Common use of Stock Options and Employee Benefits Clause in Contracts

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a "Company Stock Option"), whether or not exercisable, whether or not vested, shall by virtue of the Merger be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the Code. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. It is the intention of the parties that each Company Stock Option assumed by Parent shall qualify following the Effective Time as an incentive stock option as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such option qualified as an incentive stock option prior to the Effective Time.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock (each a "COMPANY STOCK OPTION") under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a "Company Stock Option")Option Plans, whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable Company Stock Option Plan immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the . (b) It is intended that Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. It is the intention of the parties that each Company Stock Option assumed by Parent shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such option Company Stock Options qualified as an incentive stock option options immediately prior to the Effective TimeTime and the provisions of this Section 5.8 shall be applied consistent with such intent. (c) Rights outstanding under the ESPP shall be treated in a manner reasonably acceptable to Parent and Company, provided that in no event shall any such treatment interfere with Parent's ability to account for the Merger as a pooling of interests. (d) Parent will reserve sufficient shares of Parent Common Stock for issuance under Section 5.8 and under Section 1.6(c) hereof.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Fractal Common Stock (each a "FRACTAL STOCK OPTION") under the Company's Nonemployee Director Plan and the 1982 Fractal Stock Option Plan (each, a "Company Stock Option")Plans, whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeMetaTools. Each Company Fractal Stock Option so assumed by Parent MetaTools under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable Fractal Stock Option Plan immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisionsrights), except that (i) each Company Fractal Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent MetaTools Common Stock equal to the product of the number of shares of Company Fractal Common Stock that were issuable upon exercise of such Company Fractal Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent MetaTools Common Stock Stock, and (ii) the per share exercise price for the shares of Parent MetaTools Common Stock issuable upon exercise of such assumed Company Fractal Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Fractal Common Stock at which such Company Fractal Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after After the Effective Time, upon exercise of the Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, MetaTools will issue to each holder of an outstanding Company Fractal Stock Option a document evidencing notice describing the foregoing assumption of such Fractal Stock Option by Parent. MetaTools. (b) It is the intention of the parties intended that each Company Fractal Stock Option Options assumed by Parent MetaTools shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such option Fractal Stock Options qualified as an incentive stock option options immediately prior to the Effective TimeTime and the provisions of this Section 5.10 shall be applied consistent with such intent. (c) MetaTools will reserve sufficient shares of MetaTools Common Stock for issuance under Section 5.10(a) and under Section 1.6(c) hereof.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a "Company Stock Option"), whether or not exercisable, whether or not vested, shall by virtue exercisable and regardless of the Merger respective exercise prices thereof, will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable Company Option and Company Stock Option Plan immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. . (b) It is the intention of the parties intended that each Company Stock Option Options assumed by Parent shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such option Company Options qualified as an incentive stock option options immediately prior to the Effective Time and the provisions of this Section 5.8 shall be applied consistent with such intent. (c) Outstanding rights to purchase shares of Company Common Stock shall be exercised in accordance with the Company Purchase Plan, and each share of Company Common Stock purchased or to be purchased pursuant to such exercise shall by virtue of the Merger, and without any action on the part of the holder thereof, be converted into the right to receive a number of shares of Parent Common Stock equal to the Exchange Ratio, without issuance of certificates representing issued and outstanding shares of Company Common Stock to participants under the Company Purchase Plan. The rights of participants in the Company Purchase Plan with respect to any offering then underway under the Company Purchase Plan shall be determined by treating the last business day prior to the Effective Time as the last day of such offering and by making such other pro rata adjustments as may be necessary to reflect the shortened offering but otherwise treating such shortened offering as a fully effective and completed offering for all purposes under the Company Purchase Plan. As of the Effective Time, the Company Purchase Plan shall be terminated. Employees of the Company who become employees of Parent shall be eligible to participate in the employee stock purchase plan of Parent (the "Parent ESPP") (subject to such plan's terms and conditions) at the next regularly scheduled offering period under the Parent ESPP. (d) Effective as of the day immediately preceding the Closing Date, the Company and its Affiliates, as applicable, shall each terminate any and all plans intended to include a Code Section 401(k) arrangement (unless Parent provides written notice to the Company that such 401(k) -40- plan(s) shall not be terminated). Unless Parent provides such written notice to the Company, no later than five (5) business days prior to the Closing Date, the Company shall provide Parent with evidence that such 401(k) plan(s) have been terminated (effective as of the day immediately preceding the Closing Date) pursuant to resolutions of the Board of Directors of the Company. The form and substance of such resolutions shall be subject to review and approval of Parent. The Company also shall take such other actions in furtherance of terminating such 401(k) plan(s) as Parent may reasonably request.

Stock Options and Employee Benefits. (a) 1. At the Effective Time, each outstanding option to purchase shares of the Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, each a "Company Stock Option")) under the Company Stock Option Plans, whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable Company Stock Option Plan and option certificate immediately prior to the Effective Time (including, without limitation, any existing repurchase rights or vesting provisionsprovisions other than any provision providing for accelerated vesting in connection with the Merger, which provisions shall not apply with respect to the Merger), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal as the holder would have been entitled to receive pursuant to the product of Merger had such holder exercised such option in full immediately prior to the number of Effective Time, without taking into account whether or not such option is in fact then exercisable and all shares of Company Common Stock that were issuable upon the exercise of such Company option were converted into Parent Common Stock Option immediately prior pursuant to the Effective Time multiplied by the Exchange RatioSection 1.6, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Rationumber of shares of Parent Common Stock deemed purchasable, in accordance with the terms of this Section, pursuant to such Company Common Stock Option, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Company Stock Options in accordance with the terms thereof, make available shall take all corporate action necessary to reserve for issuance all a sufficient number of shares of Parent Common Stock covered thereby and shall, as promptly for delivery upon exercise of options assumed by Parent pursuant to this Section. As soon as practicable after the Effective Time, issue Parent shall deliver to each holder of an outstanding a Company Stock Option a document evidencing the foregoing assumption by Parentan appropriate notice setting forth such holder's rights pursuant thereto. 2. It is intended that the intention of the parties that each Company Stock Option Options assumed by Parent shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such option Company Stock Options qualified as an incentive stock option options immediately prior to the Effective TimeTime and the provisions of this Section 5.20 shall be applied consistent with such intent. 3. Parent agrees to file a registration statement on Form S-8 for the shares of Parent Common Stock issuable with respect to assumed Company Stock Options within 10 business days after the Effective Time and shall use its reasonable efforts to maintain the effectiveness of such registration statement thereafter for so long as any of such options or other rights remain outstanding.