Common use of Stock Options and Equity Awards Clause in Contracts

Stock Options and Equity Awards. (1) The Board of Directors of the Company (the "Company Board"), or the appropriate committee thereof, shall take such action as is necessary so that at the Effective Time, each outstanding option to purchase shares of Company Common Stock (a "Company Stock Option") granted under the Company Stock Plans, whether or not vested, shall cease to represent a right to acquire shares of Company Common Stock, and shall thereafter constitute an option to acquire, on the same terms and conditions as were applicable to such Company Stock Option pursuant to the relevant Company Stock Plan under which it was issued and the agreement evidencing the grant thereof prior to the Effective Time, the number (rounded to the nearest whole number) of shares of Parent Common Stock determined by multiplying (x) the number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time by (y) two times the Exchange Ratio. The exercise price or base price per share of Parent Common Stock subject to any such Company Stock Option at and after the Effective Time shall be an amount (rounded to the nearest one hundredth of a cent) equal to (A) the exercise price or base price per share of Company Common Stock subject to such Company Stock Option prior to the Effective Time divided by (B) two times the Exchange Ratio. The parties acknowledge that as of the Effective Time, all Company Stock Options granted under the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees and the 1989 Stock Option Plan for Non-Employee Directors, if unvested, shall vest in full and shall remain exercisable in accordance with the terms of the applicable plan documents and award agreements for each such Company Stock Option. The parties will make good faith efforts to make equitable adjustments to ensure that the conversions of Company Stock Options contemplated by this Section 2.02(b)(1) comply with Section 409A of the Code. (2) At the Effective Time, (i) each restricted stock unit or performance unit granted under the Company Stock Plans, if unvested, shall vest in full and be settled for a cash payment to the holder of such award equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date per unit; and (ii) each award granted under the Company's Performance Incentive Award Plan and the Company's Executive Economic Profit Plan (together, the "Cash LTIPs") shall vest and be settled in cash (based on a per share valuation equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date) at the Effective Time at 100% of target. (3) Parent shall take all corporate action necessary to assume as of the Effective Time the Company's obligations under the Company Stock Options and to otherwise effectuate the provisions of this Section 2.02(b), and shall reserve for issuance a sufficient number of shares of Parent Common Stock for delivery pursuant to the terms set forth in this Section 2.02(b). Effective as of the Closing Date, Parent shall file with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on an appropriate form or a post-effective amendment to a previously filed registration statement under the Securities Act with respect to the Parent Common Stock subject to Company Stock Options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus contained therein), as well as comply with any applicable state securities or "blue sky" laws, for so long as such options remain outstanding. (4) For purposes of this Agreement, "Company Stock Plans" mean the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees, the 1989 Stock Option Plan for Non-Employee Directors and the Company's Employee Discount Stock Purchase Plan (the "ESPP").

Stock Options and Equity Awards. (1) The Prior to the Effective Time, the Board of Directors of the Company (or, if appropriate, any committee thereof administering the "Company Board"), or Company’s equity and equity based incentive plans) shall adopt such resolutions as may be required and take all corporate action necessary to effect the appropriate committee thereof, shall take such action as is necessary so that following: (a) at the Effective Time, each outstanding option to purchase shares of Company Common Stock (each, a "“Company Stock Option"”) granted under the any Company Stock PlansBenefit Plan, whether or not vested, shall cease to represent a right to acquire shares of Company Common Stock, and shall thereafter constitute an option to acquire, on the same terms and conditions as were applicable to under such Company Stock Option pursuant to the relevant Company Stock Plan under which it was issued and the agreement evidencing the grant thereof immediately prior to the Effective Time, including any provisions for acceleration, the number (rounded down to the nearest whole number) of shares of Parent Common Stock, determined by multiplying (x) the number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time by (y) the Merger Consideration. The exercise price per share of Parent Common Stock subject to any such Company Stock Option at and after the Effective Time shall be an amount (rounded up to the nearest one hundredth of a cent) equal to (A) the exercise price per share of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time divided by (B) the Merger Consideration; (b) at the Effective Time, each cash-settled restricted stock unit award (each, a “Company RSU Award”) that corresponds to shares of Company Common Stock granted under any Company Benefit Plan, outstanding as of the Effective Time, whether or not vested, shall cease to represent a Company RSU Award with respect to Company Common Stock and shall thereafter constitute a cash-settled restricted stock unit award, on the same terms and conditions as were applicable under such Company RSU Award immediately prior to the Effective Time, including any provisions for acceleration, with respect to the number (rounded to the nearest whole number) of shares of Parent Common Stock determined by multiplying (x) the number of shares of Company Common Stock subject to such Company Stock Option RSU Award immediately prior to the Effective Time by (y) two times the Exchange RatioMerger Consideration. The exercise price or base price per For the avoidance of doubt, any amounts relating to dividend equivalent rights, if any, granted with respect to such Company RSU Award that are accrued but unpaid as of