Common use of Company Stock Plans Clause in Contracts

Company Stock Plans. (a) At the Acquisition Merger Effective Time, Nanometrics Delaware shall assume the rights and obligations of the Company with respect to the Company Stock Plans as well as the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate the Company Stock Plans. (b) At the Acquisition Merger Effective Time, each Company Stock Option that is outstanding immediately prior to the Acquisition Merger Effective Time, whether or not then vested or exercisable (each, an "Assumed Option"), shall be assumed by Nanometrics Delaware. Each such Assumed Option shall continue to have, and be subject to, the same terms and conditions as are in effect immediately prior to the Acquisition Merger Effective Time, except that (i) such Assumed Option shall be exercisable for that number of whole shares of Nanometrics Delaware Common Stock equal to the product (rounded down to the next whole number of shares of Nanometrics Delaware Common Stock) of the number of shares of Company Common Stock that were issuable upon exercise of such Assumed Option immediately prior to the Acquisition Merger Effective Time and the Exchange Ratio, and (ii) the per share exercise price for the shares of Nanometrics Delaware Common Stock issuable upon exercise of such Assumed Option shall be equal to the quotient (rounded up to the next whole cent) obtained by dividing the exercise price per share of Company Common Stock at which such Assumed Option was exercisable immediately prior to the Acquisition Merger Effective Time by the Exchange Ratio. It is the intention of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If and to the extent necessary or required by the terms of any of the Company Stock Plans or any Company Stock Option, the Company shall, prior to the Acquisition Merger Effective Time, (i) obtain any consents from holders of Company Stock Options and (ii) amend the terms of its equity incentive plans or arrangements, to give effect to the provisions of Section 7.9(b). The Company shall take no action, other than those actions contemplated by this Agreement, that will cause or result in the accelerated vesting of the Assumed Options. (d) Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercised, in accordance with the terms of the Company ESPP, prior to the Acquisition Merger Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this Agreement. Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP. (e) As soon as practicable following the Acquisition Merger Effective Time, but in any event within fifteen (15) business days thereafter (to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies of the relevant Company Stock Plans), Nanometrics Delaware shall prepare and file with the SEC a registration statement on Form S-8 covering the shares of Nanometrics Delaware Common Stock issuable pursuant to the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under such registration statement shares of Parent Common Stock held by those persons eligible immediately prior to the Closing Date pursuant to the 1995 Director Plan.

Company Stock Plans. (a) At Effective as of and after the Acquisition Merger Effective Time, Nanometrics Delaware shall assume the rights and obligations of the Company with respect to the all outstanding awards (“Company Stock Plans as well as Awards”) of stock options, stock appreciation rights (“SARs”), restricted shares of Common Stock, or units of Common Stock under the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate the Company Stock Plans. (b) At the Acquisition Merger Effective Time, each Company Company’s Stock Option and Stock Appreciation Right Plan (the “SOAR”), or under the Company’s 2002 Omnibus Incentive Plan (the “OI”), that is outstanding immediately prior to remain unexercised or unpaid at the Acquisition Merger Effective Time, whether or not then such awards had become vested or exercisable before such time, and all shares of Common Stock standing to participants’ credit in Stock Accounts maintained for them under, or which are to be credited to their Stock Accounts after the Effective Time pursuant to elections made by them before such time in accordance with, the provisions of the Company’s Nonqualified Deferred Compensation Plan (eachthe “NQDCP” and, an "Assumed Option"collectively with the SOAR and the OI, the “Company Stock Plans”) shall be treated in the manner set forth in the amendments to the Company Stock Plans which are to be adopted by the Company Board of Directors, or by its Management Development and Compensation Committee, pursuant to the resolutions set forth in Annex II to this Agreement, as provided in Section 6.12 hereof. If any option outstanding under the SOAR is exercised at any time after the date of this Agreement and while the Offer remains in effect (the “Offer Period”), the holder thereof shall not be assumed by Nanometrics Delaware. Each such Assumed Option shall continue required to have, and be subject to, pay the same terms and conditions as are in effect immediately prior to the Acquisition Merger Effective Time, except that (i) such Assumed Option shall be exercisable for that number of whole shares of Nanometrics Delaware Common Stock equal to the product (rounded down to the next whole number of shares of Nanometrics Delaware Common Stock) of the number of shares of Company Common Stock that were issuable upon exercise of such Assumed Option immediately prior to the Acquisition Merger Effective Time and the Exchange Ratio, and (ii) the per share exercise price for the shares of Nanometrics Delaware Common Stock issuable as to which the holder intends to exercise the option, and no shares of Common Stock shall be issued or delivered to the holder upon such exercise of the option. Instead, the holder shall be entitled to receive a single lump sum cash payment, in an amount determined by multiplying (i) the number of shares covered by the holder’s exercise of such Assumed Option shall be equal to option, by (ii) the quotient (rounded up to excess of the next whole cent) obtained by dividing Offer Price over the exercise price per share of Company Common Stock at which for such Assumed Option was exercisable immediately prior shares, such lump sum to be paid promptly after the Acquisition Merger Effective Time by if and only if the Exchange Ratio. It is Effective Time occurs (it being understood that if the intention of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) Effective Time does not occur such exercise shall continue be deemed not to so qualify, to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If and to the extent necessary or required by the terms of any of the Company Stock Plans or any Company Stock Option, the Company shall, prior to the Acquisition Merger Effective Time, (i) obtain any consents from holders of Company Stock Options and (ii) amend the terms of its equity incentive plans or arrangements, to give effect to the provisions of Section 7.9(bhave occurred). The Company amount so payable to the holder shall take no action, other than those actions contemplated be reduced by all taxes required by law to be withheld therefrom. As soon as possible after the execution of this Agreement, that will cause or result in the accelerated vesting all holders of the Assumed Options. (d) Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights options under the Company ESPP SOAR shall automatically be exercised, furnished with written notice advising them that their options will be cash settled in accordance with the terms of the Company ESPP, prior to the Acquisition Merger Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this Agreement. Except as otherwise requested by Parent subject to the last sentence provisions of this Section (d), prior to 2.4 if exercised during the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPPOffer Period. (e) As soon as practicable following the Acquisition Merger Effective Time, but in any event within fifteen (15) business days thereafter (to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies of the relevant Company Stock Plans), Nanometrics Delaware shall prepare and file with the SEC a registration statement on Form S-8 covering the shares of Nanometrics Delaware Common Stock issuable pursuant to the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under such registration statement shares of Parent Common Stock held by those persons eligible immediately prior to the Closing Date pursuant to the 1995 Director Plan.