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Maxis Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, each a "Company Maxis Stock Option")) under the Maxis Stock Option Plans, whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeElectronic Arts. Each Company Maxis Stock Option so assumed by Parent Electronic Arts under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable Maxis Stock Option Plan immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions)and the Stock Option Agreement by which it is evidenced, except that (i) each Company Maxis Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares (and no fractional shares) of Parent Electronic Arts Common Stock equal to the product of the number of shares of Company Maxis Common Stock that were issuable upon exercise of such Company Maxis Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Electronic Arts Common Stock Stock, and (ii) the per share exercise price for the shares of Parent Electronic Arts Common Stock issuable upon exercise of such assumed Company Maxis Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Maxis Common Stock at which such Company Maxis Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, As soon as promptly as reasonably practicable after the Effective Time, Electronic Arts will issue to each holder of an outstanding Company Maxis Stock Option a document evidencing notice describing the foregoing assumption by Parent. It is the intention of the parties that each Company such Maxis Stock Option by Electronic Arts. (b) The parties intend that Maxis Stock Options assumed by Parent Electronic Arts shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such option Maxis Stock Options qualified as an incentive stock option options immediately prior to the Effective Time. (c) Prior to the Effective Time, Maxis shall take such actions as are necessary to establish a "new exercise date" (as such term is used in the ESPP) in accordance with the terms of the ESPP (the "New Exercise Date") for the then current offering periods (as such term is used in the ESPP). The New Exercise Date shall be the last trading day on which shares of Maxis' Common Stock are traded on the Nasdaq National Market immediately prior to the Effective Time; provided, however, that the New Exercise Date shall be conditioned upon consummation of the Merger. On the New Exercise Date, Maxis shall apply the funds credited as of such date under the ESPP within each participant's payroll withholdings account to the purchase of whole shares of Maxis Common Stock in accordance with the ESPP. (d) Electronic Arts will reserve sufficient shares of Electronic Arts Common Stock for issuance under Section 5.10(a) and under Section 1.6(c) hereof. 5.11

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a "Company Stock Option") under the Company Option Plans and each Employee Option (as defined in Section 5.8(c)), whether vested or not exercisable, whether or not vestedunvested, shall by virtue of the Merger be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Option and Employee Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options Company Stock Option or Employee Option immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisionsprovisions and provisions regarding acceleration of vesting upon certain transactions other than those contemplated by this Agreement), except that (i) each Company Stock Option and Employee Option will be exercisable (or will become exercisable in accordance with its terms) terms for that number of whole shares of Parent Common Stock equal to the product (rounded to the nearest whole number of shares of Parent Common Stock unless required to be rounded down pursuant to subsection (b) below) of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option or Employee Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock Applicable Fraction and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option or Employee Option will be equal to the quotient (rounded to the nearest whole cent unless required to be rounded up to the nearest whole cent pursuant to subsection (b) below) determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option or Employee Option was exercisable immediately prior to the Effective Time by the Exchange RatioCommon Stock Applicable Fraction. Following the Closing, rounded up Parent will send to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise each holder of the an assumed Company Stock Options in accordance with Option or Employee Option a written notice setting forth (i) the terms thereof, make available for issuance all number of shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue subject to each holder of an outstanding such assumed Company Stock Option a document evidencing or Employee Option, and (ii) the foregoing assumption by Parent. exercise price per share of Parent Common Stock issuable upon exercise of such assumed Company Stock Option or Employee Option. (b) It is the intention of the parties (1) that each subject to applicable law, the Company Stock Option Options assumed by Parent shall qualify qualify, following the Effective Time Time, as an incentive stock option options, as defined in Section 422 of the Code Code, to the extent permitted under Section 422 of that the Code and to the extent such option Company Stock Options qualified as an incentive stock option options prior to the Effective Time, (2) that each holder of a Company Stock Option shall, after the Effective Time, have an option which preserves (but does not increase) the excess of the fair market value of the shares subject to the option immediately before the Effective Time over the aggregate option price of such shares immediately before the Effective Time, (3) that the terms, conditions, restrictions and provisions of the resulting option be identical to the terms, conditions, restrictions and provisions of the Company Stock Option which was assumed as if Parent had originally issued such Company Stock Option for Parent Common Stock, and (4) any terms, conditions, restrictions or provisions of an option applicable to a number of shares rather than a percentage or fraction of shares should be appropriately adjusted. (c) Notwithstanding anything else in this Agreement, prior to the Closing, Company may issue options to the senior employees of Company listed on Section 5.8 of the Company Schedule with respect to 1,848,495 shares of Company Common Stock (the "Employee Options"). The Employee Options will have an exercise price of $0.05 per share of Company Common Stock and will be subject to the terms set forth in Section 5.8 of the Company Schedule. Any shares of Parent Common Stock subject to an Employee Option but not issued because the Employee Option is not exercised or is not exercisable as a result of the terms thereof shall be deposited by Parent as soon as practicable in the Escrow Account and shall be deemed to be Holdback Shares. Company may, at its option, issue restricted stock in place of the Employee Options with terms substantially the same as the Employee Options. (d) Prior to the Closing, the parties will negotiate in good faith to agree on a plan to provide to the senior employees of Company listed on Section 5.8 of the Company Schedule a pool of 15,067 shares of Parent Common Stock, or its equivalent in value, to be distributed to such employees subject to the terms and conditions set forth in Section 5.8 of the Company Schedule; provided, however, that Parent shall not be obligated to agree to any such plan that has an adverse financial or accounting impact on Parent. If the parties are unable to agree on such a plan, the 15,067 shares of Parent Common Stock will be paid to the shareholders of Company at the Closing, and the Applicable Fractions will be revised accordingly.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a "Company Stock Option")) under the Company Option Plans, whether as vested or not exercisable, whether or not vestedunvested, shall by virtue of the Merger be assumed by Parent in such manner that (1) Parent (i) is a corporation "issuing or assuming a stock option in a transaction to which Section 424(a) appliedapplies" within the meaning of Section 424 of the Code, or (ii2) Parent, to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be such a transaction within corporation were Section 424 of the CodeCode applicable to such Company options. