Common use of Stock Options and Other Stock-Based Awards Clause in Contracts

Stock Options and Other Stock-Based Awards. (a) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Time for which, as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date.

Stock Options and Other Stock-Based Awards. (ai) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder holders thereof, become fully be converted into a vested and exercisable. With respect option to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of purchase shares of Company Parent Common Stock subject to such Company (a “Parent Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Time for which, as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire”), on the same terms and conditions (except as provided in this Section 5.5(a)(i)) as were applicable under such Company Stock Option (giving effect immediately prior to any terms and conditions resulting from the Transactions)Effective Time, the to purchase that number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, Stock equal to the product of (A) the total number of shares of Company Common Stock subject to such Company Stock Option and (B) the Exchange Ratio Ratio, rounded down to the nearest whole number of shares of Parent Common Stock. The per-share exercise price for the shares of Parent Common Stock issuable upon exercise of such Parent Stock Options will be equal to the quotient determined by dividing (as defined below), at an x) the exercise price per share of Parent Company Common StockStock at which the Company Stock Options were exercisable immediately prior to the Effective Time by (y) the Exchange Ratio, rounded and rounding the resulting per-share exercise price up to the nearest whole cent. (ii) At the Effective Time, each award of restricted Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (the “Restricted Shares”) and each restricted or deferred stock unit based on shares of Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (the “Restricted Stock Units”) shall, automatically and without any action on the part of the holders thereof, vest and be converted, on the same terms and conditions (except as provided in this Section 5.5(a)(ii)) as were applicable under such Restricted Shares and Restricted Stock Units, as applicable, immediately prior to the Effective Time, into a number of shares of Parent Common Stock or units with respect to Parent Common Stock equal to the quotient obtained by dividing product of (A) the aggregate exercise price for total number of shares of Company Common Stock subject to such grant of Restricted Shares or Restricted Stock Units, as applicable, and (B) the Exchange Ratio. (iii) Immediately prior to the Effective Time, each award of performance units with respect to shares of Company Common Stock under a Company Stock Plan that is outstanding immediately prior to the Effective Time (collectively, the “Company Performance Units”) shall, automatically and without any action on the part of the holders thereof, vest and be converted, into the right to receive, immediately prior to the Effective Time, an amount in cash equal to the product of (i) the total number of shares of Company Common Stock subject to such Company Performance Unit, assuming the achievement of all performance goals applicable to such Company Performance Unit at target levels and (ii) the fair market value of Company Common Stock Option by on the Exchange Ratio day immediately prior to the Effective Time. (eachiv) At the Effective Time, as so adjustedParent shall assume all the obligations of the Company under the Company Stock Plans, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any each outstanding Company Stock Option to which Section 409A or 421 (a) of and the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of agreements evidencing the Code, respectivelygrants thereof. As soon as practicable following after the Effective Time, Parent shall deliver to the holders of Adjusted Company Stock Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans Plans, and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Company Stock Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii5.5(a)). (v) after giving effect Parent shall take all corporate action necessary to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes reserve for issuance a sufficient number of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price shares of Parent Common Stock on for delivery upon exercise of the New York Parent Stock Exchange (Options resulting from the “NYSE”) on the five (5) trading days immediately preceding the Closing Dateconversion of Company Stock Options assumed by Parent in accordance with this Section 5.5(a).