Company Stock Plans. (a) At the Acquisition Merger Effective Time, Nanometrics Delaware shall assume the rights The Company will use reasonable diligence and obligations of the Company with respect timely efforts to cause vested stock options to be exercised prior to the Company Stock Plans as well as the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate the Company Stock Plans.Closing; (b) At the Acquisition Merger Effective Time, each unexercised option to purchase shares of Company Common Stock (a "Company Stock Option that is outstanding immediately prior to the Acquisition Merger Effective Time, whether or not then vested or exercisable (each, an "Assumed Option"), ) under the Company Option Plans shall be assumed by Nanometrics Delaware. Each such Assumed Option shall continue deemed to haveconstitute an option to acquire, and be subject to, on the same terms and conditions as are in effect immediately prior to the Acquisition Merger Effective Timewere applicable under such Company Stock Option, except that (i) such Assumed Option shall be exercisable for that a number of whole shares of Nanometrics Delaware Parent Common Stock equal to the product (rounded down up to the next nearest whole number of shares of Nanometrics Delaware Common Stockshare) of (i) the Conversion Number and (ii) the number of shares of the Company Common Stock that were issuable upon exercise of such Assumed Option immediately prior to the Acquisition Merger Effective Time and the Exchange Ratio, and (ii) the per share exercise price for the shares of Nanometrics Delaware Common Stock issuable upon exercise of the option immediately prior to the Effective Time; and the option exercise price per share of Parent Common Stock at which such Assumed Option option is exercisable shall be equal the amount (rounded down to the quotient (rounded up to the next nearest whole cent) obtained by dividing (iii) the option exercise price per share of Company Common Stock at which such Assumed Option was option is exercisable immediately prior to the Acquisition Merger Effective Time by (iv) the Exchange Ratio. It is Conversion Number; provided, however, that, the intention option price, the number of shares purchasable pursuant to such option and the parties that each Assumed Option that qualified as an incentive stock terms and conditions of exercise of such option (as defined shall be determined in order to comply with Section 422 424(b) of the Code) shall continue to so qualify, to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If and to As soon as practicable after the extent necessary or required by the terms of any of the Company Stock Plans or any Company Stock Option, the Company shall, prior to the Acquisition Merger Effective Time, Parent shall deliver to the participants in the Company Option Plans appropriate notices setting forth such participants' rights pursuant thereto and the grants pursuant to the Company Option Plans shall continue in effect on the same terms and conditions (i) obtain any consents from holders of Company Stock Options and (ii) amend subject to the terms of its equity incentive plans or arrangements, to give adjustments required by this Section after giving effect to the provisions of Section 7.9(bMerger). The Company Parent shall take no action, other than those actions contemplated by this Agreement, that will cause or result in the accelerated vesting of the Assumed Options. (d) Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercised, in accordance comply with the terms of the Company ESPPOption Plans and ensure, to the extent required by, and subject to the provisions of, the Company Option Plans, that the Company Stock Options which qualified as qualified stock options prior to the Acquisition Merger Effective Time continue to qualify as qualified stock options after the Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this Agreement. Except as otherwise requested by Parent subject to the last sentence of this Section . (d), prior to the Acquisition Merger Effective Time, the Company ) Parent shall take all corporate action necessary and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted reserve for issuance a sufficient number of shares of Parent Common Stock for delivery under the Company ESPPOption Plans as adjusted in accordance with this Section. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP. (e) As soon as practicable following after the Acquisition Merger Effective Time, but in any event within fifteen (15) business days thereafter (to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies of the relevant Company Stock Plans), Nanometrics Delaware shall prepare and file with the SEC a registration statement on Form S-8 covering promulgated by the shares of Nanometrics Delaware SEC under the Securities Act (or any successor or other appropriate form) with respect to the Parent Common Stock issuable pursuant subject to such options and shall use its best efforts to maintain the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under effectiveness of such registration statement shares or registration statements (and maintain the current status of Parent Common Stock held by the prospectus or prospectuses contained therein) for so long as such options remain outstanding. With respect to those persons eligible immediately prior individuals who subsequent to the Closing Date pursuant Merger will be subject to the 1995 Director Planreporting requirements under Section 16(a) of the Exchange Act, where applicable, Parent shall administer the Company Option Plans in a manner that complies with Rule 16b-3 promulgated under the Exchange Act.

Company Stock Plans. (a) At the Acquisition Merger Effective Time, Nanometrics Delaware by virtue of the Merger, the Company Stock Plans and the Company Stock Option granted thereunder shall assume be assumed by Lucent, with the rights and result that all obligations of the Company with respect to the Company Stock Plans as well as the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate under the Company Stock Plans. (b) At , including with respect to awards outstanding at the Acquisition Merger Effective Time under each Company Stock Plan, shall be obligations of Lucent following the Effective Time; provided, that in the case of any Company Stock Option to which Section 421 of the Code applies by reason of its qualification under Section 422 or Section 423 of the Code, the option price, number of shares purchasable pursuant to such Company Stock Option and the terms and conditions of exercise of such Company Stock Option shall be determined in order to comply with Section 424 of the Code. Prior to the Effective Time, each Lucent shall take all necessary actions (including, if required to comply with Section 162(m) of the Code (and the regulations thereunder) or applicable law or rule of the NYSE, obtaining the approval of its shareholders at the next regularly scheduled annual meeting of Lucent following the Effective Time) for the assumption of the Company Stock Option that is outstanding immediately prior to Plans, including the Acquisition Merger Effective Timereservation, whether or not then vested or exercisable (each, an "Assumed Option"), shall be assumed by Nanometrics Delaware. Each such Assumed Option shall continue to have, issuance and be subject to, the same terms and conditions as are in effect immediately prior to the Acquisition Merger Effective Time, except that (i) such Assumed Option shall be exercisable for that number listing of whole shares of Nanometrics Delaware Lucent Common Stock in a number at least equal to the product (rounded down to the next whole number of shares of Nanometrics Delaware Common Stock) of the number of shares of Company Lucent Common Stock that were issuable upon exercise of such Assumed Option immediately prior to the Acquisition Merger Effective Time and the Exchange Ratio, and (ii) the per share exercise price for the shares of Nanometrics Delaware Common Stock issuable upon exercise of such Assumed Option shall will be equal to the quotient (rounded up to the next whole cent) obtained by dividing the exercise price per share of Company Common Stock at which such Assumed Option was exercisable immediately prior to the Acquisition Merger Effective Time by the Exchange Ratio. It is the intention of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If and to the extent necessary or required by the terms of any of the Company Stock Plans or any Company Stock Option, the Company shall, prior to the Acquisition Merger Effective Time, (i) obtain any consents from holders of Company Stock Options and (ii) amend the terms of its equity incentive plans or arrangements, to give effect to the provisions of Section 7.9(b). The Company shall take no action, other than those actions contemplated by this Agreement, that will cause or result in the accelerated vesting of the Assumed Options. (d) Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercised, in accordance with the terms of the Company ESPP, prior to the Acquisition Merger Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this AgreementAdjusted Options. Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP. (e) As soon as practicable following the Acquisition Merger Effective Time, but in any event within fifteen (15) business days thereafter (to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies of the relevant Company Stock Plans), Nanometrics Delaware Lucent shall prepare and file with the SEC a registration statement on Form S-8 covering the (or another appropriate form) registering a number of shares of Nanometrics Delaware Lucent Common Stock issuable pursuant to determined in accordance with the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under such preceding sentence. Such registration statement shares shall be kept effective (and the current status of Parent Common the prospectus or prospectuses required thereby shall be maintained) at least for so long as the Adjusted Options or any unsettled awards granted under the Company Stock held by those persons eligible immediately prior to Plans after the Closing Date pursuant to the 1995 Director PlanEffective Time remain outstanding.

Company Stock Plans. (a) At the Acquisition Merger Effective TimeEach outstanding option to purchase Shares issued to employees, Nanometrics Delaware shall assume the rights non- employee directors and obligations consultants of the Company with respect pursuant to the Company Company's Amended and Restated 1992 Incentive Stock Plans as well as Plan and the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate the Company Stock Plans. (b) At the Acquisition Merger Effective Time, each Company 1986 Key Employees Stock Option that is outstanding immediately prior to Plan of Datalogix Formula Systems, Inc. (collectively, the Acquisition Merger Effective Time, "OPTION PLANS") whether or not then vested or exercisable unvested (each, each an "Assumed OptionEMPLOYEE STOCK OPTION"), shall remain outstanding after the Effective Time and shall be assumed by Nanometrics DelawareParent. The parties intend that Parent's assumption of the Employee Stock Options shall be treated as "assuming a stock option in a transaction to which Section 424(a) applies" within the meaning of Section 424 of the Code (as defined in Section 3.11 below) and this subsection (a) shall be interpreted and applied consistent with such intent. Each such Assumed Employee Stock Option assumed by Parent shall continue to have, and be subject to, exercisable upon the same terms and conditions as are in effect immediately prior to under the Acquisition Merger Effective Timeapplicable Option Plan and option agreement issued thereunder, except that (i) such Assumed Option option shall be exercisable for that number of whole shares of Nanometrics Delaware Common Stock common stock of Parent equal to the product of (rounded down to the next whole number of shares of Nanometrics Delaware Common Stockx) of the number of shares Shares for which such option was exercisable and (y) the Merger Consideration divided by the average closing price of Company Parent's Common Stock that were issuable upon exercise of such Assumed Option immediately on the NASDAQ National Market for the five consecutive trading days prior to the Acquisition Merger Effective Time and (the Exchange Ratio"CONVERSION NUMBER"), and (ii) the per share exercise price for the shares of Nanometrics Delaware Common Stock issuable upon exercise of such Assumed Option option shall be equal to the quotient exercise price of such option as of the date hereof divided by the Conversion Number. (rounded up b) Each outstanding option to purchase Shares issued to a non-employee director pursuant to the next whole centCompany's 1995 Director Option Plan (a "DIRECTOR STOCK OPTION"), whether vested or unvested, shall remain outstanding after the Effective Time and shall be assumed by Parent. Each Director Stock Option assumed by Parent shall be exercisable upon the same terms and conditions as under the Company's 1995 Director Option Plan and the applicable option agreement issued thereunder, except that the consideration payable upon exercise in respect of each Share covered by such option shall be the Merger Consideration. (c) obtained As soon as practicable after the Effective Time, Parent shall deliver to the holders of Employee Stock Options and Director Stock Options appropriate notices setting forth such holders' rights pursuant to the Option Plans and the 1995 Director Option Plan and the agreements evidencing the grants of such Employee Stock Options and Director Stock Options shall continue in effect on the same terms and conditions (subject to the adjustments required by dividing this Section 2.4 after giving effect to the exercise price per share Merger). (d) Parent shall register under the Securities Act of Company 1933, as amended (the "SECURITIES ACT"), all shares of Parent Common Stock at which such Assumed Option was exercisable immediately prior subject to the Acquisition Merger Effective Time by the Exchange Ratio. It is the intention options that were formerly Employee Stock Options as of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, to the maximum extent permissible, following the Acquisition Merger Effective Time. (ce) If and to the extent necessary or required by the terms of any of the Company Stock Plans or any Company Stock Option, the Company shall, prior to the Acquisition Merger Effective Time, (i) obtain any consents from holders of Company Stock Options and (ii) amend the terms of its equity incentive plans or arrangements, to give effect to the provisions of Section 7.9(b). The Company shall take no action, other than those all actions contemplated by this Agreement, that will reasonably necessary to cause or result the last day of the "OFFERING PERIOD" (as such term is used in the accelerated vesting Company's 1995 Employee Stock Purchase Plan (the "1995 ESPP") to be the date immediately prior to the Closing Date (the "FINAL PURCHASE DATE"), and apply on the Final Purchase Date the funds within each participant's withholdings account on the Final Purchase Date to the purchase on the Final Purchase Date of whole Shares in accordance with the terms of the Assumed Options1995 ESPP. (df) Except as otherwise requested by Parent subject Prior to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercised, in accordance with the terms of the Company ESPP, prior required to the Acquisition Merger Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this Agreement. Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP. (e) As soon as practicable following the Acquisition Merger Effective Time, but in any event within fifteen (15) business days thereafter (to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies of the relevant Company Stock Plans), Nanometrics Delaware shall prepare and file with the SEC a registration statement on Form S-8 covering the shares of Nanometrics Delaware Common Stock issuable pursuant to the outstanding Assumed Options, Nanometrics Delaware shall cause the same exercise price on all options to purchase Shares that are then outstanding and that have an exercise price in excess of $8.00 per Share to be changed to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under such registration statement shares of Parent Common Stock held by those persons eligible immediately prior to the Closing Date pursuant to the 1995 Director Plan$8.00 per Share.

