately prior to the Effective Time (rounded to the nearest whole share) at a price per share (rounded to the nearest whole cent) equal to (xi) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (yii) the product of (iA) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (iiB) the Exchange Ratio; 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" ") the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined adjusted as necessary in order to comply with Section 424(a) of the Code.

Stock Options. (a) At Prior to the Effective Time, each outstanding option or warrant the Company shall take all necessary and appropriate actions to purchase Shares (a "Company cause the Stock Option" or collectively "Company Stock Options"Options identified on Section 1.7(a) issued pursuant of the Disclosure Schedule to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive become fully vested and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as exercisable and therefore to constitute In-the-Money Options for purposes of this Agreement. As of the Effective Time into options or warrantsTime, as applicableupon the terms and subject to the conditions of this Agreement (i) each In-the-Money Option shall automatically be canceled and extinguished, no longer be outstanding and cease to purchase represent the right to acquire shares of Parent Common Stock Stock, and in accordance with consideration therefor, the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option holder thereof shall be deemed entitled to constitute receive an option to acquireamount in cash (collectively, on the same terms and conditions as were applicable under such Company Stock Option“Option Payments”), a number of shares of Parent Common Stock without interest, equal to the number excess, if any, of shares (x) (A) the Initial Per Share Merger Consideration plus (B) the Additional Per Share Merger Consideration (if any) attributable thereto over (y) the exercise price of Parent such Stock Option in respect of a share of Common Stock that the holder of such Company and (ii) each Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full that is outstanding immediately prior to the Effective Time at a price per share equal and that is not an In-the-Money Option (and, for avoidance of doubt, including each portion of an In-the-Money Option that is not vested or exercisable as of immediately prior to the Effective Time (x) but after giving effect to any vesting acceleration resulting from the aggregate exercise price for Merger in accordance with its terms as in effect on the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product date of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that this Agreement or described in the case first sentence of this Section 1.7(a))) shall automatically be canceled and extinguished, no longer be outstanding and cease to represent the right to acquire Common Stock, without any payment of any option consideration therefor. The Company shall, prior to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option priceEffective Time, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined take all actions as are reasonably necessary in order to comply with effectuate the actions contemplated by this Section 424(a) 1.7; provided that such actions shall expressly be conditioned upon the consummation of the CodeMerger and shall be of no force or effect if this Agreement is terminated. The Option Payments attributable to the Initial Per Share Merger Consideration shall be paid through the Surviving Company’s payroll system on the first normal payroll date of the Surviving Company occurring at least five (5) Business Days following the Effective Time to each Person entitled to receive Option Payments, subject in each case to the withholding described in Section 1.7(b), and any additional portion of the Option Payments payable to the In-the-Money Optionholders shall be paid through the Surviving Company’s payroll system on the first normal payroll date of the Surviving Company occurring at least three (3) Business Days following receipt of such additional portion of the Option Payments to each Person entitled to receive Option Payments, subject in each case to the withholding described in Section 1.7(b). For avoidance of doubt (1) to the extent such additional portion of the Option Payments arises from the Expense Reserve Amount, the Stockholder Representative shall pay such additional portion to the Surviving Corporation for further distribution in accordance with this Section 1.7(a) and (2) to the extent such additional portion of the Option Payments arises under Section 1.11(d) and is payable from the Purchase Price Adjustment Escrow Fund, the Parties shall cause the Escrow Agent to pay such additional portion to the Surviving Corporation for further distribution in accordance with this Section 1.7(a).

Stock Options. (a) At Subject to the terms and conditions of the Option Plans (as defined below) and of any option agreements (the "Option Agreements") entered into thereunder, and subject to the receipt of any consents, approvals or waivers necessary under any such plans or agreements, after the Effective Time, each outstanding option or warrant to purchase Shares (a an "Company Stock Option" or collectively "Company Stock Options") issued pursuant to which has been granted under the Company's 1986 Stock Plan for Executive Employees of WTI, the 1988 Stock Option PlanPlan for Executive Employees of WTI, 1990 the WTI 1991 Stock Option Plan, Plan for Non-Employee Directors or the WTI 1992 Key Executive Stock Option PlanPlan (collectively, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock the "Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive Plans") and Nonqualified Stock Option Plan, or other agreement or arrangementis outstanding at the Effective Time, whether vested or unvestednot then exercisable, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of assumed by Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option and shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock the respective Option, a that number of shares of Parent Common Stock Shares (as defined below) equal to the product of (i) that number of shares of Parent Common Stock that Shares as the holder of such Company Stock the Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant the Option in full immediately prior to the Effective Time (not taking into account whether the Option was in fact exercisable at such time) and (ii) the quotient derived by dividing the Merger Consideration by the average of the per-share closing prices on the NYSE of Parent Common Shares (as reported in the NYSE Composite Transactions) during the 10 consecutive trading days ending on the trading day immediately prior to the Effective Time, but rounded up to the next whole number of Parent Common Shares, at a price per share Share equal to (x) the aggregate exercise price for per Share subject to the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product quotient described in Section 4.4(a)(ii) above. As soon as practicable after the Effective Time, Parent shall deliver to each holder of (i) an Option an appropriate notice setting forth the number of Shares otherwise purchasable pursuant holder's right to such Company Stock Optionacquire Parent Common Shares, multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to such option and the Option agreements of each holder shall be deemed to be appropriately amended so that the Options shall represent rights to acquire Parent Common Shares on the same terms and conditions of exercise of such option shall be determined as contained in order to comply with Section 424(a) of the Code.outstanding Options. "