Stock Options and Other Stock-Based Awards. (ai) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Time for which, as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), Stock (rounded down to the nearest whole share, ) equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below)Ratio, at an exercise price per share of Parent Common Stock, Stock (rounded up to the nearest whole cent, ) equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii5.7(a)(i) with respect to any Company Stock Option to which Section 409A or 421 (a421(a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii5.7(a)(i) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes . (ii) At the Effective Time, each award of this Section 2.4(a)(iirestricted Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (the “Restricted Shares”) shall, automatically and without any action on the part of the holder thereof, be converted into the right to receive, on the same terms and conditions as were applicable under such Restricted Shares (giving effect to any terms and conditions resulting from the Transactions), “a number of shares of Parent Common Stock (and cash in lieu of fractional shares), restricted, as applicable after giving effect to any terms and conditions resulting from the Transactions, equal to the product of (A) the total number of shares of Company Common Stock subject to such grant of Restricted Shares and (B) the Exchange Ratio” ; provided, that, unless the holder shall mean have remitted to the Merger Consideration Company the amount required to be withheld with respect to the making of such payment under the Code or any provision of state, local or foreign tax Law, such number of shares of Parent Common Stock shall be reduced by a number of shares of Parent Common Stock equal to the amount required to be deducted and withheld with respect to the making of such payment under the Code or any provision of state, local or foreign tax Law divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange NYSE on the five trading days trailing the Closing Date (the “NYSEParent Stock Conversion Price”) and the Surviving Corporation shall be responsible for timely and properly remitting any such withholdings to the proper taxing authority. (iii) Effective as of the Effective Time, each award of performance shares (the “Company Performance Shares”) or restricted stock units (the “Company RSUs”) with respect to shares of Company Common Stock under a Company Stock Plan that is outstanding immediately prior to the Effective Time shall, automatically and without any action on the five part of the holder thereof, be converted, on the same terms and conditions as were applicable under such Company Performance Shares or Company RSUs (5giving effect to any terms and conditions resulting from the Transactions), into the right to receive from Parent a number of performance shares or stock units, restricted as applicable after giving effect to any terms and conditions resulting from the Transactions, in respect of Parent Common Stock (and cash in lieu of fractional shares) trading days immediately preceding equal to the Closing Dateproduct of (A) the total number of shares of Company Common Stock subject to such grant of Company Performance Shares or Company RSUs at the target level of performance and (B) the Exchange Ratio; provided, that, unless the holder shall have remitted to the Company the amount required to be withheld with respect to the making of such payment under the Code or any provision of state, local or foreign tax Law, such number of shares of Parent Common Stock shall be reduced by a number of shares of Parent Common Stock equal to the amount required to be deducted and withheld with respect to the making of such payment under the Code or any provision of state, local or foreign tax Law divided by the Parent Stock Conversion Price (and the Surviving Corporation shall be responsible for timely and properly remitting any such withholdings to the proper taxing authority). (iv) Prior to the Effective Time, the Company shall pass resolutions to effect the foregoing provisions of this Section 5.7(a). (v) As soon as practicable following the Effective Time, Parent shall prepare and file with the SEC a registration statement on Form S-8 (or another appropriate form) registering shares of Parent Common Stock subject to issuance upon the exercise of the Adjusted Options, and substitute restricted shares, performance shares and stock units in respect of Parent Common Stock issuable in accordance with subsections (ii) and (iii) of this Section 5.7(a). The Company shall cooperate with, and assist Parent in the preparation of, such registration statement. Parent shall keep such registration statement effective (and maintain the current status of the prospectus required thereby) for so long as any Adjusted Options, substitute restricted shares, performance shares and stock units in respect of Parent Common Stock remain outstanding.