Company Stock Plans. (a) At the Acquisition Merger Effective Time, Nanometrics Delaware each option to purchase shares of Common Stock outstanding under the Company's 1998 Non-Qualified Stock Option Plan and 1996 Stock Plan shall assume terminate and each holder thereof shall receive in exchange for such termination a cash payment equal, subject to Section 5.5(f) below, to the rights excess of (i) Merger Price times the number of shares of Common Stock subject to such option which are vested and obligations exercisable (including such number of shares that become vested and exercisable under the applicable option terms as a result of the Company with respect to transactions contemplated by this Agreement), over (b) the Company Stock Plans as well as the duties aggregate exercise price of such option. The fair market value of the Company with respect Common Stock on the Effective Time shall be deemed to equal the administration of such plans such that Nanometrics Delaware may operate the Company Stock PlansMerger Price. (b) At the Acquisition Merger Effective Time, each Company option to purchase shares of Common Stock outstanding under the Company's 1995 Employee Stock Option that is outstanding immediately prior Plan and 1995 Incentive Stock Option Plan (the "1995 Options") shall convert automatically ------------ into a right to receive upon exercise thereafter and subject to any continuing vesting provisions applicable to the Acquisition option the Merger Effective Time, whether or not then vested or exercisable (each, an "Assumed Option"), shall be assumed by Nanometrics Delaware. Each such Assumed Option shall continue to have, and be subject to, the same terms and conditions as are in effect immediately prior to the Acquisition Merger Effective Time, except that (i) such Assumed Option shall be exercisable for that number of whole shares of Nanometrics Delaware Common Stock equal to the product (rounded down to the next whole number of shares of Nanometrics Delaware Common Stock) of Price times the number of shares being exercised. No shares of Company Common Stock that were issuable shall be issued upon exercise of such Assumed Option immediately prior to the Acquisition Merger Effective Time and 1995 Options after the Exchange Ratio, and (ii) the per share exercise price for the shares of Nanometrics Delaware Common Stock issuable upon exercise of such Assumed Option shall be equal to the quotient (rounded up to the next whole cent) obtained by dividing the exercise price per share of Company Common Stock at which such Assumed Option was exercisable immediately prior to the Acquisition Merger Effective Time by the Exchange Ratio. It is the intention of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If and to At the extent necessary or required by the terms of any of the Company Stock Plans or any Company Stock Option, the Company shall, prior to the Acquisition Merger Effective Time, each option outstanding under the Company's 1996 Employee Stock Purchase Plan (ithe "Purchase Plan") obtain any consents from holders shall terminate and the ------------- holder of Company Stock Options and (iieach such option shall receive in exchange therefor a cash payment equal, subject to Section 5.5(f) amend the terms of its equity incentive plans or arrangementsbelow, to give effect the excess of (a) the Merger Price times the number of shares of Common Stock that the holder's accumulated payroll deductions as of the Effective Time could purchase, at an option price determined with reference only to the provisions first business day of Section 7.9(bthe applicable Payment Period (as defined in the Purchase Plan) and subject to the limitations imposed by the Purchase Plan (including the limitation that no option with respect to a single Payment Period be exercised for more than 250 shares of Common Stock), over (b) the product of such number of shares times the option price. The Company shall take no action, other than those actions contemplated by this Agreement, that will cause or result in the accelerated vesting fair market value of the Assumed OptionsCommon Stock at the Effective Time shall be deemed to equal the Merger Price. (d) Except as otherwise requested by Parent subject Prior to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and actions (including if appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercised, in accordance with amending the terms of the Company ESPP, prior Stock Option Plans and the Purchase Plan and obtaining the consent of holders of Stock Options or stock purchase rights) that are necessary to give effect to the Acquisition Merger Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this Agreement. Except as otherwise requested transactions contemplated by Parent subject to the last sentence of this Section (dSections 5.5(a), prior to the Acquisition Merger Effective Time, the Company shall take all necessary (b) and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP(c). (e) As soon as practicable following The Company shall take all steps required to terminate the Acquisition Merger Company Stock Option Plans and the Purchase Plan immediately after the Effective Time. (f) Payments pursuant to Sections 5.5(a), but in (b) and (c) above shall be subject to any event within fifteen (15) business days thereafter (applicable tax withholding required under the Code, the rules and regulations thereunder or any provision of state, local or foreign tax law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies holder of the relevant Company Stock Plans), Nanometrics Delaware shall prepare and file with the SEC a registration statement on Form S-8 covering the shares of Nanometrics Delaware Common Stock issuable pursuant to the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under such registration statement shares of Parent Common Stock held by those persons eligible immediately prior to the Closing Date pursuant to the 1995 Director PlanOptions and/or stock purchase rights.