Stock Options. (a) At Each option to purchase Company Common Stock (a "Company Option") that was granted under any employee or director stock option or compensatory plan or other arrangement with the Company prior to the Effective Time, each whether or not exercisable at the Effective Time, and which remains outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant immediately prior to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvestedEffective Time, shall be converted as assumed by Buyer, shall cease to represent a right to acquire shares of Company Common Stock and shall be appropriately adjusted and converted, at the Effective Time, into an option to acquire Buyer Common Stock (the "Buyer Option") under the applicable stock option plan of the Company (all of which plans shall be assumed by Buyer at the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock Time) in accordance with the terms of this Section 1.111.08(a). All plans or agreements described above pursuant The Buyer Option shall entitle the holder to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as purchase from Buyer that number of whole shares of common stock of Buyer, par value $.01 per share (the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquireBuyer Common Stock"), on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the product of the number of shares of Parent Company Common Stock that the holder of were subject to such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price multiplied by 0.0836, rounded down to the nearest whole number of shares of Buyer Common Stock, and the per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant shares of Buyer Common Stock issuable upon exercises of such substituted Buyer Option will be equal to the quotient determined by dividing the exercise price per share of the Company Common Stock at which such Company Stock Option divided was exercisable immediately prior to the Effective Time by (y) 0.0836, rounded up to the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Rationearest whole cent; provided, however, that in the case of any option Option to which Section 421 of the Internal Revenue Code of 1986, as amended, and the rules and regulations adopted pursuant thereto (the "Code") applies by reason of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) Code, the option exercise price, the number of shares purchasable pursuant subject to such option and the terms and conditions of exercise of such option shall be determined in order to comply a manner consistent with the requirements of Section 424(a) of the CodeCode so as not to constitute a "modification" of such option.

Stock Options. Prior to the purchase of shares of Common Stock pursuant to the Offer, the Board of Directors of the Company (aor, if appropriate, any committee administering the Stock Option Plans) shall adopt such resolutions or take such other actions as are necessary to adjust the terms of all outstanding stock options to purchase Common Stock ("Options") heretofore granted to employees and directors under any stock option plan, program or arrangement of the Company (all such stock option plans, employee stock purchase plans, programs and arrangements shall be collectively referred to as the "Stock Option Plans") to provide for the cancellation of such Options as set forth in this Section 2.07. As of the date of the acquisition of shares of Common Stock pursuant to the Offer, each Option then outstanding, whether or not then fully exercisable, shall be canceled in exchange for a payment from the Company (subject to any applicable withholding taxes) equal to the product of (x) the total number of shares of Common Stock subject to such Option and (y) the excess of the consideration paid in the Offer over the exercise price per share of Common Stock subject to such Option, payable in cash on the date of acquisition of the shares of Common Stock pursuant to the Offer. The Purchaser shall make available to the Company on the date of payment for the shares of Common Stock pursuant to the Offer, in the form of a loan payable on the earlier of (i) the Effective Time, and (ii) May 31, 1996, bearing interest per annum at the prime rate of the Firstar Bank Milwaukee, N.A., cash (except for cash payments to be made pursuant to the penultimate sentence of this Section 2.07) in an aggregate amount necessary to make the payments pursuant to the preceding sentence. Except as provided herein, or as otherwise agreed to by the parties (i) the Stock Option Plans shall terminate as of the Effective Time and the provisions in any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company or any subsidiary, shall be deleted as of the Effective Time, and (ii) the Company shall ensure that following the Effective Time no holder of an Option or any participant in any Stock Option Plan or other plans, programs or arrangements shall have any right thereunder to acquire equity securities of the Company, the Surviving Corporation or any subsidiary thereof. Notwithstanding any provision of this Section 2.07 to the contrary, any Option granted to an officer of the Company listed on Schedule 2.07 within six months and one day of the date such Option would otherwise be canceled pursuant to this Section 2.07 shall be canceled and the payments provided for in this Section 2.07 shall be made six months and one day following the date of such grant. At the Effective Time, each outstanding option pursuant to an escrow agreement to be entered into by the parties hereto, the Purchaser shall deposit or warrant cause to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued be deposited with an escrow agent reasonably acceptable to the Company, to be selected by the Purchaser, cash in an aggregate amount necessary to make the payments pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, preceding sentence. Except as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Planmay be set forth on Schedule 2.07(b), or other agreement or arrangementas contemplated by Section 7.01(a) hereof, whether vested or unvested, shall be converted as no consent of any stockholder of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued is or may be issued other than outstanding warrants are referred to collectively as required in connection with the "Company Planstransactions contemplated by this Section 2.07." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code.