Stock Options and Other Stock-Based Awards. (a) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans As of the Company (the “Company Stock Plans”)Acceptance Time, whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as by virtue of the Effective Time, automatically consummation of the Offer and without any action on the part of the holder holders thereof, become fully vested and exercisable. With respect each option to such purchase shares of Company Common Stock Options: (i) each Company Stock Option for which, as granted to employees or directors of the Effective Company or any of its Subsidiaries under any Company Benefit Plan that is outstanding immediately prior to the Acceptance Time, whether vested or unvested (collectively, the Merger Consideration exceeds the exercise price per Share “ Company Options ”) shall be canceled cancelled and converted into the right of the holder thereof to receive from the Parent, and Parent shall pay or cause to be paid to each such holder of Company Options, at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Acceptance Time, a lump sum cash payment equal to an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1i) the number of shares of Company Common Stock subject to such Company Option immediately prior to the Acceptance Time and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share under share of Company Common Stock of such Company Stock Option immediately prior to the Acceptance Time, provided that if any holder of a Company Option notifies the Company, in writing, at least 10 business days prior to the Acceptance Time of his or her irrevocable election to have such Company Options assumed by Parent as of the Acceptance Time, each such Company Option held by such person shall be converted into an option (an “ Adjusted Option ”) to purchase, on the same terms and conditions as applied to each such Company Option immediately prior to the Acceptance Time, the number of whole shares of common stock, par value $0.01 per share, of Parent (2the “Parent Common Stock”) that is equal to the number of shares of Company Common Stock subject to such Company Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Acceptance Time for which, as of multiplied by the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option Incentive Award Exchange Ratio (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, Stock (rounded up to the nearest whole cent, ) equal to the quotient obtained by dividing the aggregate exercise price for the shares of each such share of Company Common Stock subject to such Company Stock Option immediately prior to the Acceptance Time divided by the Incentive Award Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions)Ratio. For purposes of this Section 2.4(a)(iiAgreement, the “ Incentive Award Exchange Ratio ” shall be the quotient of (x) divided by (y), “Exchange Ratio” shall mean where (x) is the Merger Consideration divided by per share closing price of the volume weighted average per-Company Common Stock at the Acceptance Time (or, if such date is not a trading day, the trading day immediately preceding the Acceptance Time) on the NYSE and (y) is the per share trading closing price of Parent Common Stock on at the New York Stock Exchange Acceptance Time (or, if such date is not a trading day, the “NYSE”trading day immediately preceding the Acceptance Time) on the five (5) trading days immediately preceding the Closing DateNYSE.

Stock Options and Other Stock-Based Awards. (ai) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder holders thereof, become fully vested vest and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Time for which, as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire(a “Parent Stock Option”), on the same terms and conditions (except as provided in this Section 5.8(a)(i)) as were applicable under such Company Stock Option (giving effect immediately prior to any terms and conditions resulting from the Transactions)Effective Time, the to purchase that number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, Stock equal to the product of (A) the total number of shares of Company Common Stock subject to such Company Stock Option and (B) the Exchange Ratio Ratio, rounded down to the nearest whole number of shares of Parent Common Stock. The per-share exercise price for the shares of Parent Common Stock issuable upon exercise of such Parent Stock Options will be equal to the quotient determined by dividing (as defined below), at an x) the exercise price per share of Parent Company Common StockStock at which the Company Stock Options were exercisable immediately prior to the Effective Time by (y) the Exchange Ratio, rounded and rounding the resulting per-share exercise price up to the nearest whole cent. (ii) At the Effective Time, each award of restricted Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (the “Restricted Shares”) shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, vest and be converted into, in accordance with Section 2.1 a number of shares of Parent Common Stock (and cash in lieu of fractional shares) equal to the quotient obtained by dividing product of (A) the aggregate exercise price for the total number of shares of Company Common Stock subject to such Company Stock Option by grant of Restricted Shares and (B) the Exchange Ratio Ratio. (each, iii) Effective as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver each award of restricted share units or phantom shares with respect to shares of Company Common Stock under a Company Stock Plan that is outstanding immediately prior to the holders Effective Time (collectively, the “Company RSUs”) shall, as of Adjusted Options appropriate notices setting forth such holders’ rights pursuant the Effective Time, whether or not then vested or free of conditions to the respective Company Stock Plans payment, vest and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options automatically and agreements have been assumed by Parent and shall continue in effect without any action on the same terms and conditions (subject part of the holder thereof, be converted, into the right to receive from Parent, at the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes Effective Time, a number of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price shares of Parent Common Stock on (and cash in lieu of fractional shares to be paid by the New York Surviving Corporation to the holder) equal to the product of (A) the total number of shares of Company Common Stock subject to such grant of Company RSUs and (B) the Exchange Ratio; provided, that, for the avoidance of doubt, to the extent that a holder of a Company RSU has made a valid deferral election with respect to such Company RSU, the settlement of such Company RSU shall be governed by the terms of such deferral election. (iv) Prior to the “NYSE”) on Effective Time, the five (5) trading days immediately preceding Company shall pass resolutions to effect the Closing Dateforegoing provisions of this Section 5.8(a).