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisionsprovisions and provisions regarding acceleration of vesting upon certain transactions other than those contemplated by this Agreement), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) terms for that number of whole shares of Parent Common Stock equal to the product (rounded to the nearest whole number of shares of Parent Common Stock subject to subsection (c) below) of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient (rounded to the nearest whole cent subject to subsection (c) below) determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up . (b) Prior to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Company Stock Options outstanding purchase rights under Company's ESPP shall be exercised in accordance with Section 7.1 of the terms ESPP and each share of Company Common Stock purchased pursuant to such exercise shall by virtue of the Merger, and without any action on the part of the holder thereof, make available for issuance all be converted into the right to receive a number of shares of Parent Common Stock covered thereby equal to the Exchange Ratio without issuance of certificates representing issued and shall, as promptly as practicable after the Effective Time, issue outstanding shares of Company Common Stock to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. ESPP participants. (c) It is the intention of the parties (1) that each subject to applicable law, the Company Stock Option Options assumed by Parent shall qualify qualify, following the Effective Time Time, as an incentive stock option options, as defined in Section 422 of the Code Code, to the extent permitted under Section 422 that the Company Stock Options qualified as incentive stock options prior to the Effective Time, (2) that each holder of a Company Option shall, after the Effective Time, have an option which preserves (but does not increase) the excess of the Code and fair market value of the shares subject to the option immediately before the Effective Time over the aggregate option price of such shares immediately before the Effective Time, (3) that the terms and conditions, restrictions and provisions of the resulting option be identical to the terms, conditions, restrictions or provisions of the Company Stock Option which was assumed as if the Parent had originally issued such Company Stock Option for Parent Common Stock, and (4) any terms, conditions, restrictions or provisions of an option applicable to a number of shares rather than a percentage or fraction of shares should be appropriately adjusted based upon the Exchange Ratio. (d) To the extent permitted by Parent's employee benefit plan and applicable law, Parent will use reasonable efforts, or will cause Company to use reasonable efforts, give individuals who are employed by Company and its subsidiaries as of the Effective Time ("Affected Employees") full credit for purposes of eligibility, vesting, benefit accrual (excluding, however, benefit accrual under any defined benefit pension plans) and determination of the level of benefits under any employee benefit plans or arrangements maintained by Parent or any subsidiary of Parent for such option qualified as an incentive stock option Affected Employees' service with Company or any subsidiary of the Company to the same extent recognized by Company immediately prior to the Effective Time. (e) To the extent permitted by Parent's employee benefit plans and applicable law, Parent will, or will cause Company to (i) waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Affected Employees under any welfare benefit plans that such employees may be eligible to participate in after the Effective Time, other than limitations or waiting periods that are already in effect with respect to such employees and that have not been satisfied as of the Effective Time under any welfare plan maintained for the Affected Employees immediately prior to the Effective Time, and (ii) provide each Affected Employee with credit for any co-payments and deductibles paid prior to the Effective Time in satisfying any applicable deductible or out-of-pocket requirements under any welfare plans that such employees are eligible to participate in after the Effective Time. (f) As of the Effective Time, Parent shall assume and honor and shall cause Company to honor in accordance with their terms all employment, severance and other compensation agreements and arrangements existing and disclosed by Company to Parent prior to the execution of this Agreement which are between Company or any subsidiary and any director, officer, or employee thereof except as otherwise expressly agreed between Parent and such person.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a "Company Stock Option"), whether or not exercisable, whether or not vested, shall by virtue exercisable and regardless of the Merger respective exercise prices thereof, will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable Company Stock Option Plan immediately prior to the Effective Time (including, without limitation, any repurchase rights or rights, vesting provisionsprovisions and vested status of any such Company Option), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. . (b) It is the intention of the parties intended that each Company Stock Option Options assumed by Parent shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted extent (c) Rights outstanding under Section 422 the Company Purchase Plan shall be treated in a manner reasonably acceptable to Parent and the Company, provided that in no event shall any such treatment interfere with Parent's ability to account for the Merger as a pooling of interests. (d) At the Code Effective Time, the Warrants will be assumed by Parent. Each Warrant so assumed by Parent under this Agreement will continue to have, and to be subject to, the extent such option qualified as an incentive stock option same terms and conditions set forth in the applicable warrant agreement immediately prior to the Effective TimeTime (including, without limitation, any repurchase rights or vesting provisions), except that (i) each Warrant will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Warrant immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Warrant will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Warrant was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock (each a "COMPANY STOCK OPTION") under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a "Company Stock Option")Option Plans, whether or not exercisable, whether or not vestedwill be assumed by Parent. Immediately following the Effective Time, each Person who is a holder of a Company Stock Option assumed by Parent hereunder, other than those executive officers of the Company specifically identified on Schedule 5.8, shall have the vesting with respect to fifty percent (50%) of his/her unvested options immediately accelerated (the "ACCELERATED PORTION"); provided, however, that, in consideration of such vesting acceleration, each such Company Stock Option holder shall agree that the balance of his/her unvested Company Stock Options which are assumed by virtue Parent hereunder and which are not accelerated pursuant to this Section 5.8(a) shall continue to vest at the same percentage vesting rate set forth in such holder's original Company Stock Option agreement (unless the change of control provisions, if any, contained in such holder's original Company Stock Option agreement specifically provide otherwise). Except as set forth in the preceding sentence or on Schedule 5.8, no outstanding Company Stock Option will have been accelerated or have the right to be accelerated as a result of the Merger and there shall be assumed by Parent in such manner that Parent (i) is "assuming no other agreements at the Effective Time providing for change-in-control, option acceleration or other benefits as a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 result of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeMerger. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable Company Stock Option Plans immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the . (b) It is intended that Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. It is the intention of the parties that each Company Stock Option assumed by Parent shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such option Company Stock Options qualified as an incentive stock option options immediately prior to the Effective Time and the provisions of this Section 5.8 shall be applied consistent with such intent. (c) Parent intends to maintain or cause Company to maintain employee benefit plans (as defined in Section 3(3) of ERISA) for the benefit of employees of Company which are substantially similar to those benefits provided for Parent's employees, including, without limitation, any of the following benefit plans maintained by Parent: medical/dental/vision care, life insurance, disability income, sick pay, holiday and vacation pay, 401(k) plan coverage, Section 125 benefit arrangements, bonus profit-sharing or other incentive plans, pension or retirement programs, dependent care assistance, severance benefits, and employee stock option and stock purchase plans, to the extent Company employees meet the eligibility requirements for each such plan or program. Parent intends that Company's employees shall be given credit, for purposes of any service requirements for participation, for their period of service with Company and Odetics, Inc. prior to the Closing Date, and Company employees shall also, with respect to any Parent plans or programs which have co-payment, deductible or other co-insurance features, receive credit for any amounts such employees have paid to date in 1998 in co-payments, deductibles or co-insurance under comparable programs maintained by Company prior to the date hereof. In addition, Parent intends that, to the maximum extent allowable under the Company's medical/health plans, no Company employee who participates in any medical/health plan of Company at the Closing Date shall be denied coverage under Parent's medical/health plan by reason of any pre-existing condition exclusions. (d) Within twenty (20) business days following the Effective Time, Parent shall issue to each person who is a holder of a Company Stock Option assumed by Parent hereunder a document, in form and substance reasonably satisfactory to Company, evidencing such assumption. Pursuant to such document, the agreements evidencing such assumed Company Stock Option shall be deemed to be appropriately amended and adjusted so that such assumed Company Stock Option shall represent the right to acquire Parent Common Stock on the same terms and conditions as contained in the agreements evidencing such Company Stock Option (subject to the adjustments required by this Section 5.8 to effect the assumption by Parent as set forth above).