Stock Options. (a) At Prior to the Effective Time, each the Company's Board of Directors (or, if appropriate, any committee thereof) shall adopt appropriate resolutions and take all other actions necessary to (i) provide for the cancellation or exercise, effective at the Effective Time, of all the outstanding option stock options or warrant to purchase Shares similar rights (a the "Company Stock Option" or collectively "Company Stock Options") issued pursuant to heretofore granted under the Company's 1988 Equity Incentive Plan of Omega Holdings, Inc. (the "Stock Option Plan"), 1990 without any payment therefor except as otherwise provided in this Section 4.3, and (ii) terminate the Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted Plan as of the Effective Time into options or warrants, as applicableTime. Each Option, to purchase shares the extent unexercised as of Parent Common Stock the Effective Time, shall thereafter no longer be exercisable but shall entitle each holder thereof, in accordance with cancellation and settlement therefor, to a payment in cash by the terms of this Section 1.11. All plans or agreements described above pursuant Company (subject to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as applicable withholding taxes), at the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquireEffective Time, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the total number of Company Common Shares otherwise purchasable pursuant as to such Company Stock Option, multiplied by which that Option remains unexercised and (ii) the Exchange Ratio; providedexcess, howeverif any, that in of (A) the case of any option Merger Price over (B) the exercise price per Company Common Share subject to which such Option (such amounts payable hereunder being referred to as the "Option Payments"). At the Effective Time, Parent or Merger Sub shall deposit, or cause to be deposited, with the Escrow and Paying Agent the aggregate Option Payments due pursuant to this Section 421 4.3 (net of the Code applies by reason of its qualification under Section 422 aggregate principal amount of the Code Management Notes plus accrued interest thereon to the Effective Time held by holders of Options and not otherwise deducted from the Merger Price pursuant to Section 4.2). Upon surrender of the certificate for an Option by the holder of such Option to the Escrow and Paying Agent, the Escrow and Paying Agent shall pay to such Option holder, on behalf of the Company and subject to any applicable withholding taxes, the Option Payments due under this Section 4.3 with respect to such Option. Notwithstanding the foregoing, ("incentive stock options" or "ISOs" i) the option price, Escrow and Paying Agent shall not pay to the number Option holder that portion of shares purchasable the Option Payments represented by the Indemnity Escrow and the Reimbursement Fund until such time as such amounts are distributable pursuant to such option and the terms and conditions of exercise the Indemnity Escrow Agreement, and (ii) the amount to be paid pursuant to this Section 4.3 to any obligor on a Management Note in respect of the Options held by such obligor shall (solely to the extent such obligor's Merger Price was not reduced as a result of such option Management Note pursuant to Section 4.2) be reduced by the principal amount of such Management Note plus accrued interest thereon to the Effective Time and such Management Note shall be determined in order to comply with Section 424(a) of the Codedeemed cancelled thereafter.

Stock Options. (a) At or immediately prior to the Effective Time, each outstanding employee stock option or warrant director stock option to purchase Shares outstanding under any Company stock option plans, whether or not vested or exercisable (each, a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Planshall, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as by virtue of the Effective Time into options or warrantsMerger and without any further action on the part of any holder thereof, as applicable, to purchase shares of be assumed by Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be and deemed to constitute an option (each, a "Parent Option") to acquire, on the same terms and conditions as were applicable under such Company Stock OptionOption (subject to Section 3.04(b)), a the same number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger Section 3.02(c) of this Agreement had such holder exercised such option or warrant Company Option in full immediately prior to the Effective Time (rounded to the nearest whole number), at a price per share (rounded down to the nearest whole cent) equal to (x) the aggregate exercise price for the Shares share of Company Common Stock otherwise purchasable pursuant to such Company Stock Option divided by (y) the product number of whole shares of Parent Common Stock purchasable pursuant to the Parent Option in accordance with the foregoing. The other terms of each such Company Option, and the plans under which they were issued, shall continue to apply in accordance with their terms. (b) Prior to the Effective Time, the Company shall use its reasonable best efforts to (i) the number obtain any consents from holders of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by Options and (ii) make any amendments to the Exchange Ratioterms of such Company Options or Company stock option plans that, in the case of either clauses (i) or (ii), are necessary or appropriate to give effect to the transactions contemplated by Section 3.04(a); provided, however, that in the case lack of consent of any option to which Section 421 holder of a Company Option shall in no way affect the obligations of the Code applies by reason of its qualification under Section 422 of parties to consummate the Code Merger. ("incentive stock options" c) At or "ISOs" ) prior to the option priceEffective Time, the Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares purchasable pursuant of Parent Common Stock for delivery upon exercise of the Parent Options. At or prior to the Effective Time, Parent shall file a registration statement on Form S-8, with respect to the shares of Parent Common Stock subject to such option Parent Options and shall use commercially reasonable efforts to maintain the terms and conditions of exercise effectiveness of such option shall registration statement (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such Parent Options remaining outstanding. With respect to those individuals who subsequent to the Merger will be determined in order subject to comply with the reporting requirements under Section 424(a16(a) of the CodeExchange Act, Parent shall administer the Company stock option plans in a manner consistent with the exemptions provided by Rule 16(b)(3) promulgated under the Exchange Act. Section 3.05. Withholding Rights Each of the Surviving Corporation and Parent shall be entitled to deduct and withhold from the consideration otherwise deliverable to any Person pursuant to this Article 3 such amount as it is required to deduct and withhold with respect to the making of such delivery under any provision of federal, state, local or foreign tax law. If the Surviving Corporation or Parent, as the case may be, so withholds amounts, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Common Stock in respect of which the Surviving Corporation or Parent made such deduction and withholding.