the Effective Time will carry over and will be paid if required by and in accordance with the terms and conditions as were applicable to such Company RSU Award immediately prior to the Effective Time; (c) at the Effective Time, each share of Parent restricted Company Common Stock subject to vesting, repurchase or other lapse restriction solely based on continued service (each, a “Company RS Award”) granted under any Company Benefit Plan, outstanding as of the Effective Time, whether or not vested, shall cease to represent a Company RS Award with respect to Company Common Stock and shall thereafter constitute a restricted stock award, on the same terms and conditions as were applicable under such Company Stock Option at and after RS Award immediately prior to the Effective Time shall be an amount Time, including any provisions for acceleration, with respect to the number (rounded to the nearest one hundredth whole number) of a cent) equal to shares of Parent Common Stock determined by multiplying (Ax) the exercise price or base price per share number of shares of Company Common Stock subject to such Company Stock Option RS Award immediately prior to the Effective Time divided by (By) two times the Exchange RatioMerger Consideration. The parties acknowledge For the avoidance of doubt, any amounts relating to dividend equivalent rights, if any, granted with respect to such Company RS Award that are accrued but unvested and unpaid as of the Effective Time will carry over and will be paid if required by and in accordance with the terms and conditions as were applicable to such Company RS Award immediately prior to the Effective Time; (d) at the Effective Time, each award of notional shares of restricted Company Common Stock whose vesting is conditioned in full or in part based on achievement of performance goals or metrics (each, a “Company PS Award”) granted under any Company Benefit Plan, outstanding as of the Effective Time, all whether or not vested, shall cease to represent a Company PS Award with respect to Company Common Stock Options granted and shall thereafter constitute an award, on the same terms and conditions as were applicable under such Company PS Award immediately prior to the 2002 Employee and Director Effective Time (other than any performance-based vesting conditions), including any provisions for acceleration, with respect to the number (rounded to the nearest whole number) of shares of Parent Common Stock Incentive Plandetermined by multiplying (x) the number of shares of Company Common Stock subject to such Company PS Award immediately prior to the Effective Time (assuming that any performance-based vesting conditions applicable to such Company PS Award for any performance period that has not been completed as of the Effective Time are achieved at the greater of “target” performance or actual performance as of the Effective Time) by (y) the Merger Consideration. For the avoidance of doubt, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees and the 1989 Stock Option Plan for Non-Employee Directorsany amounts relating to dividend equivalent rights, if unvestedany, shall vest in full granted with respect to such Company PS Award that are accrued but unvested and shall remain exercisable unpaid as of the Effective Time will carry over and will be paid if required by and in accordance with the terms of the and conditions as were applicable plan documents and award agreements for each to such Company Stock OptionPS Award immediately prior to the Effective Time; and (e) make such other changes to the Company’s equity and equity based incentive plans as the Company and Parent may agree in writing are appropriate to give effect to the Merger. The parties will make good faith efforts With respect to make equitable adjustments to ensure that the conversions of Company Stock Options contemplated by any amount payable under this Section 2.02(b)(1) comply with 1.5 that constitutes nonqualified deferred compensation subject to Section 409A of the Code, to the extent that payment of such amount would otherwise cause the imposition of a Tax or penalty under Section 409A of the Code, such payment shall instead be made at the earliest time permitted under this Agreement and the terms of the corresponding award that will not result in the imposition of such Tax or penalty. (2f) At the Effective Time, (i) each restricted stock unit or performance unit granted under the Company Stock Plans, if unvested, shall vest in full and be settled for a cash payment to the holder of such award equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date per unit; and (ii) each award granted under the Company's Performance Incentive Award Plan and the Company's Executive Economic Profit Plan (together, the "Cash LTIPs") shall vest and be settled in cash (based on a per share valuation equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date) at the Effective Time at 100% of target. (3) Parent shall take all corporate action necessary to assume assume, as of the Effective Time Time, the Company's ’s obligations under the Company Stock Options Options, Company RSU Awards, Company RS Awards and to otherwise effectuate the provisions of this Section 2.02(b), Company PS Awards and shall reserve for issuance a sufficient number of shares of Parent Common Stock for delivery pursuant to the terms set forth in this Section 2.02(b). 1.5. (ii) As soon as practicable after the Effective as of Time and in any event no later than five days after the Closing DateEffective Time, Parent shall file with the U.S. Securities and Exchange Commission (the "“SEC"”) a registration statement on an appropriate form or a post-effective amendment to a previously filed registration statement under the Securities Act with respect to the Parent Common Stock subject to Company Stock Options options and other equity-based awards described in this Section 1.5 and shall use its reasonable best efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus contained therein), as well as comply with any applicable state securities or "“blue sky" ” laws, for so long as such options or other equity-based awards remain outstanding. (4) For purposes of this Agreement, "Company Stock Plans" mean the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees, the 1989 Stock Option Plan for Non-Employee Directors and the Company's Employee Discount Stock Purchase Plan (the "ESPP").