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company CKS Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, each a "Company CKS Stock Option")) under the CKS Stock Plans, whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeUSWeb. Each Company CKS Stock Option so assumed by Parent USWeb under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable CKS Stock Plan immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisionsrights), except that (i) each Company CKS Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and 34 (iib) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. It is the intention intent of the parties that each Company the CKS Stock Option Options assumed by Parent USWeb shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted CKS Stock Options qualified as incentive stock options immediately prior to the Effective Time. It is also the intent of the parties that the ESPP Options shall qualify, following the Effective Time as options granted under an employee stock purchase plan as defined in Section 422 423 of the Code and to the extent such option the ESPP Options qualified as an incentive stock option such immediately prior to the Effective Time. (c) USWeb will reserve sufficient shares of USWeb Common Stock for issuance under Section 5.11(a) and under Section 1.6(c) hereof. (d) USWeb will, or will cause CKS or the appropriate subsidiary of CKS to give individuals who are employed by CKS or any of its subsidiaries as of the Effective Time and who remain employees of CKS or such subsidiary following the Effective Time (each such employee, an "Affected Employee") full credit to the extent each such Affected Employee has been credited with service under each comparable employee benefit plan or arrangement maintained by CKS immediately prior to the Effective Time for purposes of eligibility, vesting, benefit, accrual and determination of the level of benefits under each employee benefit plan or arrangement maintained by USWeb, CKS or any such subsidiary for such Affected Employees' service with CKS or any affiliate thereof. (e) USWeb will make commercially reasonable best efforts to, or will cause CKS or the appropriate subsidiary of CKS to (i) waive all limitations as to pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Affected Employees under any welfare benefit plans that such Affected Employees may be eligible to participate in after the Effective Time, other than limitations or waiting periods that are already in effect with respect to such Affected Employees and that have not been satisfied as of the Effective Time under any welfare plan maintained for the Affected Employees immediately prior to the Effective Time, and (ii) provide each Affected Employee with credit for the remaining short plan year for any co-payments and deductibles paid under each comparable welfare plan maintained by CKS prior to the Effective Time in satisfying any applicable deductible or co-payment requirements under any welfare plans that such Affected Employees are eligible to participate in after the Effective Time. 35 (f) As of the Effective Time, USWeb shall expressly assume and agree to perform in accordance with their terms, all employment, stay-put and other compensation agreements then existing between CKS or any subsidiary with any director, officer or employee thereof, provided such agreements are described in the CKS Schedules. (g) USWeb shall make its commercially reasonable best efforts to adopt, maintain and sponsor for the Affected Employees each employee welfare benefit plan, as defined in Section 3(1) of ERISA, (excluding any reimbursement policies, arrangements or programs and any severance plans) that are maintained and sponsored by CKS as of the Effective Time, that are set forth on the CKS Schedule under a reference to Section 2.13 of this Agreement (the "CKS Benefits Plans"), for one (1) year following the date of this Agreement (the "Benefit Period"); provided, however, that (i) such plans have been established and maintained in substantial compliance with all applicable laws, rules and regulations, up to and including the Effective Time, (ii) that the costs of such plans are not substantially in excess of their historical costs (as adjusted for price increases reasonably in line with price increases affecting such products generally), and (iii) the insurance carriers of the CKS Benefits Plans permit USWeb to adopt, maintain and sponsor such plans. In the event that the insurance carriers of the CKS Benefits Plans do not permit USWeb to adopt such plans, or to extend such plans (and related contracts) for the Affected Employees for the outstanding portion of the Benefit Period which extends beyond the current plan (contract) year on substantially similar terms as currently in effect, then USWeb shall not be obligated to maintain such plans beyond the current plan (contract) year, but shall use commercially reasonable best efforts to offer a comparable plan (or as reasonably close to comparable as possible while remaining in line with historical costs). (h) Subject to the foregoing, from and after the Effective Time, the Affected Employees shall be eligible to participate in USWeb's employee benefit plans and arrangements in which similarly situated employees of USWeb or affiliates of USWeb participate, to the same extent as such similarly situated employees of USWeb or affiliates of USWeb. (i) CKS hereby agrees to terminate any and all CKS Employee Plans subject to Section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code") as well as any and all severance or separation pay, policy, plan or arrangement prior to the Effective Time.

Stock Options and Employee Benefits. (a) At the Effective Time, each then outstanding option to purchase shares of Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a "Company Stock Option"), whether or not exercisable, whether or not vested, shall by virtue exercisable at the Effective Time and regardless of the Merger respective exercise prices thereof, will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of set forth in the applicable Company Stock Option Plan (and any applicable stock option agreement for such options Company Option) immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by 0.425 (the Exchange Ratio"EXCHANGE RATIO"), rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up down to the nearest whole cent. Parent shall, from and after Each assumed Company Option shall be vested immediately following the Effective Time, upon exercise Time as to the same percentage of the Company Stock Options in accordance with the terms thereof, make available for issuance all total number of shares subject thereto as it was vested as of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective TimeTime (taking into consideration the effect of the Merger on the vesting of such assumed Company Options); provided however, issue that the Company shall take all best efforts so that no Company Option shall vest in excess of 50% of the unvested portion immediately prior to each holder the Effective Time as a result of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. Merger. (b) It is the intention of the parties intended that each Company Stock Option Options assumed by Parent shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Company Options qualified as incentive stock options immediately prior to the Effective Time and the provisions of this Section 422 5.9 shall be applied consistent with such intent. (c) It is intended that prior to Closing, the Company shall place into escrow with an escrow agent and form of escrow agreement reasonably acceptable to Parent shares of Company Common Stock (the "ESCROW SHARES") which would have been issued by the Company in connection with its prior acquisitions as set forth on Part 4.1 of the Code Company Schedules. Upon Closing, such Escrow Shares shall be converted into shares of Parent Common Stock in accordance with the terms of this Agreement and be released from escrow in accordance with the terms of the respective acquisition agreements. (d) Prior to the Effective Time, the Company shall grant stock options pursuant to the Company 1999 Stock Option Plan to purchase an aggregate of 1,200,000 shares (as appropriately adjusted for stock splits and the like) of Company Common Stock to such persons and in such amounts as to which Parent shall have agreed, with strike prices equal to the fair market value of the Company Common Stock at the time of grant, with no acceleration of vesting triggered by this Merger, with 25% of the option vested 12 months from the date of grant and 1/48th per month thereafter. These options shall only be granted to employees of the Company and in such individual amounts as set forth on a written schedule approved in writing by Parent prior to the granting of such options ("OPTION SCHEDULE"); provided, however that no New Options shall be included on the Option Schedule. The Company shall provide the Option Schedule to Parent no later than ten (10) calendar days from the date hereof. (e) For purposes of determining eligibility to participate, vesting, and accrual or entitlement to benefits where length of service is relevant under any employee benefit plan or arrangement of Parent, the Surviving Corporation, or any of their respective subsidiaries or affiliates, the employees, officers, directors, and consultants of the Company as of the Effective Time ("AFFECTED EMPLOYEES") shall receive service credit for service with the Company (and any predecessors thereto) to the same extent that such option qualified as an incentive stock option service credit was granted under the Company Employee Plans, subject to no duplication of benefits; provided, however, that this paragraph shall not apply to any of Parent's equity benefit plans. (f) Parent shall assume and honor, or shall cause the Surviving Corporation to assume and honor, in accordance with their terms, all written employment, retention, consulting, bonus, severance and termination plans and agreements (including change in control provisions) of Affected Employees provided or made available to Parent on or prior to the Effective Time.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company VFI Common Stock (each a "VFI STOCK OPTION") under the Company's Nonemployee Director Plan and the 1982 VFI Stock Option Plan (each, a "Company Stock Option")Plans, whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeHP. Each Company VFI Stock Option so assumed by Parent HP under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable VFI Stock Option Plan immediately prior to the Effective Time and the stock option agreement (including, without limitation, any repurchase rights or vesting provisions)rights) by which it is evidenced, except that (i) each Company VFI Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares (and no fractional shares) of Parent HP Common Stock equal to the product of the number of shares of Company VFI Common Stock that were issuable upon exercise of such Company VFI Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent HP Common Stock and (ii) the per share exercise price for the shares of Parent HP Common Stock issuable upon exercise of such assumed Company VFI Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company VFI Common Stock at which such Company VFI Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, As soon as promptly as reasonably practicable after the Effective Time, HP will issue to each holder of an outstanding Company VFI Stock Option a document evidencing notice describing the foregoing assumption of such VFI Stock Option by Parent. HP. (b) It is the intention of the parties intended that each Company VFI Stock Option Options assumed by Parent HP shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted VFI Stock Options qualified as incentive stock options immediately prior to the Effective Time and the provisions of this Section 5.10 shall be applied consistent with such intent. (c) At the Effective Time, each phantom stock option grant ("VFI PHANTOM STOCK GRANT") under Section 422 the VFI Phantom Stock Plans, whether