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a each "Company Stock OptionCOMPANY STOCK OPTION" or collectively and, collectively, "Company Stock OptionsCOMPANY STOCK OPTIONS") issued pursuant to the Company's 1988 Stock Option 1994 Long-Term Incentive Plan, 1990 Non-Employee Directors' Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option PlanPlans, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company PlansCOMPANY PLANS." Each At the Effective Time, each Company Stock Option shall be deemed to constitute an option to 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 under to such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time Time, rounded down to the nearest whole share, at a price per share equal to (xi) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (yii) the product of (iA) the number of Shares otherwise purchasable pursuant to such Company Stock Option, Option multiplied by (iiB) the Exchange Ratio, rounded up to the nearest cent; 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 optionsINCENTIVE STOCK OPTIONS" or "ISOs" ISOS") Parent may cause the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall to be determined in order so as to comply with Section 424(a) of the Code.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase The Company has reserved 2,578,420 Common Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to for issuance under the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental ’s Stock Plan, as amendedto which Options to purchase an aggregate of 1,330,352 Common Shares are outstanding as of the date of this Agreement and Options to purchase an aggregate of 1,248,068 Common Shares remain available for future grants as of the date hereof. Part 3.2(b) of the Disclosure Schedule accurately sets forth, 1997 Stock with respect to each Option Planthat is outstanding as of the date of this Agreement: (i) the name of the holder of such Option; (ii) the country of residence of the holder of such Option; (iii) the total number of Common Shares that are subject to such Option and the number of Common Shares with respect to which such Option outstanding; (iv) the date on which such Option was granted and the term of such Option; (v) the vesting schedule for such Option and the status of such Option as fully vested, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether partially vested or unvested, shall be converted ; (vi) the exercise price per Common Share purchasable under such Option; (vii) the Stock Plan under which such Option was granted; (viii) whether such Option is intended to qualify as an “incentive stock option” as defined in Section 422 of the Effective Time into options Code; and (ix) whether such Option is subject to Section 409A of the Code. Each grant of an Option was duly authorized no later than the date on which the grant of such Option was by its terms to be effective (the “Grant Date”). The per share exercise price of each Option was equal to or warrantsgreater than the fair market value of a Common Share on the applicable Grant Date, as determined in accordance with Section 409A of the Code. Each grant of an Option has been authorized by all necessary corporate action, including, as applicable, to purchase shares approval by the board of Parent Common directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents. Each award agreement governing the grant of an Option was duly executed and delivered by each party thereto and is in full force and effect. Each grant of an Option was made under a Stock Plan and otherwise in accordance with the terms of this Section 1.11the Stock Plan pursuant to which such Option was granted and all applicable Legal Requirements. All plans or agreements described above The Company has Made Available to Purchaser accurate and complete copies of each Stock Plan, each form of agreement used thereunder and each Contract pursuant to which any Company Option is outstanding. The treatment of Options in accordance with Section 1.2 is permitted under each Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquirePlan, on the same terms and conditions as were all Contracts applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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" ) the option price, the number of shares purchasable pursuant to such option Options and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codeall Legal Requirements.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Drilex Common Stock Option" or collectively "Company Stock Options") issued that has been granted pursuant to the Company's 1988 Drilex Stock Plan ("Drilex Stock Option") shall be treated as set forth in this Section 5.10. Drilex shall not grant any stock appreciation rights or limited stock appreciation rights and shall not permit cash payments to holders of Drilex Stock Options in lieu of the treatment thereof as provided in this Section 5.10. (b) The portion, if any, of each Drilex Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted that is exercisable as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11thereof shall be assumed by Bakex Xxxhxx. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option Xx so assumed, such option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Drilex Stock Option, a number of shares of Parent Common Bakex Xxxhxx Xxxmon Stock equal to the number of shares of Parent Drilex Common Stock that the holder purchasable pursuant to such exercisable portion of such Company Drilex Stock Option would have been entitled to receive pursuant to multiplied by the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time Exchange Ratio, at a price per share equal to (x) the aggregate per-share exercise price for the Shares otherwise shares of Drilex Common Stock purchasable pursuant to such Company Drilex Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; 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 any of sections 422-424 of the Code ("incentive stock options" or "ISOs" ) Code, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code.; and provided further, that the number of shares of Bakex Xxxhxx Xxxmon Stock that may be purchased upon exercise of such Drilex Stock Option shall not include any fractional share and, upon exercise of such Drilex Stock Option, a cash payment shall be made for any fractional share based upon the closing price of a share of Bakex Xxxhxx Xxxmon Stock on the NYSE on the 27 34 last trading day of the calendar month immediately preceding the date of exercise. After the Effective Time, except as provided above in this Section 