Stock Options and Other Stock-Based Awards. Except as otherwise agreed to in writing between the Company, Parent and Merger Sub: (ai) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”)Plans or otherwise, whether vested or unvested, that is outstanding and unexercised immediately prior to the Effective Time shall, as of the Effective Time, automatically and be cancelled without any action on the part of the holder thereof. Each holder of a Company Stock Option that is outstanding and unexercised at the Effective Time, become fully whether or not vested or exercisable, and exercisable. With respect that has an exercise price per share that is less than the Merger Consideration shall be entitled to receive at the Effective Time an amount in cash in U.S. dollars equal to the product of (x) the total number of shares of Company Common Stock subject to such Company Stock Options: Option and (iy) each Company Stock Option for whichthe excess, as if any, of the Effective Time, amount of the Merger Consideration exceeds over the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder share of Company Common Stock subject to such Company Stock Option shall be entitled Option, with the aggregate amount of such payment rounded down to receivethe nearest cent, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Tax Law with respect to the making of such payment. (ii) At the Effective Time, each award of restricted stock (“Restricted Stock”) and performance accelerated restricted stock units (PARSUs) that are then vested shall, as of the Effective Time, be cancelled without any action on the part of the holder thereof. Each holder of Restricted Stock or PARSUs that are vested and outstanding at the Effective Time shall be entitled to receive at the Effective Time an amount in cash in U.S. dollars equal to the product of (1x) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the total number of vested shares of Company Common Stock subject to such Company Restricted Stock Option; and or PARSUs and (iiy) each Company the Merger Consideration, with the aggregate amount of such payment rounded down to the nearest cent, less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Tax Law with respect to the making of such payment. The Restricted Stock Option and PARSUs that is are outstanding immediately prior to but not vested at the Effective Time will not be cancelled or converted into the right to receive the Merger Consideration and shall continue in effect after the Effective Time on substantially similar terms, provided that such Restricted Stock and PARSUs would not give rise to any right to receive Company Common Stock or Parent Common Stock after the Effective Time, but that such right would be substituted with the right to an amount of cash equal to the Merger Consideration for which, as each share of Company Common Stock that is the subject of each such Restricted Stock or XXXXX. (iii) Prior to the Effective Time, the Merger Consideration does not exceed Board of Directors or the exercise price per Share Compensation Committee of the Board of Directors, as applicable, shall be amended and converted into an option to acquireadopt any necessary amendments to, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to or take any terms and conditions resulting from the Transactions)necessary actions pursuant to, the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted applicable Company Benefit Plans with respect to Company Stock Options and agreements have been assumed by Parent Company Stock-Based Awards to implement the foregoing provisions of Sections 5.5(a)(i) and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions5.5(a)(ii). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date.

Stock Options and Other Stock-Based Awards. (a) Unless otherwise noted, the provisions of this Section 1.6 pertain to all plans sponsored by Target under which options and other stock-based amounts are awarded, including Target’s 2010 Stock Incentive Plan and Target’s 2000 Stock Option Plan, all as amended, and the award agreements thereunder (collectively, the “Target Stock Plan”). (b) Each option to purchase shares of Company Target Common Stock issued under a Target Stock Plan (each, a “Company Target Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding and unexercised immediately prior to before the Effective Time shallwill, as of at the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested be converted into an obligation of Buyer to pay (or cause to be paid) and exercisable. With respect to such Company Stock Options: (i) each Company a right of the holder of the Target Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, to receive cash in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1i) the excess, if any, of amount equal to $5.54 minus the Merger Consideration over the per share exercise price per Share under of such Company Target Stock Option and (2ii) the number of shares of Company Target Common Stock subject to such Company Target Stock Option; and (ii) each Company . The amount determined in accordance with the foregoing sentence shall be paid to the applicable holder of a Target Stock Option as soon as reasonably practicable following the Closing Date. In the event that the product obtained by the foregoing calculation with respect to a Target Stock