Stock Options and Equity Awards. (1a) The Board of Directors of the Company (the "Company Board"), or the appropriate committee thereof, shall take such action as is necessary so that at the Effective Time, each outstanding option to purchase shares of Company Common Stock (a "“Company Stock Option"”) granted under the Company Stock Plans, whether or not vested, shall cease to represent a right to acquire shares of Company Common Stock, Stock and shall thereafter constitute an a fully vested option (a “Converted Cal Dive Option”) to acquire, acquire (on the same terms and conditions as were applicable to such Company Stock Option pursuant to the relevant Company Stock Plan under which it was issued and the agreement evidencing the grant thereof prior to the Effective Time, each as amended by this Section 2.3) the number (rounded down to the nearest whole number) of shares of Parent Cal Dive Common Stock determined by multiplying (xA) the number of shares of Company Common Stock subject to that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time by (yB) two times the Stock Award Exchange Ratio. The exercise price or base price per share of Parent Cal Dive Common Stock subject to any such Company Stock Converted Cal Dive Option at and after the Effective Time shall be an amount (rounded up to the nearest one hundredth of a cent) equal to (A) the exercise price or base price per share of Company Common Stock subject to at which such Company Stock Option was exercisable immediately prior to the Effective Time divided by (B) two times the Stock Award Exchange Ratio. The parties acknowledge that Notwithstanding the foregoing, any Company Stock Option which is an “incentive stock option” (as defined in Section 422 of the Code) shall be adjusted in accordance with the requirements of Section 424 of the Code. Prior to the Effective Time, the Company shall make any amendments to the terms of the Company Stock Plans and underlying agreements as are necessary to give effect to the transactions contemplated by this Section 2.3(a), including amending each agreement evidencing a Converted Cal Dive Option to provide that, as of the Effective Time, all any reference to the Company shall be deemed a reference to Cal Dive and any reference to Company Common Stock shall be deemed a reference to Cal Dive Common Stock. (b) Immediately prior to the Effective Time, each outstanding restricted share of Company Common Stock granted pursuant to a Company Stock Options granted under Plan shall vest, and thereafter represent the 2002 Employee and Director right to receive the Merger Consideration. Following the Effective Time, no holder of a Company incentive award or other compensatory award shall have any right to receive shares of Company Common Stock Incentive Planin respect of such award. (c) Prior to the Effective Time, the 1998 Non-Employee Directors' Stock Option Plan, Company (or its Board of Directors or the 2000 Employee Stock Incentive Plan, appropriate committee thereof) shall take all corporate action necessary for the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees and the 1989 Stock Option Plan for Non-Employee Directors, if unvested, shall vest in full and shall remain exercisable in accordance with the terms of the applicable plan documents and award agreements for each such Company Stock Option. The parties will make good faith efforts to make equitable adjustments to ensure that the conversions adjustment of Company Stock Options contemplated by this Section 2.02(b)(1) comply with Section 409A of the Code. (2) At the Effective Time, (i) each restricted stock unit or performance unit granted under the Company Stock Plans, if unvested, shall vest in full and be settled for a cash payment to the holder of such award equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date per unit; and (ii) each award granted under the Company's Performance Incentive Award Plan and the Company's Executive Economic Profit Plan (together, the "Cash LTIPs") shall vest and be settled in cash (based on a per share valuation equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date) at the Effective Time at 100% of target. (3) Parent 2.3. Cal Dive shall take all corporate action necessary to assume as of the Effective Time the Company's ’s obligations under with respect to the Company Stock Converted Cal Dive Options and to otherwise effectuate the provisions of this Section 2.02(b), and shall reserve for issuance a sufficient number of shares of Parent Cal Dive Common Stock for delivery upon the exercise of the Converted Cal Dive Options pursuant to the terms set forth in this Section 2.02(b). Effective as of the Closing Date, Parent shall file with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on an appropriate form or a post-effective amendment to a previously filed registration statement under the Securities Act with respect to the Parent Common Stock subject to Company Stock Options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus contained therein), as well as comply with any applicable state securities or "blue sky" laws, for so long as such options remain outstanding2.3. (4) For purposes of this Agreement, "Company Stock Plans" mean the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees, the 1989 Stock Option Plan for Non-Employee Directors and the Company's Employee Discount Stock Purchase Plan (the "ESPP").

Stock Options and Equity Awards. (1a) The Board of Directors of the Company (the "Company Board"), or the appropriate committee thereof, shall take such action as is necessary so that at At the Effective Time, each outstanding employee or director option to purchase shares of Company Common Stock (a "Company Stock Option") granted under the Company's plans or agreements pursuant to which Company Stock Options or other stock-based awards of the Company have been or may be granted (collectively, the "Company Stock Plans"), whether vested or not vested, shall cease to represent a right to acquire shares of Company Common Stock, be deemed assumed by Parent. At and shall thereafter constitute an option to acquire, on after the same terms and conditions as were applicable to such Effective Time (1) each Company Stock Option pursuant then outstanding shall entitle the holder thereof to the relevant Company Stock Plan under which it was issued and the agreement evidencing the grant thereof prior to the Effective Time, acquire the number (rounded down to the nearest whole number) of shares of Parent Common Stock determined by multiplying (x) the number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time by (y) two times the Exchange Ratio. The , and (2) the exercise price or base price per share of Parent Common Stock subject to any such Company Stock Option at and after the Effective Time shall be an amount (rounded down to the nearest one one-hundredth of a cent) equal to (Ax) the exercise price or base price per share of Company Common Stock subject to such Company Stock Option prior to the Effective Time Time, divided by (By) two times the Exchange Ratio. The parties acknowledge that Other than as provided above, as of and after the Effective Time, all each Company Stock Options granted under Option shall be subject to the 2002 Employee same terms and Director Stock Incentive Planconditions as in effect immediately prior to the Effective Time (including, but not limited to, the 1998 Non-Employee Directors' Stock Option Planacceleration of exercisability as of the date of approval of the Merger by the shareholders of the Company), but giving effect to the Merger. Prior to the approval of the Merger by the shareholders of the Company, the 2000 Employee Stock Incentive PlanCompany shall take all actions necessary to cause all restricted shares, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees and the 1989 Stock Option Plan for Non-Employee Directors, if unvested, shall vest in full and shall remain exercisable in accordance with the terms of the applicable plan documents and award agreements for each such Company Stock Option. The parties will make good faith efforts to make equitable adjustments to ensure that the conversions of Company Stock Options contemplated by this Section 2.02(b)(1) comply with Section 409A of the Code. (2) At the Effective Time, (i) each restricted stock unit or performance unit granted units and any other stock-based awards outstanding under the Company Stock Plans, if unvested, shall vest in full and be settled for a cash payment to the holder of such award equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date per unit; and (ii) each award granted under the Company's Performance Incentive Award Plan Plans and the Company's Executive Economic Profit Honeywell Non-Employee Directors Fee and Stock Unit Plan (together, the "Cash LTIPs") shall vest and which would otherwise