5.10(b), each assumed option shall be exercisable upon the same terms and conditions as were applicable to the related Drilex Stock Option immediately prior to the Effective Time. (c) Drilex shall take all reasonable action as may be required such that the portion, if any, of each Drilex Stock Option that is not exercisable as of the Effective Time (an "Unexercisable Option") shall be canceled in exchange for the number of shares of Bakex Xxxhxx Xxxmon Stock, decreased to the nearest whole share, having an aggregate market value at the Effective Time (based on the Average Closing Price) equal to the number of shares of Drilex Common Stock subject to such Unexercisable Option multiplied by the excess, if any, of the Drilex Value over the per-share exercise price thereof. To the extent the terms of an Unexercisable Option allow for withholding to satisfy tax obligations, such rights shall apply to the consideration provided for by this Section 5.10(c). (d) Bakex Xxxhxx xxxll take all corporate action necessary to reserve for issuance a sufficient number of shares of Bakex Xxxhxx Xxxmon Stock for delivery upon exercise of the Drilex Stock Options assumed in accordance with this Section 5.10. As soon as practicable after the Effective Time, Bakex Xxxhxx xxxll file with the SEC a registration statement on Form S-8 (or any successor form) or another appropriate form with respect to the shares of Bakex Xxxhxx Xxxmon Stock subject to the Drilex Stock Options and shall use its best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as Drilex Stock Options remain outstanding. 5.11

Stock Options. The Merger Agreement provides that as soon as practicable following the date of the Merger Agreement but in no event later than the consummation of the Offer, the Company (aor, if appropriate, the Board or any committee administering the Stock Option Plans) At the Effective Time, shall (including by adopting resolutions or taking any other actions) take action so as to allow that each outstanding option to purchase Shares (a 'Company Stock Option') granted under any stock option, stock appreciation rights or stock purchase plan, or other right, program, arrangement or agreement of the Company (collectively, the 'Stock Option Plans') and each outstanding warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options"'Warrant') issued pursuant in each case outstanding immediately prior to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as date of the Effective Time into options or warrantsMerger Agreement: (A) to the extent then exercisable, as applicableeither (1) to be cancelled immediately after consummation of the Offer in exchange for an amount in cash, to purchase shares payable at the time of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquiresuch cancellation, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the product of (x) the number of shares of Parent Common Stock that the holder of Shares subject to such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full Warrant immediately prior to the Effective Time at a and (y) the excess, if any, of the price per share equal Share to (x) be paid in the aggregate Offer over the per Share exercise price for the Shares otherwise purchasable pursuant to of such Company Stock Option divided by or Warrant (ythe 'Net Amount') or (2) to be converted immediately prior to the product of (i) Effective Time into the number of Shares otherwise purchasable pursuant right solely to such Company Stock Option, multiplied by (ii) receive the Exchange RatioNet Amount; provided, however, that in no such cash payment has been made or (B) to the case extent not then exercisable, to be canceled immediately after consummation of the Offer. The Company shall not make, or agree to make, any payment of any option kind to which Section 421 any holder of a Company Stock Option or a Warrant (except for the payment described above) without the consent of Parent. The Merger Agreement provides further that subject to the provisions set forth above, all Stock Option Plans and the Employee Stock Purchase Plan shall terminate as of the Code applies by reason Effective Time and the provisions in any other benefit plan providing for the issuance, transfer or grant of its qualification under Section 422 any capital stock of the Code ("incentive Company or any interest in respect of any capital stock options" or "ISOs" ) of the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option Company shall be determined terminated as of the Effective Time. The Merger Agreement provides that the Company shall ensure that following the Effective Time, no holder of a Company Stock Option or Warrant nor any participant in order any Stock Option Plan or the Employee Stock Purchase Plan shall have any right thereunder to comply acquire any capital stock of the Company, Parent or the Surviving Corporation, and that the Company shall use its reasonable best efforts to ensure that following the Effective Time, no holder of any remaining Company Stock Option or Warrant nor any participant in any Stock Option Plan shall have any right thereunder to acquire any capital stock of the Company, Parent or the Surviving Corporation. The Merger Agreement also provides that the Surviving Corporation shall continue to be obligated to pay the Net Amount to holders of any Company Stock Options or Warrants converted in accordance with Section 424(aclause (y) of the Codeimmediately preceding paragraph.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "each “Company Stock Option" or collectively "” and, collectively, “Company Stock Options"”) issued pursuant to the Company's 1988 ’s 1998 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, Plan or any other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.112.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "“Company Plans." Each ” At the Effective Time, each Company Stock Option shall be deemed to constitute an option to 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 under to such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Company Common Stock that the holder of subject to such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time Time, multiplied by the Exchange Ratio, rounded down to the nearest whole share, at a price per share of Parent Common Stock equal to (xi) the aggregate per share exercise price for the Shares shares of Company Common Stock otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio, rounded up to the nearest cent; provided, however, that in the case of any option to Table of Contents which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code ("“incentive stock options" ” or "“ISOs" ) ”), Parent may cause the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall to be determined in order so as to comply with Section 424(a) of the Code. Notwithstanding anything herein to the contrary, each Company Stock Option 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 for a period of at least 90 days after the Effective Time.