or not exercisable, will be assumed by HP. Each VFI Phantom Stock Grant so assumed by HP under this Agreement will continue to have, and be subject to, the same terms and conditions set forth in the applicable VFI Phantom Stock Plan immediately prior to the Effective Time and the phantom stock agreement by which it is evidenced, except that (i) the number of shares of stock subject to the VFI Phantom Stock Grant shall equal the number of whole shares (and no fractional shares) of HP Common Stock equal to the product of the Code and number of shares of VFI Common Stock that were subject to such VFI Phantom Stock Grant immediately prior to the extent Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of HP Common Stock and (ii) the redemption value per share after the Effective Time shall be calculated based on the fair market value of a share of HP Common Stock. As soon as reasonably practicable after the Effective Time, HP will issue to each holder of an outstanding VFI Phantom Stock Grant a notice describing the foregoing assumption of such option qualified VFI Phantom Stock Grant by HP. (d) At the Effective Time, each outstanding purchase right (an "Assumed Purchase Right") under the ESPP shall be deemed to constitute a purchase right to acquire, on the same terms and conditions as an incentive stock option were applicable under the ESPP immediately prior to the Effective Time, a number of shares of HP Common Stock determined as provided in the ESPP except that the purchase price of such shares of HP Common Stock under each Assumed Purchase Right shall be the lower of (i) the quotient determined by dividing eighty-five percent (85%) of the fair market value of the VFI Common Stock on the offering date of each assumed offering by the Exchange Ratio or (ii) eighty-five percent (85%) of the fair market value of the HP Common Stock on each exercise date of the assumed offering occurring after the Effective Time. As soon as practicable after the Effective Time, HP shall deliver to the participants in the ESPP appropriate notice setting forth such participants' rights pursuant thereto and that the purchase rights pursuant to the ESPP shall continue in effect on the same terms and conditions. (e) At the Effective Time, each outstanding right to receive cash (an "Assumed Cash Right") under the VFI Stock Bonus Plans shall be deemed to constitute a right to receive cash, on the same terms and conditions as were applicable under the VFI Stock Bonus Plans immediately prior to the Effective Time, except that the calculation of the right to receive cash shall be made using (i) as the beginning price the quotient determined by dividing eighty-five percent (85%) of the fair market value of the VFI Common Stock on the offering date of the assumed offering by the Exchange Ratio and (ii) as the ending price eighty-five percent (85%) of the fair market value of the HP Common Stock on each exercise date of the assumed offering occurring after the Effective Time. As soon as practicable after the Effective Time, HP shall deliver to the participants in the VFI Stock Bonus Plans appropriate notice setting forth such participants' rights pursuant thereto and that the rights to receive cash payments pursuant to the VFI Stock Bonus Plans shall continue in effect on the same terms and conditions. (f) HP shall assume all Restricted Stock Purchase Agreements and VFI shall assign its repurchase rights under such Restricted Stock Purchase Agreements to HP pursuant to Section 4(d) of the Restricted Stock Purchase Agreements. The Restricted Stock Purchase Agreements so assumed by HP under this Agreement will continue to have, and be subject to, the same terms and conditions set forth in the applicable Restricted Stock Purchase Agreement by which it is evidenced (including, without limitation, any repurchase rights) immediately prior to the Effective Time, except that (i) the Restricted Stock Purchase Agreement will be for that number of whole shares (and no fractional shares) of HP Common Stock equal to the product of the number of shares of VFI Common Stock that have not vested immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of HP Common Stock and (ii) the per share repurchase price for the unvested shares of HP Common Stock subject to the repurchase right will be equal to the quotient determined by dividing the purchase price per share of VFI Common Stock at which such VFI Common Stock was purchased under the Restricted Stock Purchase Agreement by the Exchange Ratio, rounded down to the nearest whole cent. As soon as reasonably practicable after the Effective Time, HP will issue to the holder of the Restricted Stock Purchase Agreement a notice describing the foregoing assumption of such Restricted Stock Purchase Agreements by HP. (g) HP will reserve sufficient shares of HP Common Stock for issuance under Section 5.10 and under Section 1.6(c) hereof.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of the Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, each a "Company Stock Option")) under the Company Stock Option Plans, whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable Company Stock Option Plan and option certificate immediately prior to the Effective Time (including, without limitation, any existing repurchase rights or vesting provisionsprovisions other than any provision providing for accelerated vesting in connection with the Merger, which provisions shall not apply with respect to the Merger), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal as the holder would have been entitled to receive pursuant to the product of Merger had such holder exercised such option in full immediately prior to the number of Effective Time, without taking into account whether or not such option is in fact then exercisable and all shares of Company Common Stock that were issuable upon the exercise of such Company option were converted into Parent Common Stock Option immediately prior pursuant to the Effective Time multiplied by the Exchange RatioSection 1.6, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Rationumber of shares of Parent Common Stock deemed purchasable, in accordance with the terms of this Section, pursuant to such Company Common Stock Option, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Company Stock Options in accordance with the terms thereof, make available shall take all corporate action necessary to reserve for issuance all a sufficient number of shares of Parent Common Stock covered thereby and shall, as promptly for delivery upon exercise of options assumed by Parent pursuant to this Section. As soon as practicable after the Effective Time, issue Parent shall deliver to each holder of an outstanding a Company Stock Option a document evidencing the foregoing assumption by Parent. an appropriate notice setting forth such holder's rights pursuant thereto. (b) It is intended that the intention of the parties that each Company Stock Option Options assumed by Parent shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such option Company Stock Options qualified as an incentive stock option options immediately prior to the Effective TimeTime and the provisions of this Section 5.20 shall be applied consistent with such intent. (c) Parent agrees to file a registration statement on Form S-8 for the shares of Parent Common Stock issuable with respect to assumed Company Stock Options within 10 business days after the Effective Time and shall use its reasonable efforts to maintain the effectiveness of such registration statement thereafter for so long as any of such options or other rights remain outstanding.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, each a "Company Stock Option")) under the Company Stock Option Plans, whether or not exercisable, whether or not vestedwill be assumed by Parent. Immediately following the Effective Time, each Person who is a holder of a Company Stock Option assumed by Parent hereunder, other than those executive officers of the Company specifically identified on Schedule 5.8, shall have the vesting with respect to fifty percent (50%) of his/her unvested options immediately accelerated (the "Accelerated Portion"); provided, however, that, in consideration of such vesting acceleration, each such Company Stock Option holder shall agree that the balance of his/her unvested Company Stock Options which are assumed by virtue Parent hereunder and which are not accelerated pursuant to this Section 5.8(a) shall continue to vest at the same percentage vesting rate set forth in such holder's original Company Stock Option agreement (unless the change of control provisions, if any, contained in such holder's original Company Stock Option agreement specifically provide otherwise). Except as set forth in the preceding sentence or on Schedule 5.8, no outstanding Company Stock Option will have been accelerated or have the right to be accelerated as a result of the Merger and there shall be assumed by Parent in such manner that Parent (i) is "assuming no other agreements at the Effective Time providing for change-in-control, option acceleration or other benefits as a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 result of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeMerger. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable Company Stock Option Plans immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the . (b) It is intended that Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. It is the intention of the parties that each Company Stock Option assumed by Parent shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such option Company Stock Options qualified as an incentive stock option options immediately prior to the Effective Time and the provisions of this Section 5.8 shall be applied consistent with such intent. (c) Parent intends to maintain or cause Company to maintain employee benefit plans (as defined in Section 3(3) of ERISA) for the benefit of employees of Company which are substantially similar to those benefits provided for Parent's employees, including, without limitation, any of the following benefit plans maintained by Parent: medical/dental/vision care, life insurance, disability income, sick pay, holiday and vacation pay, 401(k) plan coverage, Section 125 benefit arrangements, bonus profit-sharing or other incentive plans, pension or retirement programs, dependent care assistance, severance benefits, and employee stock option and stock purchase plans, to the extent Company employees meet the eligibility requirements for each such plan or program. Parent intends that Company's employees shall be given credit, for purposes of any service requirements for participation, for their period of service with Company and Odetics, Inc. prior to the Closing Date, and Company employees shall also, with respect to any Parent plans or programs which have co-payment, deductible or other co-insurance features, receive credit for any amounts such employees have paid to date in 1998 in co-payments, deductibles or co-insurance under comparable programs maintained by Company prior to the date hereof. In addition, Parent intends that, to the maximum extent allowable under the Company's medical/health plans, no Company employee who participates in any medical/health plan of Company at the Closing Date shall be denied coverage under Parent's medical/health plan by reason of any pre-existing condition exclusions. (d) Within twenty (20) business days following the Effective Time, Parent shall issue to each person who is a holder of a Company Stock Option assumed by Parent hereunder a document, in form and substance reasonably satisfactory to Company, evidencing such assumption. Pursuant to such document, the agreements evidencing such assumed Company Stock Option shall be deemed to be appropriately amended and adjusted so that such assumed Company Stock Option shall represent the right to acquire Parent Common Stock on the same terms and conditions as contained in the agreements evidencing such Company Stock Option (subject to the adjustments required by this Section 5.8 to effect the assumption by Parent as set forth above).