be settled in cash to be settled in shares of Parent Common Stock (with, in the case of restricted stock units, each such unit representing one share of Company Common Stock and with the number of shares of Parent Common Stock to be issued reflecting the Exchange Ratio). To the extent that any such award of restricted shares, restricted stock units or other stock-based on award does not become fully vested and free of restrictions in connection with the transactions contemplated hereby, such award shall be converted into a per share valuation similar award for that number of shares of Parent Common Stock equal to $10.50 plus the product of (A1) the number of shares of Company Common Stock subject to the portion of such award which had not become fully vested and free of restrictions and (2) the Exchange Ratio times (B) Ratio, and shall otherwise remain subject to the closing price of the Parent Common Stock on the Closing Date) at terms and conditions in effect immediately prior to the Effective Time at 100% (it being understood that any performance criteria to which such award remains subject may be equitably adjusted by the Management Development and Compensation Committee of targetParent Board (taking into account the recommendation of the Personnel Committee of the Company Board) to reflect the consummation of the Merger). (3b) Parent shall take all corporate action necessary to assume as of the Effective Time the Company's obligations under the Company Stock Options and to otherwise effectuate the provisions of this Section 2.02(b), and shall reserve for issuance a sufficient number of shares of Parent Common Stock for delivery pursuant to the terms set forth in this Section 2.02(b). Effective as upon exercise of Company Stock Options and settlement of other stock-based awards of the Closing DateCompany at and after the Effective Time. (c) On or as soon as practicable after the Effective Time, Parent shall file with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on an appropriate form or a post-effective amendment to a previously filed registration statement under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Parent Common Stock subject to Company Stock Options and other stock-based awards of the Company, and shall use its reasonable best efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus contained therein), as well as comply with any applicable state securities or "blue sky" laws, for so long as such options or other stock-based awards remain outstanding. (4) For purposes of this Agreement, "Company Stock Plans" mean the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees, the 1989 Stock Option Plan for Non-Employee Directors and the Company's Employee Discount Stock Purchase Plan (the "ESPP").

Stock Options and Equity Awards. (1a) The Board of Directors of the Company (the "Company Board"), or the appropriate committee thereof, Burlington shall take such action as is necessary so that at the Effective Time, each outstanding option to purchase shares of Company Burlington Common Stock (a "Company Stock OptionBURLINGTON STOCK OPTION") granted under the Company Burlington Stock Plans, whether or not vested, shall cease to represent a right to acquire shares of Company Burlington Common Stock, Stock and shall thereafter constitute an a fully vested option (a "CONVERTED CONOCOPHILLIPS OPTION") to acquire, acquire (on the same terms and conditions as were applicable to such Company Burlington Stock Option pursuant to the relevant Company Burlington Stock Plan under which it was issued and the agreement evidencing the grant thereof prior to the Effective Time, ) the number (rounded down to the nearest whole number) of shares of Parent ConocoPhillips Common Stock determined by multiplying (xA) the number of shares of Company Burlington Common Stock subject to such Company Burlington Stock Option immediately prior to the Effective Time by (yB) two times the Stock Award Exchange Ratio. The exercise price or base price per share of Parent ConocoPhillips Common Stock subject to any such Company Stock Converted ConocoPhillips Option at and after the Effective Time shall be an amount (rounded up to the nearest one hundredth of a cent) equal to (A) the exercise price or base price per share of Company Burlington Common Stock subject to such Company Burlington Stock Option immediately prior to the Effective Time divided by (B) two times the Stock Award Exchange Ratio. The parties acknowledge that Notwithstanding the foregoing, any Burlington Stock Option which is an "incentive stock option" (as defined in Section 422 of the Code) shall be adjusted in accordance with the requirements of Section 424 of the Code. Prior to the Effective Time, all Company Stock Options granted under the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees and the 1989 Stock Option Plan for Non-Employee Directors, if unvested, Burlington shall vest in full and shall remain exercisable in accordance with make any amendments to the terms of the applicable plan documents and award agreements for each such Company Burlington Stock Option. The parties will make good faith efforts Plans as are necessary to make equitable adjustments give effect to ensure that the conversions of Company Stock Options transactions contemplated by this Section 2.02(b)(13.3(a). For purposes of this Section 3.3(a), the "STOCK AWARD EXCHANGE RATIO" shall mean the sum of (i) comply with Section 409A the Exchange Ratio plus (ii) the fraction resulting from dividing the Per Share Cash Amount by the closing price per share of the CodeConocoPhillips Common Stock on the NYSE on the last trading day immediately preceding the Closing Date. (2b) At the Effective Time each outstanding restricted share of Burlington Common Stock granted pursuant to a Burlington Stock Plan shall vest. Following the Effective Time, no holder of a Burlington incentive award or other compensatory award shall have any right to receive shares of Burlington Common Stock in respect of such award. (c) At the Effective Time, each Burlington Stock Unit shall cease to be measured by the value of a number of shares of Burlington Common Stock and shall instead be measured by the value of a number of shares of ConocoPhillips Common Stock determined by multiplying (i) each restricted stock unit or performance unit granted under the Company Stock Plans, if unvested, shall vest in full and be settled for a cash payment to the holder of such award equal to $10.50 plus (Ax) the Exchange Ratio times (B) the closing price number of the Parent shares of Burlington Common Stock on the Closing Date per unit; and (ii) each award granted under the Company's Performance Incentive Award Plan and the Company's Executive Economic Profit Plan (together, the "Cash LTIPs") shall vest and be settled in cash (based on a per share valuation equal by which such Burlington Stock Unit is measured immediately prior to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date) at the Effective Time at 100% of targetby (y) the Stock Award Exchange Ratio. (3d) Parent Prior to the Effective Time, Burlington (or its Board of Directors or the appropriate committee thereof) shall take all corporate action necessary for the adjustment of Burlington Stock Options and Burlington Stock Units contemplated by this Section 3.3. ConocoPhillips shall take all corporate action necessary to assume as of the Effective Time the CompanyBurlington's obligations under with respect to the Company Stock Converted ConocoPhillips Options and to otherwise effectuate the provisions of this Section 2.02(b), and shall reserve for issuance a sufficient number of shares of Parent ConocoPhillips Common Stock for delivery upon the exercise of the Converted ConocoPhillips Option pursuant to the terms set forth in this Section 2.02(b)3.3. Not later than two Business Days after the Effective as of the Closing DateTime, Parent ConocoPhillips shall file with the U.S. Securities and Exchange Commission (the "SEC") SEC a registration statement on an appropriate form or a post-effective amendment to a previously filed registration statement under the Securities Act with respect to the Parent ConocoPhillips Common Stock subject to Company Stock Options be issued upon the exercise of the Converted ConocoPhillips Options, shall deliver an applicable prospectus relating to such registration statement and shall use its reasonable best efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus contained therein), as well as comply with any applicable state securities or "blue sky" laws, for so long as such options remain outstanding. (4) For purposes of this Agreement, "Company Stock Plans" mean the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees, the 1989 Stock Option Plan for Non-Employee Directors and the Company's Employee Discount Stock Purchase Plan (the "ESPP").