Company Stock Plans. (a) At Not later than the Acquisition Merger Effective Time, Nanometrics Delaware shall assume the rights and obligations of the Company with respect to the Company Stock Plans as well as the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate the Company Stock Plans. (b) At the Acquisition Merger Effective Time, each ------------------- Company Stock Option that which is outstanding immediately prior to the Acquisition Merger Effective Time, whether or not then vested or exercisable (each, Time pursuant to a Company Stock Option Plan shall become and represent an "Assumed Option"), shall be assumed by Nanometrics Delaware. Each such Assumed Option shall continue option to have, and be subject to, purchase the same terms and conditions as are in effect immediately prior to the Acquisition Merger Effective Time, except that (i) such Assumed Option shall be exercisable for that number of whole shares of Nanometrics Delaware Common Stock equal to the product (rounded down to the next whole number of shares of Nanometrics Delaware Parent Common StockStock (a "Substitute Option") of (decreased to the nearest full share) determined by multiplying (i) the number of shares of Company Common Stock that were issuable upon exercise of subject to such Assumed Company Stock Option immediately prior to the Acquisition Merger Effective Time and by (ii) the Exchange Ratio, and (ii) the at an exercise price per share exercise price for the shares of Nanometrics Delaware Parent Common Stock issuable upon exercise of such Assumed Option shall be equal to the quotient (rounded up to the next whole nearest cent) obtained by dividing equal to the exercise price per share of Company Common Stock at which such Assumed Option was exercisable immediately prior to the Acquisition Merger Effective Time divided by the Exchange Ratio. It is After the intention of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If , except as provided above in this Section 5.7, each Substitute Option shall be exercisable upon the same terms and to conditions as were applicable under the extent necessary or required by the terms of any of the related Company Stock Plans Option immediately prior to or at the Effective Time. The Company shall, if so requested by Parent, use reasonable best efforts to obtain any Company Stock Optionconsents that may be required in connection with implementing the provisions of this Section 5.7 (it being understood that, in connection with any such consents that may be so required, the Company shallwill have satisfied its obligation under this Agreement relating thereto if it has used reasonable best efforts to obtain such consents, prior to whether or not successful) or provide any notice or take any other similar action reasonably requested in connection therewith. As soon as reasonably practicable, and in no event later than ten days after the Acquisition Merger Effective Time, (i) obtain any consents from holders of Company Stock Options and (ii) amend the terms of its equity incentive plans or arrangements, to give effect to the provisions of Section 7.9(b). The Company Parent shall take no action, other than those actions contemplated by this Agreement, that will cause or result in the accelerated vesting of the Assumed Options. (d) Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercised, in accordance with the terms of the Company ESPP, prior to the Acquisition Merger Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this Agreement. Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP. (e) As soon as practicable following the Acquisition Merger Effective Time, but in any event within fifteen (15) business days thereafter (to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies of the relevant Company Stock Plans), Nanometrics Delaware shall prepare and file with the SEC a registration statement on Form S-8 covering the shares of Nanometrics Delaware (or any successor or other appropriate form) with respect to Parent Common Stock issuable subject to such Substitute Options, or shall cause such Substitute Options to be deemed to be issued pursuant to the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and a Parent shall take such further actions as may be reasonably necessary to cover under such registration statement Stock Plan for which shares of Parent Common Stock held have been previously registered pursuant to an appropriate registration form. (b) As of the Effective Time, the right of each nonemployee director of the Company who has elected to receive shares of Company Common Stock pursuant to the deferred stock compensation program maintained by those persons eligible the Company shall become and represent a right to receive the number of shares of Parent Common Stock (decreased to the nearest whole share) determined by multiplying (i) the number of shares of Company Common Stock which would be issuable to such nonemployee director if he or she ceased serving as a director immediately prior to the Closing Date pursuant Effective Time by (ii) the Exchange Ratio. Such shares of Parent Common Stock shall be issued to such nonemployee director as soon as practicable after the 1995 Director PlanEffective Time.

Company Stock Plans. (a) At the Acquisition Merger Effective Time, Nanometrics Delaware by virtue of the ------------------- Merger, the Company Stock Plans and the Company Stock Options granted thereunder shall assume be assumed by Lucent, with the rights and result that all obligations of the Company with respect to the Company Stock Plans as well as the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate under the Company Stock Plans. (b) At , including with respect to awards outstanding at the Acquisition Merger Effective Time under each Company Stock Plan, shall be obligations of Lucent following the Effective Time; provided, that in the case of any Company Stock -------- Option to which Section 421 of the Code applies by reason of its qualification under Section 422 or Section 423 of the Code, the option price, number of shares purchasable pursuant to such Company Stock Option and the terms and conditions of exercise of such Company Stock Option shall be determined in order to comply with Section 424 of the Code. Prior to the Effective Time, each Lucent shall take all necessary actions (including, if required to comply with Section 162(m) of the Code (and the regulations thereunder) or applicable law or rule of the NYSE, obtaining the approval of its stockholders at the next regularly scheduled annual meeting of Lucent following the Effective Time) for the assumption of the Company Stock Option that is outstanding immediately prior to Plans, including the Acquisition Merger Effective Timereservation, whether or not then vested or exercisable (each, an "Assumed Option"), shall be assumed by Nanometrics Delaware. Each such Assumed Option shall continue to have, issuance and be subject to, the same terms and conditions as are in effect immediately prior to the Acquisition Merger Effective Time, except that (i) such Assumed Option shall be exercisable for that number listing of whole shares of Nanometrics Delaware Lucent Common Stock in a number at least equal to the product (rounded down to the next whole number of shares of Nanometrics Delaware Common Stock) of the number of shares of Company Lucent Common Stock that were issuable upon exercise of such Assumed Option immediately prior to the Acquisition Merger Effective Time and the Exchange Ratio, and (ii) the per share exercise price for the shares of Nanometrics Delaware Common Stock issuable upon exercise of such Assumed Option shall will be equal to the quotient (rounded up to the next whole cent) obtained by dividing the exercise price per share of Company Common Stock at which such Assumed Option was exercisable immediately prior to the Acquisition Merger Effective Time by the Exchange Ratio. It is the intention of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If and to the extent necessary or required by the terms of any of the Company Stock Plans or any Company Stock Option, the Company shall, prior to the Acquisition Merger Effective Time, (i) obtain any consents from holders of Company Stock Options and (ii) amend the terms of its equity incentive plans or arrangements, to give effect to the provisions of Section 7.9(b). The Company shall take no action, other than those actions contemplated by this Agreement, that will cause or result in the accelerated vesting of the Assumed Options. (d) Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercised, in accordance with the terms of the Company ESPP, prior to the Acquisition Merger Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this AgreementAdjusted Options. Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP. (e) As soon as practicable following the Acquisition Merger Effective Time, but in any event within fifteen (15) business days thereafter (to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies of the relevant Company Stock Plans), Nanometrics Delaware Lucent shall prepare and file with the SEC a registration statement on Form S-8 covering the (or another appropriate form) registering a number of shares of Nanometrics Delaware Lucent Common Stock issuable pursuant to determined in accordance with the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under such preceding sentence. Such registration statement shares shall be kept effective (and the current status of Parent Common the prospectus or prospectuses required thereby shall be maintained) at least for so long as the Adjusted Options or any unsettled awards granted under the Company Stock held by those persons eligible immediately prior to Plans after the Closing Date pursuant to the 1995 Director PlanEffective Time remain outstanding.

Company Stock Plans. (a) At The Company will take all actions necessary to provide that, upon the Acquisition Merger Effective Time, Nanometrics Delaware shall assume each outstanding option (each, an "Option") to purchase Common Stock under the rights Company's Stock Option Plan (the "Option Plan"), whether or not then exercisable or vested, will either (i) become fully exercisable and obligations of the Company with respect to the Company Stock Plans as well as the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate the Company Stock Plansvested or (ii) expire and be extinguished. (b) At As soon as practicable after the Acquisition Merger Effective Timedate hereof, each the Company Stock will deliver to holders of Options appropriate notices setting forth such holders' rights pursuant to the Option that is outstanding Plan, the agreements evidencing the grants of such Options and this Agreement. Options which are exercisable immediately prior to the Acquisition Merger Effective Time will assumed by Reitco pursuant to and in accordance with Section 3.2(c). (c) At the Effective Time, whether or not then vested or the Company's obligations with respect to each Option which is exercisable immediately prior to the Effective Time that is set forth on Section 4.2 of the Company Disclosure Schedule will be assumed by Reitco (each, an "Assumed Option"), shall be assumed by Nanometrics Delaware. Each such The Assumed Option shall Options will continue to have, and be subject to, the same terms and conditions as are set forth in the Option Plan and related option agreements (as in effect immediately prior to the Acquisition Merger Effective Time) pursuant to which the Assumed Options were issued, except provided that (i) such all references to the Company will be deemed to be references to Reitco and Opco, and all references to the Common Stock will be deemed to be references to Paired Shares, (ii) each Assumed Option shall will be exercisable for that number of whole shares of Nanometrics Delaware Common Stock Paired Shares equal to the product (rounded down to the next whole number of shares of Nanometrics Delaware Common Stock) of the number of shares of Company the Common Stock that were issuable upon exercise of such covered by the Assumed Option immediately prior to the Acquisition Merger Effective Time and multiplied by the Exchange RatioRatio and rounded to the nearest whole number of Paired Shares, and (iiiii) the per share exercise price for the shares of Nanometrics Delaware Common Stock issuable upon exercise of such Assumed Option shall be equal to the quotient (rounded up to the next whole cent) obtained by dividing the exercise price per share of Company Paired Shares under each Assumed Option will be equal to the exercise price per share of the Common Stock at which such under the Assumed Option was exercisable immediately prior to the Acquisition Merger Effective Time divided by the Exchange Ratio. It is the intention of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, rounded to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If and nearest cent. Pursuant to the extent necessary or required by the terms of any of the Company Stock Plans or any Company Stock Option, the Company shall, prior to the Acquisition Merger Effective Time, (i) obtain any consents from holders of Company Stock Options and (ii) amend the terms of its equity incentive plans or arrangements, to give effect to the provisions of Section 7.9(b). The Company shall take no action, other than those actions contemplated by this Agreement, Reitco and Opco will (A) reserve for issuance or hold the number of Paired Shares that will cause or result in become issuable upon the accelerated vesting exercise of such Assumed Options pursuant to this Section 3.2(c) and (B) promptly after the Effective Time issue to each holder of an outstanding Assumed Option a document evidencing the assumption by Reitco of the Assumed Options. (d) Except as otherwise requested by Parent subject to the last sentence of Company's obligations with respect thereto under this Section (d3.2(c), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercised, in accordance with the terms of the Company ESPP, prior to the Acquisition Merger Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this Agreement. Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP. (e) As soon as practicable following the Acquisition Merger Effective Time, but in any event within fifteen (15) business days thereafter (to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies of the relevant Company Stock Plans), Nanometrics Delaware shall prepare and file with the SEC a registration statement on Form S-8 covering the shares of Nanometrics Delaware Common Stock issuable pursuant to the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under such registration statement shares of Parent Common Stock held by those persons eligible immediately prior to the Closing Date pursuant to the 1995 Director Plan.