Stock Options and Employee Benefits. (a) At the Effective Time, each then outstanding option to purchase shares of Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a "Company Stock Option"), whether or not exercisable, whether or not vested, shall by virtue exercisable at the Effective Time and regardless of the Merger respective exercise prices thereof, will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of set forth in the applicable Company Stock Option Plan (and any applicable stock option agreement for such options Company Option) immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by 0.425 (the "Exchange Ratio"), rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up down to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Each assumed Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. It is the intention of the parties that each Company Stock Option assumed by Parent shall qualify be vested immediately following the Effective Time as an incentive stock option as defined in Section 422 to the same percentage of the Code to the extent permitted under Section 422 total number of shares subject thereto as it was vested as of the Code and to Effective Time (taking into consideration the extent effect of the Merger on the vesting of such option qualified as an incentive stock option assumed Company Options); provided however, that the Company shall take all best efforts so that no Company Option shall vest in excess of 50% of the unvested portion immediately prior to the Effective TimeTime as a result of the Merger.

Stock Options and Employee Benefits. (a) a At the Effective Time, each outstanding option to purchase shares of Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a "Company Stock Option"), whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the 1994 Option Plan immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. . (b It is the intention of the parties intended that each Company Stock Option Options assumed by Parent shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such option Company Options qualified as an incentive stock option options immediately prior to the Effective Time, and the provisions of this Section 5.8 shall be applied consistent with such intent. (c Notwithstanding anything to the contrary in this Section 5.8, in lieu of assuming outstanding options under the 1994 Option Plan, Parent may, at its election, cause such outstanding options to be replaced by issuing substantially equivalent replacement stock options therefor.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock Option under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a "Company Stock Option")Option Plans, whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable the Company Stock Option Plan immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisionsrights), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such the Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of the Company Common Stock at which such the Company Stock Option was exercisable immediately prior to the -45- 51 Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after After the Effective Time, upon exercise of the Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, will issue to each holder of an outstanding Company Stock Option a document evidencing notice describing the foregoing assumption by Parent. It is of such the intention of the parties that each Company Stock Option by Parent. (b) It is intended that the Company Stock Options assumed by Parent shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such option Company Stock Options qualified as an incentive stock option options immediately prior to the Effective Time. (c) Parent has reserved sufficient shares of Parent Common Stock for issuance under Section 5.11(a) and under Section 1.6(c) hereof. (d) At the Effective Time, each outstanding purchase right under the Company Purchase Plan shall be deemed to constitute a purchase right to acquire, on the same terms and conditions as were applicable under the Company Purchase Plan immediately prior to the Effective Time, shares of Parent Common Stock appropriately adjusted for the Exchange Ratio.

Stock Options and Employee Benefits. (a1) At If the Parent Merger shall not have been closed prior to or simultaneously with the Effective Time, then at the Effective Time each outstanding option to purchase shares of the Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, each a "Company Stock Option")) under the Company Stock Option Plans, whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable Company Stock Option Plan and option agreement immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions)Time, except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of determined by multiplying the number of shares of Company Common Stock that were issuable upon exercise of subject to such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio1.175, rounded down to the nearest whole number of shares at a purchase price per share of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the option exercise price per share of Company Common Stock at which provided in such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent1.175. Parent shall, from and after the Effective Time, upon exercise The number of the Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly that may be purchased on the exercise of such Company Stock Option shall not include any fractional shares but shall be rounded down to the next lower whole share of Parent Common Stock. Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of options assumed by Parent pursuant to this Section 5.20(a). As soon as practicable after the Effective Time, issue Parent shall deliver to each holder of a Company Stock Option an appropriate notice setting forth such holder's rights pursuant hereto. Any Company Stock Options assumed by the Parent pursuant to this Section 5.20(a) shall be treated in the same manner as other "Company Stock Options" (as defined in the Parent Merger Agreement) under Section 7.10 of the Parent Merger Agreement. (2) If the Parent Merger shall have been closed prior to or simultaneously with the Effective Time, then at the Effective Time, each outstanding Company Stock Option a document evidencing under the foregoing assumption Company Stock Option Plans, whether or not exercisable, will be assumed by ParentParent Acquiror. It is Each Company Stock Option so assumed by Parent Acquiror under this Agreement will continue to have and be subject to, the intention of same terms and conditions set forth in the parties applicable Company Stock Option Plan and option agreement immediately prior to the Effective Time, except that each Company Stock Option will be exercisable for that number of whole shares of Parent Acquiror common stock determined by multiplying the number of shares of Company Common Stock subject to such Company Stock Option by a fraction the numerator of which is the product of (x) 1.175 times (y) $64.00 and the denominator of which is the average closing price per share of Parent Acquiror's common stock on the NYSE, as report in The Wall Street Journal, for the 10 NYSE trading days immediately preceding the Effective Time, at a purchase price per share of common stock of Parent Acquiror determined by dividing the quotient of (I) such option exercise price per share of Company Common Stock provided in such Company Stock Option and (II) 1.175 by the quotient of (x) $64.00 and (y) the average closing price per share of Parent Acquiror's common stock on NYSE, as reported in The Wall Street Journal, for the 10 NYSE trading days immediately preceding the Effective Time. The number of shares of Parent Acquiror common stock that may be purchased on the exercise of such Company Stock Option shall not include any fractional shares but shall be rounded down to the next lower whole share of Parent Acquiror common stock. Parent Acquiror shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Acquiror common stock for delivery upon exercise of options assumed by Parent Acquiror pursuant to this Section 5.20(b). As soon as practicable after the Effective Time, Parent Acquiror shall deliver to each holder of a Company Stock Option an appropriate notice setting forth such holder's rights pursuant hereto. (3) It is intended that the Company Stock Options assumed by Parent under Section 5.20(a) or the Parent Acquiror under Section 5.20(b) shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such option Company Stock Options qualified as an incentive stock option options immediately prior to the Effective Time. The provisions of this Section 5.20 shall be applied consistent with such intent. (i) Parent agrees to file a registration statement on Form S-8 for the shares of Parent Common Stock issuable with respect to assumed Company Stock Options, and (ii) Parent Acquiror agrees to file a registration statement on Form S-8 for the shares of Parent Acquiror common stock issuable with respect to assumed Company Stock Options, in each case within 10 business days after the Effective Time, and to use its reasonable efforts to maintain the effectiveness of such registration statement thereafter for so long as any of such options or other rights remain outstanding." (12) The conditions set forth in Section 6.1(f) and 6.2(c) of this Agreement shall not be applicable to the Alternative Merger. (13) All references in this Agreement to the Surviving Corporation shall be deemed references to the Company as the Surviving Corporation in the Alternative Merger. (14) All references in this Agreement to the Merger shall be deemed references to the Alternative Merger as provided in this Section 1.12. (15) All other provisions of this Agreement shall be deemed amended as appropriate to reflect that the Alternative Merger is being effected as the Merger so that, among other things, neither the Company nor the Parent shall be deemed to have breached its representations, warranties or covenants set forth in this Agreement solely by reason of effecting the Alternative Merger". 5. Section 8.11 of the Agreement is hereby amended to read in its entirety as follows:

Stock Options and Employee Benefits. (a) At the Effective Time, the Company’s Securities Option Plans and each outstanding option to purchase shares of Company Common Stock Securities Option under the Company's Nonemployee Director Plan and the 1982 ’s Securities Option Plan (each, a "Company Stock Option")Plan, whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Securities Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable Company Securities Option Plan immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisionsrights), except that (i) each Company Stock Securities Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock LLC Membership Interests that were issuable upon exercise of such the Company Stock Securities Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Securities Option will be equal to the quotient determined by dividing the exercise price per share of the Company Common Stock LLC Membership Interests at which such the Company Stock Securities Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after After the Effective Time, upon exercise of the Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, will issue to each holder of an outstanding Company Stock Securities Option a document evidencing notice describing the foregoing assumption of such Company Securities Option by Parent. It is the intention . (b) Parent has reserved sufficient shares of the parties that each Company Parent Common Stock Option assumed by Parent shall qualify following the Effective Time as an incentive stock option as defined in Section 422 of the Code to the extent permitted for issuance under Section 422 of the Code and to the extent such option qualified as an incentive stock option prior to the Effective Time1.5(d) hereof.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Anergen Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a each an "Company Anergen Stock Option")) under the Anergen Stock Option Plans, whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeCorixa. Each Company Anergen Stock Option so assumed by Parent Corixa under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable Anergen Stock Option Plan immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions), except that (i) each Company Anergen Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Corixa Common Stock equal to the product of the number of shares of Company Anergen Common Stock that were issuable upon exercise of such Company Anergen Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Corixa Common Stock and (ii) the per share exercise price for the shares of Parent Corixa Common Stock issuable upon exercise of such assumed Company Anergen Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Anergen Common Stock at which such Company Anergen Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Company . (b) It is intended that Anergen Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. It is the intention of the parties that each Company Stock Option assumed by Parent Corixa shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such option Anergen Stock Options qualified as an incentive stock option options immediately prior to the Effective TimeTime and the provisions of this Section 5.8 shall be applied consistent with such intent.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, each a "Company Stock Option")) under the Company Stock Option Plans, whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable Company Stock Option Plan immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the . (b) It is intended that Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. It is the intention of the parties that each Company Stock Option assumed by Parent shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and Company Stock Options qualified as incentive stock options immediately prior to the extent Effective Time and the provisions of this Section 5.8 shall be applied consistent with such option qualified intent. (c) At the Effective Time, each outstanding purchase right (an "Assumed Purchase Right") under the ESPP shall be deemed to constitute a purchase right to acquire, on the same terms and conditions as an incentive stock option were applicable under the ESPP immediately prior to the Effective Time, a number of shares of Parent Common Stock determined as provided in the ESPP except that the purchase price of such shares of Parent Common Stock under each Assumed Purchase Right shall be the lower of (i) the quotient determined by dividing eighty-five percent (85%) of the fair market value of the Company Common Stock on the offering date of each assumed offering by the Exchange Ratio or (ii) eighty-five percent (85%) of the fair market value of the Parent Common Stock on each exercise date of the assumed offering occurring after the Effective Time. As soon as practicable after the Effective Time, Parent shall deliver to the participants in the ESPP appropriate notice setting forth such participants' rights pursuant thereto and that the purchase rights pursuant to the ESPP shall continue in effect on the same terms and conditions.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a "Company Stock Option")) under the Company Option Plans, whether as vested or not exercisable, whether or not vestedunvested, shall by virtue of the Merger be assumed by Parent in such manner that (1) Parent (i) is a corporation "issuing or assuming a stock option in a transaction to which Section 424(a) appliedapplies" within the meaning of Section 424 of the Code, or (ii2) Parent, to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be such a transaction within corporation were Section 424 of the CodeCode applicable to such Company options. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisionsprovisions and provisions regarding acceleration of vesting upon certain transactions other than those contemplated by this Agreement), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) terms for that number of whole shares of Parent Common Stock equal to the product (rounded to the nearest whole number of shares of Parent Common Stock subject to subsection (c) below) of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient (rounded to the nearest whole cent subject to subsection (c) below) determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up . (b) Prior to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Company Stock Options outstanding purchase rights under Company's ESPP shall be exercised in accordance with Section 7.1 of the terms ESPP and each share of Company Common Stock purchased pursuant to such exercise shall by virtue of the Merger, and without any action on the part of the holder thereof, make available for issuance all be converted into the right to receive a number of shares of Parent Common Stock covered thereby equal to the Exchange Ratio without issuance of certificates representing issued and shall, as promptly as practicable after the Effective Time, issue outstanding shares of Company Common Stock to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. ESPP participants. (c) It is the intention of the parties (1) that each subject to applicable law, the Company Stock Option Options assumed by Parent shall qualify qualify, following the Effective Time Time, as an incentive stock option options, as defined in Section 422 of the Code Code, to the extent permitted under Section 422 that the Company Stock Options qualified as incentive stock options prior to the Effective Time, (2) that each holder of a Company Option shall, after the Effective Time, have an option which preserves (but does not increase) the excess of the Code and fair market value of the shares subject to the option immediately before the Effective Time over the aggregate option price of such shares immediately before the Effective Time, (3) that the terms and conditions, restrictions and provisions of the resulting option be identical to the terms, conditions, restrictions or provisions of the Company Stock Option which was assumed as if the Parent had originally issued such Company Stock Option for Parent Common Stock, and (4) any terms, conditions, restrictions or provisions of an option applicable to a number of shares rather than a percentage or fraction of shares should be appropriately adjusted based upon the Exchange Ratio. (d) To the extent permitted by Parent's employee benefit plan and applicable law, Parent will use reasonable efforts, or will cause Company to use reasonable efforts, give individuals who are employed by Company and its subsidiaries as of the Effective Time ("Affected Employees") full credit for purposes of eligibility, vesting, benefit accrual (excluding, however, benefit accrual under any defined benefit pension plans) and determination of the level of benefits under any employee benefit plans or arrangements maintained by Parent or any subsidiary of Parent for such option qualified as an incentive stock option Affected Employees' service with Company or any subsidiary of the Company to the same extent recognized by Company immediately prior to the Effective Time. (e) To the extent permitted by Parent's employee benefit plans and applicable law, Parent will, or will cause Company to (i) waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Affected Employees under any welfare benefit plans that such employees may be eligible to participate in after the Effective Time, other than limitations or waiting periods that are already in effect with respect to such employees and that have not been satisfied as of the Effective Time under any welfare plan maintained for the Affected Employees immediately prior to the Effective Time, and (ii) provide each Affected Employee with credit for any co-payments and deductibles paid prior to the Effective Time in satisfying any applicable deductible or out- of-pocket requirements under any welfare plans that such employees are eligible to participate in after the Effective Time. (f) As of the Effective Time, Parent shall assume and honor and shall cause Company to honor in accordance with their terms all employment, severance and other compensation agreements and arrangements existing and disclosed by Company to Parent prior to the execution of this Agreement which are between Company or any subsidiary and any director, officer, or employee thereof except as otherwise expressly agreed between Parent and such person.