Stock Options and Equity Awards. (1) The Board of Directors of the Company (the "Company Board"), or the appropriate committee thereof, shall take such action as is necessary so that at the Effective Time, each outstanding option to purchase shares of Company Common Stock (a "Company Stock Option") granted under the Company Stock Plans, whether or not vested, shall cease to represent a right to acquire shares of Company Common Stock, and shall thereafter constitute an option to acquire, on the same terms and conditions as were applicable to such Company Stock Option pursuant to the relevant Company Stock Plan under which it was issued and the agreement evidencing the grant thereof prior to the Effective Time, the number (rounded to the nearest whole number) of shares of Parent Common Stock determined by multiplying (x) the number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time by (y) two times the Exchange Ratio. The exercise price or base price per share of Parent Common Stock subject to any such Company Stock Option at and after the Effective Time shall be an amount (rounded to the nearest one hundredth of a cent) equal to (A) the exercise price or base price per share of Company Common Stock subject to such Company Stock Option prior to the Effective Time divided by (B) two times the Exchange Ratio. The parties acknowledge that as of the Effective Time, all Company Stock Options granted under the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees and the 1989 Stock Option Plan for Non-Employee Directors, if unvested, shall vest in full and shall remain exercisable in accordance with the terms of the applicable plan documents and award agreements for each such Company Stock Option. The parties will make good faith efforts to make equitable adjustments to ensure that the conversions of Company Stock Options contemplated by this Section 2.02(b)(1) comply with Section 409A of the Code. (2) At the Effective Time, (i) each restricted stock unit or performance unit granted under the Company Stock Plans, if unvested, shall vest in full and be settled for a cash payment to the holder of such award equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date 20.00 per unit; and (ii) each award granted under the Company's Performance Incentive Award Plan and the Company's Executive Economic Profit Plan (together, the "Cash LTIPs") shall vest and be settled in cash (based on a per share valuation equal to $10.50 10.00 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date) at the Effective Time at 100% of target. (3) Parent shall take all corporate action necessary to assume as of the Effective Time the Company's obligations under the Company Stock Options and to otherwise effectuate the provisions of this Section 2.02(b), and shall reserve for issuance a sufficient number of shares of Parent Common Stock for delivery pursuant to the terms set forth in this Section 2.02(b). Effective as of the Closing Date, Parent shall file with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on an appropriate form or a post-effective amendment to a previously filed registration statement under the Securities Act with respect to the Parent Common Stock subject to Company Stock Options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus contained therein), as well as comply with any applicable state securities or "blue sky" laws, for so long as such options remain outstanding. (4) For purposes of this Agreement, "Company Stock Plans" mean the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees, the 1989 Stock Option Plan for Non-Employee Directors and the Company's Employee Discount Stock Purchase Plan (the "ESPP").

Stock Options and Equity Awards. (1) The Board of Directors of the Company (the "Company BoardCOMPANY BOARD"), or the appropriate committee thereof, shall take such action as is necessary so that at the Effective Time, each outstanding option to purchase shares of Company Common Stock (a "Company Stock OptionCOMPANY STOCK OPTION") granted under the Company Stock Plans, whether or not vested, shall cease to represent a right to acquire shares of Company Common Stock, and shall thereafter constitute an option to acquire, on the same terms and conditions as were applicable to such Company Stock Option pursuant to the relevant Company Stock Plan under which it was issued and the agreement evidencing the grant thereof prior to the Effective Time, the number (rounded to the nearest whole number) of shares of Parent Common Stock determined by multiplying (x) the number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time by (y) two times the Exchange Ratio. The exercise price or base price per share of Parent Common Stock subject to any such Company Stock Option at and after the Effective Time shall be an amount (rounded to the nearest one hundredth of a cent) equal to (A) the exercise price or base price per share of Company Common Stock subject to such Company Stock Option prior to the Effective Time divided by (B) two times the Exchange Ratio. The parties acknowledge that as of the Effective Time, all Company Stock Options granted under the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees and the 1989 Stock Option Plan for Non-Employee Directors, if unvested, shall vest in full and shall remain exercisable in accordance with the terms of the applicable plan documents and award agreements for each such Company Stock Option. The parties will make good faith efforts to make equitable adjustments to ensure that the conversions of Company Stock Options contemplated by this Section 2.02(b)(1) comply with Section 409A of the Code. (2) At the Effective Time, (i) each restricted stock unit or performance unit granted under the Company Stock Plans, if unvested, shall vest in full and be settled for a cash payment to the holder of such award equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date per unit; and (ii) each award granted under the Company's Performance Incentive Award Plan and the Company's Executive Economic Profit Plan (together, the "Cash LTIPsCASH LTIPS") shall vest and be settled in cash (based on a per share valuation equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date) at the Effective Time at 100% of target. (3) Parent shall take all corporate action necessary to assume as of the Effective Time the Company's obligations under the Company Stock Options and to otherwise effectuate the provisions of this Section 2.02(b), and shall reserve for issuance a sufficient number of shares of Parent Common Stock for delivery pursuant to the terms set forth in this Section 2.02(b). Effective as of the Closing Date, Parent shall file with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on an appropriate form or a post-effective amendment to a previously filed registration statement under the Securities Act with respect to the Parent Common Stock subject to Company Stock Options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus contained therein), as well as comply with any applicable state securities or "blue sky" laws, for so long as such options remain outstanding. (4) For purposes of this Agreement, "Company Stock PlansCOMPANY STOCK PLANS" mean the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees, the 1989 Stock Option Plan for Non-Employee Directors and the Company's Employee Discount Stock Purchase Plan (the "ESPP").