Company Stock Plans. (a) At the Acquisition Merger Effective Time, Nanometrics Delaware by virtue of the Merger, the Company Stock Plans and the Company Stock Options granted thereunder shall assume be assumed by Lucent, with the rights and result that all obligations of the Company with respect to the Company Stock Plans as well as the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate under the Company Stock Plans. (b) At , including with respect to awards outstanding at the Acquisition Merger Effective Time under each Company Stock Plan, shall be obligations of Lucent following the Effective Time; provided, that in the case of any Company Stock Option to which Section 421 of the Code applies by reason of its qualification under Section 422 or Section 423 of the Code, the option price, number of shares purchasable pursuant to such Company Stock Option and the terms and conditions of exercise of such Company Stock Option shall be determined in order to comply with Section 424 of the Code. Prior to the Effective Time, each Lucent shall take all necessary actions (including, if required to comply with Section 162(m) of the Code (and the regulations thereunder) or applicable law or rule of the NYSE, obtaining the approval of its stockholders at the next regularly scheduled annual meeting of Lucent following the Effective Time) for the assumption of the Company Stock Option that is outstanding immediately prior to Plans, including the Acquisition Merger Effective Timereservation, whether or not then vested or exercisable (each, an "Assumed Option"), shall be assumed by Nanometrics Delaware. Each such Assumed Option shall continue to have, issuance and be subject to, the same terms and conditions as are in effect immediately prior to the Acquisition Merger Effective Time, except that (i) such Assumed Option shall be exercisable for that number listing of whole shares of Nanometrics Delaware Lucent Common Stock in a number at least equal to the product (rounded down to the next whole number of shares of Nanometrics Delaware Common Stock) of the number of shares of Company Lucent Common Stock that were issuable upon exercise of such Assumed Option immediately prior to the Acquisition Merger Effective Time and the Exchange Ratio, and (ii) the per share exercise price for the shares of Nanometrics Delaware Common Stock issuable upon exercise of such Assumed Option shall will be equal to the quotient (rounded up to the next whole cent) obtained by dividing the exercise price per share of Company Common Stock at which such Assumed Option was exercisable immediately prior to the Acquisition Merger Effective Time by the Exchange Ratio. It is the intention of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If and to the extent necessary or required by the terms of any of the Company Stock Plans or any Company Stock Option, the Company shall, prior to the Acquisition Merger Effective Time, (i) obtain any consents from holders of Company Stock Options and (ii) amend the terms of its equity incentive plans or arrangements, to give effect to the provisions of Section 7.9(b). The Company shall take no action, other than those actions contemplated by this Agreement, that will cause or result in the accelerated vesting of the Assumed Options. (d) Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercised, in accordance with the terms of the Company ESPP, prior to the Acquisition Merger Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this AgreementAdjusted Options. Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP. (e) As soon as practicable following the Acquisition Merger Effective Time, but in any event within fifteen (15) business days thereafter (to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies of the relevant Company Stock Plans), Nanometrics Delaware Lucent shall prepare and file with the SEC a registration statement on Form S-8 covering the (or another appropriate form) registering a number of shares of Nanometrics Delaware Lucent Common Stock issuable pursuant to determined in accordance with the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under such preceding sentence. Such registration statement shares shall be kept effective (and the current status of Parent Common the prospectus or prospectuses required thereby shall be maintained) at least for so long as the Adjusted Options or any unsettled awards granted under the Company Stock held by those persons eligible immediately prior to Plans after the Closing Date pursuant to the 1995 Director PlanEffective Time remain outstanding.