Stock Options and Employee Benefits. (a) At the Effective Time, each outstanding option to purchase shares of Company CKS Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, each a "Company CKS Stock Option")) under the CKS Stock Plans, whether or not exercisable, whether or not vested, shall by virtue of the Merger will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeUSWeb. Each Company CKS Stock Option so assumed by Parent USWeb under this Agreement will continue to have, and be subject to, the same terms and conditions of such options set forth in the applicable CKS Stock Plan immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisionsrights), except that (i) each Company CKS Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and A-34 (iib) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. It is the intention intent of the parties that each Company the CKS Stock Option Options assumed by Parent USWeb shall qualify following the Effective Time as an incentive stock option options as defined in Section 422 of the Code to the extent permitted CKS Stock Options qualified as incentive stock options immediately prior to the Effective Time. It is also the intent of the parties that the ESPP Options shall qualify, following the Effective Time as options granted under an employee stock purchase plan as defined in Section 422 423 of the Code and to the extent such option the ESPP Options qualified as an incentive stock option such immediately prior to the Effective Time. (c) USWeb will reserve sufficient shares of USWeb Common Stock for issuance under Section 5.11(a) and under Section 1.6(c) hereof. (d) USWeb will, or will cause CKS or the appropriate subsidiary of CKS to give individuals who are employed by CKS or any of its subsidiaries as of the Effective Time and who remain employees of CKS or such subsidiary following the Effective Time (each such employee, an "Affected Employee") full credit to the extent each such Affected Employee has been credited with service under each comparable employee benefit plan or arrangement maintained by CKS immediately prior to the Effective Time for purposes of eligibility, vesting, benefit, accrual and determination of the level of benefits under each employee benefit plan or arrangement maintained by USWeb, CKS or any such subsidiary for such Affected Employees' service with CKS or any affiliate thereof. (e) USWeb will make commercially reasonable best efforts to, or will cause CKS or the appropriate subsidiary of CKS to (i) waive all limitations as to pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Affected Employees under any welfare benefit plans that such Affected Employees may be eligible to participate in after the Effective Time, other than limitations or waiting periods that are already in effect with respect to such Affected Employees and that have not been satisfied as of the Effective Time under any welfare plan maintained for the Affected Employees immediately prior to the Effective Time, and (ii) provide each Affected Employee with credit for the remaining short plan year for any co-payments and deductibles paid under each comparable welfare plan maintained by CKS prior to the Effective Time in satisfying any applicable deductible or co-payment requirements under any welfare plans that such Affected Employees are eligible to participate in after the Effective Time. A-35 (f) As of the Effective Time, USWeb shall expressly assume and agree to perform in accordance with their terms, all employment, stay-put and other compensation agreements then existing between CKS or any subsidiary with any director, officer or employee thereof, provided such agreements are described in the CKS Schedules. (g) USWeb shall make its commercially reasonable best efforts to adopt, maintain and sponsor for the Affected Employees each employee welfare benefit plan, as defined in Section 3(1) of ERISA, (excluding any reimbursement policies, arrangements or programs and any severance plans) that are maintained and sponsored by CKS as of the Effective Time, that are set forth on the CKS Schedule under a reference to Section 2.13 of this Agreement (the "CKS Benefits Plans"), for one (1) year following the date of this Agreement (the "Benefit Period"); provided, however, that (i) such plans have been established and maintained in substantial compliance with all applicable laws, rules and regulations, up to and including the Effective Time, (ii) that the costs of such plans are not substantially in excess of their historical costs (as adjusted for price increases reasonably in line with price increases affecting such products generally), and (iii) the insurance carriers of the CKS Benefits Plans permit USWeb to adopt, maintain and sponsor such plans. In the event that the insurance carriers of the CKS Benefits Plans do not permit USWeb to adopt such plans, or to extend such plans (and related contracts) for the Affected Employees for the outstanding portion of the Benefit Period which extends beyond the current plan (contract) year on substantially similar terms as currently in effect, then USWeb shall not be obligated to maintain such plans beyond the current plan (contract) year, but shall use commercially reasonable best efforts to offer a comparable plan (or as reasonably close to comparable as possible while remaining in line with historical costs). (h) Subject to the foregoing, from and after the Effective Time, the Affected Employees shall be eligible to participate in USWeb's employee benefit plans and arrangements in which similarly situated employees of USWeb or affiliates of USWeb participate, to the same extent as such similarly situated employees of USWeb or affiliates of USWeb. (i) CKS hereby agrees to terminate any and all CKS Employee Plans subject to Section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code") as well as any and all severance or separation pay, policy, plan or arrangement prior to the Effective Time.

Stock Options and Employee Benefits. (a) At the Effective Time, each then outstanding option to purchase shares of Company Common Stock under the Company's Nonemployee Director Plan and the 1982 Option Plan (each, a "Company Stock Option"), whether or not exercisable, whether or not vested, shall by virtue exercisable at the Effective Time and regardless of the Merger respective exercise prices thereof, will be assumed by Parent in such manner that Parent (i) is "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Options, would be a transaction within Section 424 of the CodeParent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of set forth in the applicable Company Stock Option Plan (and any applicable stock option agreement for such options Company Option) immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up down to the nearest whole cent. Parent shall, from and after the Effective Time, upon exercise of the Each assumed Company Stock Options in accordance with the terms thereof, make available for issuance all shares of Parent Common Stock covered thereby and shall, as promptly as practicable after the Effective Time, issue to each holder of an outstanding Company Stock Option a document evidencing the foregoing assumption by Parent. It is the intention of the parties that each Company Stock Option assumed by Parent shall qualify be vested immediately following the Effective Time as an incentive stock option as defined in Section 422 to the same percentage of the Code to the extent permitted under Section 422 total number of shares subject thereto as it was vested as of the Code and to Effective Time (taking into consideration the extent effect of the Merger on the vesting of such option qualified as an incentive stock option prior to the Effective Time.assumed Company Options); provided