Stock Options and Equity Awards. (1a) The Board of Directors of the Company (the "Company Board"), or the appropriate committee thereof, Burlington shall take such action as is necessary so that at the Effective Time, each outstanding option to purchase shares of Company Burlington Common Stock (a "Company Burlington Stock Option") granted under the Company Burlington Stock Plans, whether or not vested, shall cease to represent a right to acquire shares of Company Burlington Common Stock, Stock and shall thereafter constitute an a fully vested option (a "Converted ConocoPhillips Option") to acquire, acquire (on the same terms and conditions as were applicable to such Company Burlington Stock Option pursuant to the relevant Company Burlington Stock Plan under which it was issued and the agreement evidencing the grant thereof prior to the Effective Time, ) the number (rounded down to the nearest whole number) of shares of Parent ConocoPhillips Common Stock determined by multiplying (xA) the number of shares of Company Burlington Common Stock subject to such Company Burlington Stock Option immediately prior to the Effective Time by (yB) two times the Stock Award Exchange Ratio. The exercise price or base price per share of Parent ConocoPhillips Common Stock subject to any such Company Stock Converted ConocoPhillips Option at and after the Effective Time shall be an amount (rounded up to the nearest one hundredth of a cent) equal to (A) the exercise price or base price per share of Company Burlington Common Stock subject to such Company Burlington Stock Option immediately prior to the Effective Time divided by (B) two times the Stock Award Exchange Ratio. The parties acknowledge that Notwithstanding the foregoing, any Burlington Stock Option which is an "incentive stock option" (as defined in Section 422 of the Code) shall be adjusted in accordance with the requirements of Section 424 of the Code. Prior to the Effective Time, all Company Stock Options granted under the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees and the 1989 Stock Option Plan for Non-Employee Directors, if unvested, Burlington shall vest in full and shall remain exercisable in accordance with make any amendments to the terms of the applicable plan documents and award agreements for each such Company Burlington Stock Option. The parties will make good faith efforts Plans as are necessary to make equitable adjustments give effect to ensure that the conversions of Company Stock Options transactions contemplated by this Section 2.02(b)(1) comply with 3.3(a). For purposes of this Section 409A 3.3(a), the "Stock Award Exchange Ratio" shall mean the sum of the Code. (2) At the Effective Time, (i) each restricted stock unit or performance unit granted under the Company Stock Plans, if unvested, shall vest in full and be settled for a cash payment to the holder of such award equal to $10.50 plus (A) the Exchange Ratio times plus (Bii) the fraction resulting from dividing the Per Share Cash Amount by the closing price per share of the Parent ConocoPhillips Common Stock on the Closing Date per unit; and (ii) each award granted under NYSE on the Company's Performance Incentive Award Plan and the Company's Executive Economic Profit Plan (together, the "Cash LTIPs") shall vest and be settled in cash (based on a per share valuation equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on last trading day immediately preceding the Closing Date) at the Effective Time at 100% of target. (3) Parent shall take all corporate action necessary to assume as of the Effective Time the Company's obligations under the Company Stock Options and to otherwise effectuate the provisions of this Section 2.02(b), and shall reserve for issuance a sufficient number of shares of Parent Common Stock for delivery pursuant to the terms set forth in this Section 2.02(b). Effective as of the Closing Date, Parent shall file with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on an appropriate form or a post-effective amendment to a previously filed registration statement under the Securities Act with respect to the Parent Common Stock subject to Company Stock Options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus contained therein), as well as comply with any applicable state securities or "blue sky" laws, for so long as such options remain outstanding. (4) For purposes of this Agreement, "Company Stock Plans" mean the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees, the 1989 Stock Option Plan for Non-Employee Directors and the Company's Employee Discount Stock Purchase Plan (the "ESPP").