Company Stock Plans. (a) At Except as otherwise agreed upon in writing between the Acquisition Merger Effective Timeholder and Parent, Nanometrics Delaware shall assume the rights and obligations effective as of the Company with respect immediately prior to the Company Stock Plans as well as the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate the Company Stock Plans. (b) At the Acquisition Merger Effective Time, each then-outstanding and unexercised Company Stock Option that is outstanding immediately prior shall automatically be canceled and converted into the right to receive from the Acquisition Merger Effective Time, whether or not then vested or exercisable (each, Surviving Corporation an "Assumed Option"), shall be assumed by Nanometrics Delaware. Each such Assumed Option shall continue to have, and be subject to, the same terms and conditions as are in effect immediately prior to the Acquisition Merger Effective Time, except that (i) such Assumed Option shall be exercisable for that number amount of whole shares of Nanometrics Delaware Common Stock cash equal to the product of (rounded down to i) the next whole number of shares of Nanometrics Delaware Common Stock) of the total number of shares of Company Common Stock that were issuable upon exercise of then underlying such Assumed Company Stock Option immediately prior to the Acquisition Merger Effective Time and the Exchange Ratio, and multiplied by (ii) the per share exercise price for excess, if any, of the shares of Nanometrics Delaware Common Stock issuable upon exercise of such Assumed Option shall be equal to the quotient (rounded up to the next whole cent) obtained by dividing Merger Consideration over the exercise price per share of such Company Common Stock at which Option, without any interest thereon and subject to all applicable withholding. Parent shall cause the Surviving Corporation to pay the aggregate amount payable by the Surviving Corporation to the holders of such Assumed Company Stock Options pursuant to the preceding sentence, without any interest thereon and subject to all applicable withholding, upon the later of (A) five (5) Business Days after the Closing Date and (B) the date of the Company's first regularly scheduled payroll after the Closing Date. In the event that the exercise price of any Company Stock Option was exercisable is equal to or greater than the Merger Consideration, such Company Stock Option shall be canceled, without any consideration being payable in respect thereof, and have no further force or effect. (b) Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the Acquisition Effective Time: (i) each Company RSU that will become vested, by its terms, as a result of the Closing of the Merger shall automatically be canceled and converted into the right to receive from the Surviving Corporation an amount of cash equal to the product of (A) the total number of shares of Company Common Stock then underlying such Company RSU multiplied by (B) the Merger Consideration. Parent shall cause the Surviving Corporation to pay the aggregate amount payable by the Surviving Corporation to the holders of such Company RSUs pursuant to the preceding sentence, without any interest thereon and subject to all applicable withholding, upon the later of (I) five (5) Business Days after the Closing Date and (II) the date of the Company's first regularly scheduled payroll after the Closing Date; (ii) each Company RSU that will not be vested, by its terms, on or before the Closing Date shall automatically be canceled and converted into the contingent right to receive from the Surviving Corporation an amount of cash equal to the product of (A) the total number of shares of Company Common Stock then underlying such Company RSU multiplied by (B) the Merger Consideration; provided that such cash payment shall not be paid at the Effective Time but shall instead be subject to the holder of such Company RSU being in continuous service to the Surviving Corporation as an employee or consultant until the earlier of (I) any date on which the original vesting conditions applicable to the underlying Company RSU, including, and taking into account, any accelerated vesting provisions set forth therein, are satisfied and (II) the date 180 days following the Closing Date (such earlier date, the "RSU Vesting Date"). Parent shall cause the Surviving Corporation to pay the Merger Consideration applicable to such Company RSU to the holder of such Company RSU, without any interest thereon and subject to all applicable withholding, upon the later of (x) five (5) Business Days after the RSU Vesting Date and (y) the date of the Company's first regularly scheduled payroll after the RSU Vesting Date; and (iii) each Company July 0000 XXX that will not be vested, by its terms, on or before the Exchange Ratio. It Closing Date shall automatically be canceled and converted into the contingent right to receive from the Surviving Corporation an amount of cash equal to the product of (A) the total number of shares of Company Common Stock then underlying such Company July 0000 XXX multiplied by (B) the Merger Consideration; provided that such cash payment shall not be paid at the Effective Time but shall instead be subject to the holder of such Company July 0000 XXX being in continuous service to the Surviving Corporation as an employee or consultant until the earlier of (I) any date on which the original vesting conditions applicable to the underlying Company July 2017 RSU, including, and taking into account, any accelerated vesting provisions set forth therein, are satisfied and (II) the date that is the intention last day of the parties that each Assumed Option that qualified as an incentive stock option 10th month following the Closing Date (as defined in Section 422 such earlier date, the "July 0000 XXX Vesting Date"). Parent shall cause the Surviving Corporation to pay the Merger Consideration applicable to such Company July 0000 XXX to the holder of such Company July 2017 RSU, without any interest thereon and subject to all applicable withholding, upon the later of (x) five (5) Business Days after the July 0000 XXX Vesting Date and (y) the date of the Code) shall continue to so qualify, to Company's first regularly scheduled payroll after the maximum extent permissible, following the Acquisition Merger Effective TimeJuly 0000 XXX Vesting Date. (c) If Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the extent necessary or required Effective Time: (i) each Company Performance Share Award that is then outstanding and unvested and that is held by the terms of any a former employee of the Company Stock Plans or any Company Stock Option, the Company shall, (as determined immediately prior to the Acquisition Merger Effective Time, (i) obtain any consents from holders of Company Stock Options and (ii) amend the terms of its equity incentive plans or arrangements, to give effect to the provisions of Section 7.9(b). The Company shall take no action, other than those actions contemplated by this Agreement, that will cause or result in the accelerated vesting of the Assumed Options. (d) Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercisedcanceled and converted into the right to receive from the Surviving Corporation an amount of cash equal to the product of (A) the target number of shares of Company Common Stock subject to such Company Performance Share Award, as pro-rated in accordance with the terms of the applicable Company ESPPPerformance Share Award agreement, multiplied by (B) the Merger Consideration. Parent shall cause the Surviving Corporation to pay the aggregate amount payable by the Surviving Corporation to the holders of such Company Performance Share Awards pursuant to the preceding sentence, without any interest thereon and subject to all applicable withholding, upon the later of (x) five (5) Business Days after the Closing Date and (y) the date of the Company's first regularly scheduled payroll after the Closing Date; and (ii) each Company Performance Share Award that is then outstanding and unvested and that is held by a person who is an employee of the Company immediately prior to the Acquisition Merger Effective Time, Time shall automatically be canceled and converted into the contingent right to receive from the Surviving Corporation an amount of cash equal to the product of (A) the target number of shares of Company Common Stock purchased under those exercised rights subject to such Company Performance Share Award multiplied by (B) the Merger Consideration; provided that such cash payment shall not be paid at the Acquisition Merger Effective Time but shall instead be cancelled subject to the holder of such Company Performance Share Award being in continuous service to the Surviving Corporation as an employee or consultant until the earlier of (A) the date on which the original vesting conditions applicable to the underlying Company Performance Share Award, including, and converted taking into account, any accelerated vesting provisions set forth therein, are satisfied and (B) the right date 180 days following the Closing Date (such earlier date, the "Performance Share Vesting Date"). Parent shall cause the Surviving Corporation to receive shares pay the Merger Consideration applicable to such Company Performance Share Award to the holder of Nanometrics Delaware Common Stock such Company Performance Share Award, without interest thereon and subject to all applicable withholding, upon the later of (x) five (5) Business Days after the Performance Share Vesting Date and (y) the date of the Company's first regularly scheduled payroll after the Performance Share Vesting Date, provided that in no event shall the amount payable pursuant to this Section 2.3(c)(ii) be paid later than March 15 of the calendar year following the year in which the Closing occurs. (d) The Parent shall cause the Surviving Corporation to maintain at all times from and after the Effective Time sufficient liquid funds to satisfy its obligations pursuant to Section 2.6(a) of this Agreement. Except as otherwise requested by Parent subject to the last sentence of this Section (d2.3(a), prior to the Acquisition Merger Effective Time, the Company shall take all necessary Section 2.3(b) and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPPSection 2.3(c). (e) As soon as practicable following the Acquisition Merger execution of this Agreement, (i) the Company shall mail or provide via email to each Person who is a holder of Company Stock Options, Company RSUs, Company July 0000 XXXx or Company Performance Share Awards a letter describing the treatment of and payment for such equity awards pursuant to this Section 2.3 and providing instructions for use in obtaining payment therefor, and (ii) the Company Board shall take all such actions as are required to provide for the treatment of such equity awards pursuant to this Section 2.3 and the termination of the Company Stock Plans conditioned upon, and effective immediately after, the Effective Time, but . (f) The Parent and the Company may agree to treat equity compensation held by Company employees subject to non-U.S. law in any event within fifteen (15) business days thereafter (a manner other than that contemplated above in this Section 2.3 to the extent Parent necessary to take into account applicable non-U.S. law or Nanometrics DelawareTax or employment considerations. (g) The only "Offering Period" in effect as of the date of this Agreement (as such term is defined in the Company ESPP) ends June 30, 2017 (which is the "Exercise Date" (as such term is defined in the Company ESPP) for such Offering Period). Any options granted under the Company ESPP with respect to such Offering Period that are outstanding as of such June 30, 2017 Exercise Date shall be exercised on such date in accordance with the existing terms of the Company ESPP. As soon as practicable following the date of this Agreement, the Company Board shall take all such actions as are required to provide that, (i) no new Offering Periods will commence, nor will the existing Offering Period be extended, following the date of this Agreement; (ii) no new individuals will be permitted to enroll in the Company ESPP following the date of this Agreement; (iii) with respect to the Offering Period in effect as of the date of this Agreement, no existing participant will be permitted to increase his or her rate of deductions and purchases following the date of this Agreement; and (iv) no shares of Company Common Stock will be issued under the Company ESPP except with respect to the June 30, 2017 Exercise Date, as appropriateset forth above. In any event, have received the most recent copies of Company Board shall terminate the relevant Company Stock Plans), Nanometrics Delaware shall prepare and file with the SEC a registration statement on Form S-8 covering the shares of Nanometrics Delaware Common Stock issuable pursuant to the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under such registration statement shares of Parent Common Stock held by those persons eligible immediately ESPP prior to the Closing Date pursuant to the 1995 Director PlanEffective Time.

Company Stock Plans. (a) At the Acquisition Merger Effective Time, Nanometrics Delaware shall assume the rights and obligations of the Company with respect to the Company Stock Plans as well as the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate the Company Stock Plans. (b) At the Acquisition Merger Effective Time, each Company Stock Option that is outstanding immediately prior to the Acquisition Merger Effective Time, whether or not then vested or exercisable (each, an "Assumed Option"), " shall be assumed by Nanometrics Delaware. Each such Assumed Option shall continue to have, and be subject to, the same terms and conditions as are in effect immediately prior to the Acquisition Merger Effective Time, except that mean (i) such Assumed Option shall be exercisable for that number of whole shares of Nanometrics Delaware Common the Second Amended and Restated SEA Payroll Deduction Stock equal to the product (rounded down to the next whole number of shares of Nanometrics Delaware Common Stock) of the number of shares of Company Common Stock that were issuable upon exercise of such Assumed Option immediately prior to the Acquisition Merger Effective Time and the Exchange RatioPurchase Plan, and (ii) the per share exercise price for SEA Employee Stock Purchase Plan and (iii) the shares of Nanometrics Delaware Common Science & Engineering Associates, Inc. Vesting Stock issuable upon exercise of such Assumed Option Bonus Plan. Company Triggering Event. A "Company Triggering Event" shall be equal deemed to have occurred if: (i) the quotient (rounded up to the next whole cent) obtained by dividing the exercise price per share board of Company Common Stock at which such Assumed Option was exercisable immediately prior to the Acquisition Merger Effective Time by the Exchange Ratio. It is the intention of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If and to the extent necessary or required by the terms of any directors of the Company Stock Plans or any Company Stock Option, shall have failed to recommend that the Company shallshareholders vote to approve the principal terms of this Agreement and approve the Escrow Agreement and the Merger, prior or shall have withdrawn or modified in a manner adverse to Parent the Recommendations or shall otherwise have made a disclosure to the Acquisition Merger Effective TimeCompany shareholders or a public announcement that makes it reasonably apparent that the board of directors of the Company would so withdraw, (i) obtain modify or amend any consents from holders of Company Stock Options and its Recommendations; (ii) amend the terms of its equity incentive plans or arrangements, to give effect to the provisions of Section 7.9(b). The Company shall take no action, other than those actions contemplated by this Agreement, that will cause or result in the accelerated vesting of the Assumed Options. (d) Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under have failed to include the Company ESPP shall automatically be exercisedRecommendations in the S-4 Registration Statement or the Information Statement, in accordance with as applicable; (iii) the terms board of directors of the Company ESPPfails to reaffirm in writing the Recommendations, prior or fails to reaffirm in writing its determination that the Merger is in the best interests of the Company's shareholders, within five business days after Parent requests in writing that such recommendation or determination be reaffirmed; (iv) the board of directors of the Company shall have approved, endorsed or recommended any Acquisition Merger Effective TimeTransaction or shall have resolved or announced an intention to do so; (v) the Company shall have entered into any letter of intent or similar document or any Contract relating to any Acquisition Transaction; (vi) a tender or exchange offer relating to securities of the Company shall have been commenced and the Company shall have recommended such offer or shall not have sent to its securityholders, within ten (10) business days after the commencement of such tender or exchange offer, a statement disclosing that the Company recommends rejection of such tender or exchange offer it being understood that taking no position or indicating its inability to take a position does not constitute recommending a rejection of such tender or exchange offer, (vii) a proposal for an Acquisition Transaction is publicly announced, and the shares of Company Common Stock purchased (A) fails to issue a press release announcing its opposition to such Acquisition Proposal within five business days after such proposal is announced or (B) otherwise fails to actively oppose such proposal, or (viii) the Company breaches its obligations under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) 4.4 of this Agreement. Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP. (e) As soon as practicable following the Acquisition Merger Effective Time, but in any event within fifteen (15) business days thereafter (to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies of the relevant Company Stock Plans), Nanometrics Delaware shall prepare and file with the SEC a registration statement on Form S-8 covering the shares of Nanometrics Delaware Common Stock issuable pursuant to the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under such registration statement shares of Parent Common Stock held by those persons eligible immediately prior to the Closing Date pursuant to the 1995 Director Plan.