Stock Options. (a) At the Effective Time, each Each BB Option outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, shall be treated as applicable, to purchase shares of Parent Common Stock fully exercisable in accordance with the terms of this Section 1.11the applicable BB Option Plan and stock option agreement. All plans Each holder of any such BB Option may exercise any such BB Option by delivering a notice of exercise (a "Notice of Exercise"), the form of which shall be mutually agreeable to VA and BB and which shall contain a waiver or agreements described above pursuant acknowledgment of full satisfaction of all rights in respect of such BB Options, the BB Option Plans and the Employee Plan Grantor Trust, to which any Company Stock the Exchange Agent prior to the Election Deadline and requesting that, in the Scheme, he or she receive in respect of such BB Option has been issued or may be issued other than outstanding warrants are referred to collectively as (i) the excess of the Cash Consideration payable in respect of the BB Common Shares issuable in connection with the exercise of such BB Option over the exercise price payable in respect of such BB Option (the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquireCash Consideration"), on the same terms and conditions as were applicable under such Company Stock Option(a "Cashout Election"), and/or (ii) a number of shares of Parent MINT Common Stock equal to (the number of shares of Parent Common "Option Stock that Consideration" and, together with the holder of such Company Stock Option would have been entitled to receive pursuant to Cash Consideration, the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share "Option Scheme Consideration"), equal to (x) the aggregate exercise price for quotient of (A) the Shares otherwise purchasable pursuant to amount of such Company Stock Option excess divided by (B) the amount of the Cash Consideration (a "Conversion Election") multiplied by (y) the product BB Exchange Ratio of (i) a MINT Common Share, in each case in full and complete satisfaction of his or her rights in respect of such BB Option. Subject to Section 2.12, the number net amount of Shares otherwise purchasable the cash payable in connection with a Cashout Election shall be paid by the Exchange Agent pursuant to Section 2.13(c) without interest to the holder as soon as reasonably practicable following the Effective Time, but in no event more than 5 days following the Effective Time, but subject to reduction for all applicable withholding taxes. Prior to the Effective Time, BB shall take such Company Stock Optionactions, multiplied including, without limitation, action by (ii) the Exchange Ratio; provided, however, that in the case of any option to which Section 421 appropriate committee of the Code applies by reason Board of its qualification under Section 422 Directors of BB, necessary to permit the application of the Code ("incentive stock options" or "ISOs" ) the option price, the number provisions of shares purchasable pursuant Section 2.12 with respect to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codeany Non-Electing BB Options.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares granted by the Company (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 purchase shares of Company Common Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive which is outstanding and Nonqualified Stock Option Plan, or other agreement or arrangement, unexercised (whether vested or unvested, ) immediately prior thereto shall be assumed by Buyer and converted as of the Effective Time automatically into options or warrants, as applicable, an option (a "Buyer Option") to purchase shares of Parent Buyer Common Stock in accordance with an amount and at an exercise price determined as provided below (and otherwise subject to the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company the Company's 1994 Stock Incentive Plan and the Company's 1997 Independent Directors' Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as Plan (collectively, the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to ")): (1) the number of shares of Parent Buyer Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant be subject to the Merger had such holder exercised such new option or warrant in full immediately prior shall be equal to the Effective Time at a product of the number of shares of Company Common Stock subject to the original option and the Exchange Ratio, provided that any fractional shares of Buyer Common Stock resulting from such multiplication shall be rounded down to the nearest whole share; and (2) the exercise price per share of Buyer Common Stock under the new option shall be equal to (x) the aggregate exercise price for per share of Company Common Stock under the Shares otherwise purchasable pursuant to such Company Stock Option original option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, provided that in such exercise price shall be rounded up to the case of nearest whole cent. The adjustment provided herein with respect to any option to options which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code (are "incentive stock options" or "ISOs" (as defined in Section 422 of the Code) the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined and is intended to be effected in order to comply a manner which is consistent with Section 424(a) of the CodeCode and, to the extent it is not so consistent, such Section 424(a) shall override anything to the contrary contained herein. The duration and other terms of the new option shall be the same as the original option, except that all references to the Company shall be deemed to be references to Buyer. (b) Buyer shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Buyer Common Stock for delivery upon exercise of Buyer Options, and, at or prior to the Effective Time, Buyer shall file a registration statement on Form S-8 (or other appropriate form) with respect to the shares of Buyer Common Stock subject to Buyer Options, and shall use its best efforts to maintain the effectiveness of such registration statement for so long as any Buyer Options remain outstanding. 1.6.