Stock Options and Equity Awards. (1a) The Board of Directors of the Company (the "Company Board"), or the appropriate committee thereof, shall take such action as is necessary so that at At the Effective Time, each outstanding employee or director option to purchase shares of Company Common Stock (a "Company Stock Option") -------------------- granted under the Company's plans or agreements pursuant to which Company Stock Options or other stock-based awards of the Company have been or may be granted (collectively, the "Company Stock Plans"), whether vested or not vested, shall cease to represent a right to acquire shares of Company Common Stock, -------------------- be deemed assumed by Parent. At and shall thereafter constitute an option to acquire, on after the same terms and conditions as were applicable to such Effective Time (1) each Company Stock Option pursuant then outstanding shall become an option (a "Parent Stock Option") ------------------- to the relevant Company Stock Plan under which it was issued and the agreement evidencing the grant thereof prior to the Effective Time, acquire the number (rounded down to the nearest whole number) of shares of Parent Common Stock determined by multiplying (x) the number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time by (y) two times the Exchange Ratio. The Ratio (as adjusted pursuant to Section 1.2(b)), and (2) the exercise price or base price per share of Parent Common Stock subject to any such Company Stock Option at and after the Effective Time shall be an amount (rounded down to the nearest one one-hundredth of a cent) equal to (Ax) the exercise price or base price per share of Company Common Stock subject to such the applicable Company Stock Option prior to the Effective Time Time, divided by (By) two times the Exchange RatioRatio (as adjusted pursuant to Section 1.2(b)). The parties acknowledge that Other than as provided above, as of and after the Effective Time, all Company Stock Options granted under the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' each Parent Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees and the 1989 Stock Option Plan for Non-Employee Directors, if unvested, shall vest in full and shall remain exercisable in accordance with be subject to the terms and conditions of the applicable plan documents and award agreements for each such Company Stock Option. The parties will make good faith efforts Option as in effect immediately prior to make equitable adjustments to ensure that the conversions of Company Stock Options contemplated by this Section 2.02(b)(1) comply with Section 409A of the Code. (2) At the Effective Time, (i) each restricted stock unit or performance unit granted under the Company Stock Plans, if unvested, shall vest in full and be settled for a cash payment but giving effect to the holder of such award equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date per unit; and (ii) each award granted under the Company's Performance Incentive Award Plan and the Company's Executive Economic Profit Plan (together, the "Cash LTIPs") shall vest and be settled in cash (based on a per share valuation equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date) at the Effective Time at 100% of targetMerger. (3b) Parent shall take all corporate action necessary to assume as of the Effective Time the Company's obligations under the Company Stock Options and to otherwise effectuate the provisions of this Section 2.02(b), and shall reserve for issuance a sufficient number of shares of Parent Common Stock for delivery pursuant to upon exercise of Parent Stock Options. (c) On or as soon as practicable after the terms set forth in this Section 2.02(b). Effective as of the Closing DateTime, Parent shall file with the U.S. Securities and Exchange Commission (the "SECCommission") a ---------- registration statement on an appropriate form or a post-effective amendment to a previously filed registration statement under the Securities Act of 1933, as amended, and the rules and regulations thereunder (the "Securities Act"), with -------------- respect to the Parent Common Stock subject to Company Parent Stock Options and shall use its commercially reasonable best efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus contained therein), as well as comply with any applicable state securities or "blue sky" laws, for so long as such options remain outstanding. (4) For purposes of this Agreement, "Company Stock Plans" mean the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees, the 1989 Stock Option Plan for Non-Employee Directors and the Company's Employee Discount Stock Purchase Plan (the "ESPP").

Stock Options and Equity Awards. (1a) The Board of Directors of the Company (the "Company Board"), or the appropriate committee thereof, shall take such action as is necessary so that at At the Effective Time, each outstanding employee or director option to purchase shares of Company Honeywell Common Stock (a "Company Honeywell Stock Option") granted under Honeywell's plans or agreements pursuant to which Honeywell Stock Options or other stock-based awards of Honeywell have been or may be granted (collectively, the Company "Honeywell Stock Plans"), whether vested or not vested, shall cease to represent a right be deemed assumed by Parent. At and after the Effective Time (1) each Honeywell Stock Option then outstanding shall entitle the holder thereof to acquire shares of Company Common Stock, and shall thereafter constitute an option to acquire, on the same terms and conditions as were applicable to such Company Stock Option pursuant to the relevant Company Stock Plan under which it was issued and the agreement evidencing the grant thereof prior to the Effective Time, the number (rounded up to the nearest whole number) of shares of Parent Common Stock determined by multiplying (x) the number of shares of Company Honeywell Common Stock subject to such Company Honeywell Stock Option immediately prior to the Effective Time by (y) two times the Exchange Ratio. The , and (2) the exercise price or base price per share of Parent Common Stock subject to any such Company Honeywell Stock Option at and after the Effective Time shall be an amount (rounded up to the nearest one one-hundredth of a cent) equal to (Ax) the exercise price or base price per share of Company Honeywell Common Stock subject to such Company Honeywell Stock Option prior to the Effective Time Time, divided by (By) two times the Exchange Ratio. The parties acknowledge that Other than as provided above, as of and after the Effective Time, all Company Stock Options granted under the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' each Honeywell Stock Option Planshall be subject to the same terms and conditions as in effect immediately prior to the Effective Time. Notwithstanding the foregoing, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 any adjustment to a Honeywell Stock Option Plan for Executives and Key Employees and the 1989 Stock Option Plan for Non-Employee Directors, if unvested, which is an "incentive stock option" shall vest be made in full and shall remain exercisable in accordance with the terms of the applicable plan documents and award agreements for each such Company Stock Option. The parties will make good faith efforts to make equitable adjustments to ensure that the conversions of Company Stock Options contemplated by this Section 2.02(b)(1) comply a manner consistent with Section 409A 424(a) of the Code. . Prior to the date hereof, Honeywell has taken all