Company Stock Plans. (a) At The Company will take all actions necessary to provide that, upon the Acquisition Merger Effective Time, Nanometrics Delaware shall assume each outstanding option (each, an "Option") to purchase ------ Common Stock under the rights Company's Stock Option Plan (the "Option Plan"), whether ----------- or not then exercisable or vested, will either (i) become fully exercisable and obligations of the Company with respect to the Company Stock Plans as well as the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate the Company Stock Plansvested or (ii) expire and be extinguished. (b) At As soon as practicable after the Acquisition Merger Effective Timedate hereof, each the Company Stock will deliver to holders of Options appropriate notices setting forth such holders' rights pursuant to the Option that is outstanding Plan, the agreements evidencing the grants of such Options and this Agreement. Options which are exercisable immediately prior to the Acquisition Merger Effective Time will assumed by Reitco pursuant to and in accordance with Section 3.2(c). (c) At the Effective Time, whether or not then vested or the Company's obligations with respect to each Option which is exercisable immediately prior to the Effective Time that is set forth on Section 4.2 of the Company Disclosure Schedule will be assumed by Reitco (each, an "Assumed Option"), shall be assumed by Nanometrics Delaware. Each such The Assumed Option shall Options will continue to have, and be -------------- subject to, the same terms and conditions as are set forth in the Option Plan and related option agreements (as in effect immediately prior to the Acquisition Merger Effective Time) pursuant to which the Assumed Options were issued, except provided that (i) such all references to the Company will be deemed to be references to Reitco and Opco, and all references to the Common Stock will be deemed to be references to Paired Shares, (ii) each Assumed Option shall will be exercisable for that number of whole shares of Nanometrics Delaware Common Stock Paired Shares equal to the product (rounded down to the next whole number of shares of Nanometrics Delaware Common Stock) of the number of shares of Company the Common Stock that were issuable upon exercise of such covered by the Assumed Option immediately prior to the Acquisition Merger Effective Time and multiplied by the Exchange RatioRatio and rounded to the nearest whole number of Paired Shares, and (iiiii) the per share exercise price for the shares of Nanometrics Delaware Common Stock issuable upon exercise of such Assumed Option shall be equal to the quotient (rounded up to the next whole cent) obtained by dividing the exercise price per share of Company Paired Shares under each Assumed Option will be equal to the exercise price per share of the Common Stock at which such under the Assumed Option was exercisable immediately prior to the Acquisition Merger Effective Time divided by the Exchange Ratio. It is the intention of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, rounded to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If and nearest cent. Pursuant to the extent necessary or required by the terms of any of the Company Stock Plans or any Company Stock Option, the Company shall, prior to the Acquisition Merger Effective Time, (i) obtain any consents from holders of Company Stock Options and (ii) amend the terms of its equity incentive plans or arrangements, to give effect to the provisions of Section 7.9(b). The Company shall take no action, other than those actions contemplated by this Agreement, Reitco and Opco will (A) reserve for issuance or hold the number of Paired Shares that will cause or result in become issuable upon the accelerated vesting exercise of such Assumed Options pursuant to this Section 3.2(c) and (B) promptly after the Effective Time issue to each holder of an outstanding Assumed Option a document evidencing the assumption by Reitco of the Assumed Options. (d) Except as otherwise requested by Parent subject to the last sentence of Company's obligations with respect thereto under this Section (d3.2(c), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercised, in accordance with the terms of the Company ESPP, prior to the Acquisition Merger Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this Agreement. Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP. (e) As soon as practicable following the Acquisition Merger Effective Time, but in any event within fifteen (15) business days thereafter (to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies of the relevant Company Stock Plans), Nanometrics Delaware shall prepare and file with the SEC a registration statement on Form S-8 covering the shares of Nanometrics Delaware Common Stock issuable pursuant to the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under such registration statement shares of Parent Common Stock held by those persons eligible immediately prior to the Closing Date pursuant to the 1995 Director Plan.

Company Stock Plans. (a) At the Acquisition Merger Effective Time, Nanometrics Delaware shall assume the rights and obligations of the Company with respect to the Company Stock Plans as well as the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate the Company Stock Plans. (b) At the Acquisition Merger Effective Time, each Company Stock Option that is outstanding immediately prior to the Acquisition Merger Effective Time, whether or not then vested or exercisable (each, an "“Assumed Option"”), shall be assumed by Nanometrics Delaware. Each such Assumed Option shall continue to have, and be subject to, the same terms and conditions as are in effect immediately prior to the Acquisition Merger Effective Time, except that (i) such Assumed Option shall be exercisable for that number of whole shares of Nanometrics Delaware Common Stock equal to the product (rounded down to the next whole number of shares of Nanometrics Delaware Common Stock) of the number of shares of Company Common Stock that were issuable upon exercise of such Assumed Option immediately prior to the Acquisition Merger Effective Time and the Exchange Ratio, and (ii) the per share exercise price for the shares of Nanometrics Delaware Common Stock issuable upon exercise of such Assumed Option shall be equal to the quotient (rounded up to the next whole cent) obtained by dividing the exercise price per share of Company Common Stock at which such Assumed Option was exercisable immediately prior to the Acquisition Merger Effective Time by the Exchange Ratio. It is the intention of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If and to the extent necessary or required by the terms of any of the Company Stock Plans or any Company Stock Option, the Company shall, prior to the Acquisition Merger Effective Time, (i) obtain any consents from holders of Company Stock Options and (ii) amend the terms of its equity incentive plans or arrangements, to give effect to the provisions of Section 7.9(b). The Company shall take no action, other than those actions contemplated by this Agreement, that will cause or result in the accelerated vesting of the Assumed Options. (d) Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercised, in accordance with the terms of the Company ESPP, prior to the Acquisition Merger Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this Agreement. Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP. (e) As soon as practicable following the Acquisition Merger Effective Time, but in any event within fifteen (15) business days thereafter (to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies of the relevant Company Stock Plans), Nanometrics Delaware shall prepare and file with the SEC a registration statement on Form S-8 covering the shares of Nanometrics Delaware Common Stock issuable pursuant to the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under such registration statement shares of Parent Common Stock held by those persons eligible immediately prior to the Closing Date pursuant to the 1995 Director Plan.