Stock Options. (a) At the Effective Time, the outstanding options to ------------- purchase an aggregate of 1,358,595 shares of Company Common Stock (each outstanding option or warrant to purchase Shares a "Stock Option") granted under the Company's 1995 Stock Option Plan and 1996 Non- Employee Director Plan (a the "Company Stock Option" or collectively Option Plans"Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement), whether vested or unvested, shall be converted as , by virtue of the Effective Time into options Merger and without any further action on the part of the Company or warrantsthe holder, as applicable, to purchase shares of be deemed assumed by the Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be and deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option prior to the Effective Time (including terms and conditions relating to such Stock Option's term, a exercisability, vesting schedule and status as an "incentive stock option" under Section 422 of the Code), the number (rounded down to the nearest whole number) of shares of Parent Common Stock equal to the aggregate of that number of shares of Parent Common Stock that (based on the Exchange Ratio) as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant Option in full immediately prior to the Effective Time at a (not taking into account whether or not such Option was in fact exercisable). The exercise price for such Stock Options shall be the price per share equal to (x) the aggregate exercise price for the Shares otherwise Company Common Stock purchasable pursuant to such Company Stock Option, as if such Stock Option was exercised in full, divided by (y) the product of (i) the number of Shares otherwise shares of Parent Common Stock deemed purchasable pursuant to such Company Stock OptionOption (the exercise price per share, multiplied by (ii) so determined, being rounded up to the Exchange Ratio; 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" ) the option price, the nearest full cent). No payment shall be made for fractional shares. The aggregate number of shares purchasable of Parent Common Stock issuable upon the exercise of Options assumed by Parent pursuant to such option and the terms and conditions of exercise of such option this Section 2.2(c) shall be determined referred to in order this Agreement as the "Option Shares." Any adjustment to an incentive stock option made under this Section 2.2(c) shall comply with Section 424(a) of the Code.

Stock Options. (a) At Except as provided in Section 3.4(c) below, the Company shall take all actions (including, but not limited to, obtaining any and all consents from employees to the matters contemplated by this Section 3.4) necessary to provide that all outstanding options and other rights to acquire shares ("Stock Options") granted under any stock option or deferred compensation plan, program or similar arrangement or any employment agreement of the Company or any Subsidiaries other than options, if any, of A&S, each as amended (the "Option Plans"), shall become fully exercisable and vested on the date (the "Vesting Date") which shall be set by the Company and which, in any event, shall be not less than thirty (30) days prior to the Effective Time, each outstanding option whether or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive not otherwise exercisable and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11vested. All plans or agreements described above pursuant to Stock Options which any Company Stock Option has been issued or may be issued other than are outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a shall be cancelled as of the Effective Time and the holders thereof shall be entitled to receive from the Company, for each share of Company Common Stock subject to such Stock Option, (i) an amount in cash equal to the difference between the Cash Consideration and the exercise price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to of such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by which amount shall be payable at the Effective Time, plus (ii) the Exchange Ratio; provided, however, that 0.25 shares of A&S Common Stock (and in the case of any option fractional shares, the Fractional Share Payment), which shall be held by the Depositary pending delivery after the Effective Time. All applicable withholding taxes attributable to which Section 421 the payments made hereunder or to distributions contemplated hereby shall be deducted from the amounts payable under clauses (i) and (ii) above and all such taxes attributable to the exercise of Stock Options on or after the Vesting Date shall be withheld from the proceeds received in the Merger, in respect of the Code applies by reason shares of its qualification under Section 422 of the Code ("incentive stock options" or "ISOs" ) the option price, the number of shares purchasable pursuant to Company Common Stock issuable on such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codeexercise.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time then outstanding Company Options shall by virtue of the Merger, and without any further action on the part of any holder thereof, be assumed by Parent and converted into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a subscribe for that number of shares of Parent Stock (a "Parent Option") obtained by multiplying the number of shares of Company Common Stock equal to underlying each such Company Option by the Exchange Ratio. If the foregoing calculation results in a Parent Option being exercisable for a fraction of a share of Parent Stock, then the number of shares of Parent Common Stock that the holder of subject to such Company Stock Option would have been entitled to receive pursuant option shall be rounded down to the Merger had such holder exercised such option or warrant in full immediately prior nearest whole number of shares. The exercise price of each Parent Option shall be equal to the Effective Time at a price per share equal to (x) the aggregate exercise price for of the Shares otherwise purchasable pursuant to Company Option from which such Company Stock Parent Option was converted divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, howeverrounded to the nearest whole cent. Except as otherwise set forth in this Section 1.4, that in the case of any option to which Section 421 of the Code applies by reason of its qualification term and vesting schedule, status as an "incentive stock option" under Section 422 of the Code Code, if applicable, and all other terms and conditions of Company Options will, to the extent permitted by law and otherwise reasonably practicable, be unchanged. An optionholder's continuous employment with the Company shall be credited as employment with Parent for purposes of vesting of the Parent Options. Other than Company Options which shall become vested and exercisable pursuant to acceleration provisions not entered into in contemplation of the Merger, no Company Options shall become vested or exercisable solely as a result of the Merger. The Company will take, or cause to be taken, all actions which are necessary, proper or advisable under the Stock Plans to make effective the transactions contemplated by this Section 1.4. Item 1.4(a) of the Company Disclosure Letter ("incentive stock options" or "ISOs" as hereinafter defined) sets forth the option pricename of each holder of Company Options, the exercise price of such holder's Company Options, and the number of shares purchasable of Company Common Stock underlying such holder's Company Options which are (i) currently vested, (ii) will vest upon the Closing, and (iii) will be unvested immediately following the Closing, and for the Company Options described in clause (iii), the remaining vesting periods and percentages for such options. The assumption by Parent of the Company Options and their conversion into Parent Options by virtue of the Merger is an obligation of Parent pursuant to such option the Merger and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codetransactions contemplated by this Agreement.