actions necessary to cause holders of restricted shares, restricted stock units and any other stock-based awards outstanding under Honeywell Stock Plans, which would otherwise be settled in cash, to receive a settlement of any such awards in shares of Parent Common Stock (2) At with, in the Effective Timecase of restricted stock units, each such unit representing one share of Honeywell Common Stock and with the number of shares of Parent Common Stock to be issued reflecting the Exchange Ratio). The holder of a restricted stock unit to be settled in shares of Parent Common Stock shall receive within ninety days following the Closing Date, a number of shares of Parent Common Stock equal to (i) each the cash value of such restricted stock unit or performance unit granted under based upon the Company "Merger Price Per Share" (as defined in the applicable Honeywell Stock PlansPlan), if unvested, shall vest in full and be settled for a cash payment to the holder of such award equal to $10.50 plus divided by (A) the Exchange Ratio times (Bii) the closing price of the Parent Common Stock on the Closing Date per unit; and (ii) each award granted under the Company's Performance Incentive Award Plan and the Company's Executive Economic Profit Plan (together, the "Cash LTIPs") shall vest and be settled in cash (based on a per share valuation equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date) at the Effective Time at 100% . All fractional shares of targetParent Common Stock shall be paid in cash. (3b) Parent shall take all corporate action necessary to assume as of the Effective Time the Company's obligations under the Company Stock Options and to otherwise effectuate the provisions of this Section 2.02(b), and shall reserve for issuance a sufficient number of shares of Parent Common Stock for delivery pursuant to upon exercise of Honeywell Stock Options and settlement of other stock-based awards of Honeywell at and after the terms set forth in this Section 2.02(b). Effective Time. (c) On or as of soon as practicable after the Closing DateEffective Time, Parent shall file with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on an appropriate form or a post-effective amendment to a previously filed registration statement under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Parent Common Stock subject to Company Honeywell Stock Options and other stock-based awards of Honeywell, and shall use its reasonable best efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus contained therein), as well as comply with any applicable state securities or "blue sky" laws, for so long as such options or other stock-based awards remain outstanding. (4) For purposes of this Agreement, "Company Stock Plans" mean the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees, the 1989 Stock Option Plan for Non-Employee Directors and the Company's Employee Discount Stock Purchase Plan (the "ESPP").

Stock Options and Equity Awards. (1a) The Board of Directors of the Company (the "Company Board"), or the appropriate committee thereof, shall take such action as is necessary so that at At the Effective Time, each outstanding employee or director option to purchase shares of Company Common Stock (a "Company Stock Option") granted under the Company's plans or agreements pursuant to which Company Stock Options or other stock-based awards of the Company have been or may be granted (collectively, the "Company Stock Plans"), whether vested or not vested, shall cease to represent a right to acquire shares of Company Common Stock, be deemed assumed by Parent. At and shall thereafter constitute an option to acquire, on after the same terms and conditions as were applicable to such Effective Time (1) each Company Stock Option pursuant then outstanding shall become an option (a "Parent Stock Option") to the relevant Company Stock Plan under which it was issued and the agreement evidencing the grant thereof prior to the Effective Time, acquire the number (rounded down to the nearest whole number) of shares of Parent Common Stock determined by multiplying (x) the number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time by (y) two times the Exchange Ratio. The Ratio (as adjusted pursuant to Section 1.2(b)), and (2) the exercise price or base price per share of Parent Common Stock subject to any such Company Stock Option at and after the Effective Time shall be an amount (rounded down to the nearest one one-hundredth of a cent) equal to (Ax) the exercise price or base price per share of Company Common Stock subject to such the applicable Company Stock Option prior to the Effective Time Time, divided by (By) two times the Exchange RatioRatio (as adjusted pursuant to Section 1.2(b)). The parties acknowledge that Other than as provided above, as of and after the Effective Time, all Company Stock Options granted under the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' each Parent Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees and the 1989 Stock Option Plan for Non-Employee Directors, if unvested, shall vest in full and shall remain exercisable in accordance with be subject to the terms and conditions of the applicable plan documents and award agreements for each such Company Stock Option. The parties will make good faith efforts Option as in effect immediately prior to make equitable adjustments to ensure that the conversions of Company Stock Options contemplated by this Section 2.02(b)(1) comply with Section 409A of the Code. (2) At the Effective Time, (i) each restricted stock unit or performance unit granted under the Company Stock Plans, if unvested, shall vest in full and be settled for a cash payment but giving effect to the holder of such award equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date per unit; and (ii) each award granted under the Company's Performance Incentive Award Plan and the Company's Executive Economic Profit Plan (together, the "Cash LTIPs") shall vest and be settled in cash (based on a per share valuation equal to $10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent Common Stock on the Closing Date) at the Effective Time at 100% of targetMerger. (3b) Parent shall take all corporate action necessary to assume as of the Effective Time the Company's obligations under the Company Stock Options and to otherwise effectuate the provisions of this Section 2.02(b), and shall reserve for issuance a sufficient number of shares of Parent Common Stock for delivery pursuant to upon exercise of Parent Stock Options. (c) On or as soon as practicable after the terms set forth in this Section 2.02(b). Effective as of the Closing DateTime, Parent shall file with the U.S. Securities and Exchange Commission (the "SECCommission") a registration statement on an appropriate form or a post-effective amendment to a previously filed registration statement under the Securities Act of 1933, as amended, and the rules and regulations thereunder (the "Securities Act"), with respect to the Parent Common Stock subject to Company Parent Stock Options and shall use its commercially reasonable best efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus contained therein), as well as comply with any applicable state securities or "blue sky" laws, for so long as such options remain outstanding. (4) For purposes of this Agreement, "Company Stock Plans" mean the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key Employees, the 1989 Stock Option Plan for Non-Employee Directors and the Company's Employee Discount Stock Purchase Plan (the "ESPP").