Company Stock Plans. (a) At Not later than the Acquisition Merger Effective Time, Nanometrics Delaware shall assume the rights and obligations of the Company with respect to the Company Stock Plans as well as the duties of the Company with respect to the administration of such plans such that Nanometrics Delaware may operate the Company Stock Plans. (b) At the Acquisition Merger Effective Time, each Company Stock Option that which is outstanding immediately prior to the Acquisition Merger Effective Time, whether or not then vested or exercisable (each, Time pursuant to a Company Stock Option Plan shall become and represent an "Assumed Option"), shall be assumed by Nanometrics Delaware. Each such Assumed Option shall continue option to have, and be subject to, purchase the same terms and conditions as are in effect immediately prior to the Acquisition Merger Effective Time, except that (i) such Assumed Option shall be exercisable for that number of whole shares of Nanometrics Delaware Common Stock equal to the product (rounded down to the next whole number of shares of Nanometrics Delaware Parent Common StockStock (a "Substitute Option") of (decreased to the nearest full share) determined by multiplying (i) the number of shares of Company Common Stock that were issuable upon exercise of subject to such Assumed Company Stock Option immediately prior to the Acquisition Merger Effective Time and by (ii) the Exchange Ratio, and (ii) the at an exercise price per share exercise price for the shares of Nanometrics Delaware Parent Common Stock issuable upon exercise of such Assumed Option shall be equal to the quotient (rounded up to the next whole nearest cent) obtained by dividing equal to the exercise price per share of Company Common Stock at which such Assumed Option was exercisable immediately prior to the Acquisition Merger Effective Time divided by the Exchange Ratio. It is After the intention of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If , except as provided above in this Section 5.7, each Substitute Option shall be exercisable upon the same terms and to conditions as were applicable under the extent necessary or required by the terms of any of the related Company Stock Plans Option immediately prior to or at the Effective Time. The Company shall, if so requested by Parent, use reasonable best efforts to obtain any Company Stock Optionconsents that may be required in connection with implementing the provisions of this Section 5.7 (it being understood that, in connection with any such consents that may be so required, the Company shallwill have satisfied its obligation under this Agreement relating thereto if it has used reasonable best efforts to obtain such consents, prior to whether or not successful) or provide any notice or take any other similar action reasonably requested in connection therewith. As soon as reasonably practicable, and in no event later than ten days after the Acquisition Merger Effective Time, (i) obtain any consents from holders of Company Stock Options and (ii) amend the terms of its equity incentive plans or arrangements, to give effect to the provisions of Section 7.9(b). The Company Parent shall take no action, other than those actions contemplated by this Agreement, that will cause or result in the accelerated vesting of the Assumed Options. (d) Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercised, in accordance with the terms of the Company ESPP, prior to the Acquisition Merger Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this Agreement. Except as otherwise requested by Parent subject to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP. (e) As soon as practicable following the Acquisition Merger Effective Time, but in any event within fifteen (15) business days thereafter (to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies of the relevant Company Stock Plans), Nanometrics Delaware shall prepare and file with the SEC a registration statement on Form S-8 covering the shares of Nanometrics Delaware (or any successor or other appropriate form) with respect to Parent Common Stock issuable subject to such Substitute Options, or shall cause such Substitute Options to be deemed to be issued pursuant to the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and a Parent shall take such further actions as may be reasonably necessary to cover under such registration statement Stock Plan for which shares of Parent Common Stock held have been previously registered pursuant to an appropriate registration form. (b) As of the Effective Time, the right of each nonemployee director of the Company who has elected to receive shares of Company Common Stock pursuant to the deferred stock compensation program maintained by those persons eligible the Company shall become and represent a right to receive the number of shares of Parent Common Stock (decreased to the nearest whole share) determined by multiplying (i) the number of shares of Company Common Stock which would be issuable to such nonemployee director if he or she ceased serving as a director immediately prior to the Closing Date pursuant Effective Time by (ii) the Exchange Ratio. Such shares of Parent Common Stock shall be issued to such nonemployee director as soon as practicable after the 1995 Director PlanEffective Time.

Company Stock Plans. (a) At the Acquisition Merger Effective Time, Nanometrics Delaware each option to purchase shares of Common Stock outstanding under the Company's 1998 Non-Qualified Stock Option Plan and 1996 Stock Plan shall assume terminate and each holder thereof shall receive in exchange for such termination a cash payment equal, subject to Section 5.5(f) below, to the rights excess of (i) Merger Price times the number of shares of Common Stock subject to such option which are vested and obligations exercisable (including such number of shares that become vested and exercisable under the applicable option terms as a result of the Company with respect to transactions contemplated by this Agreement), over (b) the Company Stock Plans as well as the duties aggregate exercise price of such option. The fair market value of the Company with respect Common Stock on the Effective Time shall be deemed to equal the administration of such plans such that Nanometrics Delaware may operate the Company Stock PlansMerger Price. (b) At the Acquisition Merger Effective Time, each Company option to purchase shares of Common Stock outstanding under the Company's 1995 Employee Stock Option that is outstanding immediately prior Plan and 1995 Incentive Stock Option Plan (the "1995 Options") shall convert automatically into a right to receive upon exercise thereafter and subject to any continuing vesting provisions applicable to the Acquisition option the Merger Effective Time, whether or not then vested or exercisable (each, an "Assumed Option"), shall be assumed by Nanometrics Delaware. Each such Assumed Option shall continue to have, and be subject to, the same terms and conditions as are in effect immediately prior to the Acquisition Merger Effective Time, except that (i) such Assumed Option shall be exercisable for that number of whole shares of Nanometrics Delaware Common Stock equal to the product (rounded down to the next whole number of shares of Nanometrics Delaware Common Stock) of Price times the number of shares being exercised. No shares of Company Common Stock that were issuable shall be issued upon exercise of such Assumed Option immediately prior to the Acquisition Merger Effective Time and 1995 Options after the Exchange Ratio, and (ii) the per share exercise price for the shares of Nanometrics Delaware Common Stock issuable upon exercise of such Assumed Option shall be equal to the quotient (rounded up to the next whole cent) obtained by dividing the exercise price per share of Company Common Stock at which such Assumed Option was exercisable immediately prior to the Acquisition Merger Effective Time by the Exchange Ratio. It is the intention of the parties that each Assumed Option that qualified as an incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, to the maximum extent permissible, following the Acquisition Merger Effective Time. (c) If and to At the extent necessary or required by the terms of any of the Company Stock Plans or any Company Stock Option, the Company shall, prior to the Acquisition Merger Effective Time, each option outstanding under the Company's 1996 Employee Stock Purchase Plan (ithe "Purchase Plan") obtain any consents from holders shall terminate and the holder of Company Stock Options and (iieach such option shall receive in exchange therefor a cash payment equal, subject to Section 5.5(f) amend the terms of its equity incentive plans or arrangementsbelow, to give effect the excess of (a) the Merger Price times the number of shares of Common Stock that the holder's accumulated payroll deductions as of the Effective Time could purchase, at an option price determined with reference only to the provisions first business day of Section 7.9(bthe applicable Payment Period (as defined in the Purchase Plan) and subject to the limitations imposed by the Purchase Plan (including the limitation that no option with respect to a single Payment Period be exercised for more than 250 shares of Common Stock), over (b) the product of such number of shares times the option price. The Company shall take no action, other than those actions contemplated by this Agreement, that will cause or result in the accelerated vesting fair market value of the Assumed OptionsCommon Stock at the Effective Time shall be deemed to equal the Merger Price. (d) Except as otherwise requested by Parent subject Prior to the last sentence of this Section (d), prior to the Acquisition Merger Effective Time, the Company shall take all necessary and actions (including if appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP shall automatically be exercised, in accordance with amending the terms of the Company ESPP, prior Stock Option Plans and the Purchase Plan and obtaining the consent of holders of Stock Options or stock purchase rights) that are necessary to give effect to the Acquisition Merger Effective Time, and the shares of Company Common Stock purchased under those exercised rights shall at the Acquisition Merger Effective Time be cancelled and converted into the right to receive shares of Nanometrics Delaware Common Stock pursuant to Section 2.6(a) of this Agreement. Except as otherwise requested transactions contemplated by Parent subject to the last sentence of this Section (dSections 5.5(a), prior to the Acquisition Merger Effective Time, the Company shall take all necessary (b) and appropriate actions so that the Company ESPP shall terminate immediately prior to the Acquisition Merger Effective Time, and no further purchase rights shall be granted under the Company ESPP. Prior to the Acquisition Merger Effective Time, the Company shall take all necessary and appropriate actions requested by Parent so that all outstanding purchase rights under the Company ESPP and the Company ESPP itself shall be treated in the manner requested by Parent as long as such actions may be taken pursuant to the Company ESPP(c). (e) As soon as practicable following The Company shall take all steps required to terminate the Acquisition Merger Company Stock Option Plans and the Purchase Plan immediately after the Effective Time. (f) Payments pursuant to Sections 5.5(a), but in (b) and (c) above shall be subject to any event within fifteen (15) business days thereafter (applicable tax withholding required under the Code, the rules and regulations thereunder or any provision of state, local or foreign tax law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the extent Parent or Nanometrics Delaware, as appropriate, have received the most recent copies holder of the relevant Company Stock Plans), Nanometrics Delaware shall prepare and file with the SEC a registration statement on Form S-8 covering the shares of Nanometrics Delaware Common Stock issuable pursuant to the outstanding Assumed Options, Nanometrics Delaware shall cause the same to become effective, and Parent shall take such further actions as may be reasonably necessary to cover under such registration statement shares of Parent Common Stock held by those persons eligible immediately prior to the Closing Date pursuant to the 1995 Director PlanOptions and/or stock purchase rights.