Stock Options. (ai) At the Effective Time, each all issued and outstanding option or warrant to purchase Shares stock options (a "Company Stock Option" or collectively "Company Stock collectively, the “Southwest Options"”) issued pursuant to by Southwest, whether under the Company's 1988 Southwest 2004 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, Plan or other agreement or arrangementnot under any plan, whether vested or unvested, shall be converted as will, by virtue of the Effective Time into options Merger and without any further action on the part of Southwest, Acquisition Co., Parent or warrantsthe holder thereof, as applicable, to purchase shares of be assumed by the Parent Common Stock in accordance with such manner that the terms of this Section 1.11. All plans or agreements described above pursuant Parent (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 Company Stock Option has been issued or may such Southwest Options, would be issued other than outstanding warrants are referred such a corporation were Section 424 of the Code applicable to collectively as such Southwest Options. From and after the "Company Plans." Each Company Stock Option shall Effective Time, all references to Southwest in the Southwest Options will be deemed to constitute an option refer to acquirethe Parent (other than for purposes of determining whether there has been a change in control of Southwest). The Southwest Options assumed by the Parent (collectively, on the “Substitute Options”) will be exercisable upon the same terms and conditions as were applicable under the Southwest Options (including provisions thereof, if any, relating to the acceleration of vesting upon a change in control of Parent) except that (i) such Company Stock Option, a number of shares Southwest Options will entitle the holder to purchase from the Parent one (1) share of Parent Common Stock equal (rounded to the nearest whole number of such shares) for every two (2) shares of Southwest Common Stock that are issuable upon exercise of the Southwest Options as in effect immediately prior to the Effective Time, and (ii) the option exercise price per share of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant shall be an amount (rounded to the Merger had such holder exercised such nearest full cent) equal to the option or warrant exercise price per share of Southwest Common Stock in full effect immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by two (ii) the Exchange Ratio2); provided, however, that in the case of any option Southwest 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" ) ”), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option options shall be determined in order to comply with Section 424(a) of the Code. As promptly as practicable after the Effective Time, the Parent will issue to each holder of a Southwest Option a written instrument informing such holder of the assumption by Parent of such Southwest Option.

Stock Options. (a) At the Effective Time, each outstanding option or warrant to purchase Shares shares of Company Common Stock under the Company Stock Option Plans (each, a "Company Stock ------- Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement), whether vested or unvested, shall be assumed by Parent and converted as of the Effective Time ------ into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Plans." Each Company Stock Option shall be deemed to constitute an option (each, a "Parent Option") to acquire, on substantially the same ------------- terms and conditions conditions, including but not limited to any performance criteria set forth in the applicable stock option agreements (provided, that notwithstanding any termination of employment with Parent or any resignation as a director of the Company, each optionee shall be deemed, solely for the purposes of such Parent Option, to be an employee or director, as the case may be, for the entire term of each such Parent Option), as were applicable under such Company Stock Option, a the number of whole shares of Parent Common Stock equal to the number of shares of Parent Company Common Stock that the holder were issuable upon exercise of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at multiplied by the Exchange Ratio (calculated, if the Election is made, based on the greater of the Parent Average Price determined as set forth in Section 2.1(a)(ii) or a Parent Average Price of $80.00 per share, and in any event rounded down to the nearest whole number of shares of Parent Common Stock), and the per share exercise price of the shares of Parent Common Stock issuable upon exercise of such Parent Option shall be equal to the exercise price per share equal of Company Common Stock at which such Company Option was exercisable immediately prior to the Effective Time divided by the Exchange Ratio (x) calculated, if the aggregate exercise price for Election is made, as set forth above, and in any event rounded up to the Shares otherwise purchasable pursuant to such nearest whole cent). The Company shall not, and shall cause any Company Stock Option divided Plan administrator not to, take any action prior to the Effective Time that will extend the exercise period of any Company Option or cause the vesting period of any Company Option to accelerate under any circumstances (other than as may already be provided by (y) the product terms of (i) the number of Shares otherwise purchasable pursuant to such Company Stock OptionOption or as is contemplated by this Section 2.2(a)), multiplied by (ii) regardless of whether such circumstances are to occur before or after the Exchange Ratio; providedEffective Time, 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" ) the option price, the number of shares purchasable pursuant to such option and otherwise amend the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Codeoutstanding Company Options.