Option is outstanding immediately prior to the Effective Time for whichzero or a negative number, as of then such Target Stock Option will, at the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquirepurchase Buyer Common Stock (each, a “Converted Stock Option”), on the same terms and conditions as were applicable under such Company Target Stock Option (giving but subject to and taking into account any required acceleration of vesting of such Target Stock Option pursuant to the terms of the Target Stock Plan as in effect on the date hereof without any further action by Target). The number of shares of Buyer Common Stock subject to any terms and conditions resulting from the Transactions), each such Converted Stock Option will be equal to the number of shares of common stock of Parent, par value $.01 per share (“Parent Target Common Stock”)Stock subject to the Target Stock Option multiplied by the Exchange Ratio, rounded down to the nearest whole shareshare of Buyer Common Stock, equal to the product of the number of shares of Company Common Stock subject to and each such Company Converted Stock Option and the Exchange Ratio (as defined below), at will have an exercise price per share of Parent Common Stock, (rounded up to the nearest whole cent, ) equal to the quotient obtained by dividing the aggregate per share exercise price for specified in the shares of Company Common Stock subject to such Company applicable Target Stock Option divided by the Exchange Ratio (eachRatio, as so adjusted, an “Adjusted Option”). The adjustments provided in this consistent with the requirements of Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a424(a) of the Code applies or Treasury Regulation Section 1.409A-1(b)(5)(v)(D), as applicable. At the Effective Time, Buyer shall assume the Target Stock Plan; provided, that such assumption shall only be with respect to the Converted Stock Options and are intended Buyer shall have no obligation to be effected in a manner which is consistent with Section 409A and 424(a) of make any additional grants or awards under the Code, respectivelyTarget Stock Plan. As soon as reasonably practicable following after the Effective TimeClosing Date, Parent shall Buyer will deliver to the holders of Adjusted Converted Stock Options appropriate any required notices setting forth such holders’ rights pursuant to the respective Company Target Stock Plans Plan and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, award documents and stating that such Adjusted Converted Stock Options and agreements have been assumed issued by Parent Buyer and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) 1.6(b), after giving effect to the Merger and the terms of the Target Stock Plan). (c) At the Effective Time, each share of restricted Target Common Stock issued pursuant to the Target Stock Plan (“Target Restricted Stock”) that is outstanding immediately before the Effective Time shall vest in full and the restrictions thereon shall lapse, and, as of the Effective Time, each share of Target Common Stock that was formerly Target Restricted Stock shall be entitled to receive the Merger Consideration in accordance with Section 1.4; provided, however, that, upon the lapsing of restrictions with respect to each share of Target Restricted Stock, Target shall be entitled to deduct and withhold such amounts as may be required to be deducted and withheld under the Code and any applicable state or local Tax laws with respect to the lapsing of such restrictions. (d) At the Effective Time, Buyer will assume all the obligations of Target under the Target Stock Plan, each outstanding Converted Stock Option and any agreements evidencing the grants thereof. As soon as practicable after the Effective Time, Buyer will deliver to the holders of Converted Stock Options any required notices setting forth such holders’ rights pursuant to the relevant Target Stock Plan and award documents and stating that such Converted Stock Options have been assumed by Buyer and will continue in effect on the same terms and conditions, subject to the adjustments required by this Section 1.6 after giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided and the terms of the relevant Target Stock Plan or individual agreements pursuant to which such awards were granted. (e) Following the Effective Time, Buyer may in its discretion maintain the Target Stock Plan in accordance with Nasdaq rules, except that (i) all equity or equity-based awards issued by Buyer pursuant to the volume weighted average per-share trading price Target Stock Plan following the Effective Time will be awards in respect of Parent Buyer Common Stock, (ii) all references to Target (other than any references relating to a “change in control,” “change of control” or terms of similar import of Target) in each Target Stock Plan and in each award agreement thereunder will be deemed to refer to Buyer, unless Buyer determines otherwise, and (iii) the number of shares of Buyer Common Stock on available for future issuance pursuant to each Target Stock Plan following the New York Stock Exchange Effective Time (the “NYSEAvailable Target Stock Plan Shares”) on will equal the five number of shares of Target Common Stock so available immediately before the Effective Time multiplied by the Exchange Ratio, rounded to the nearest whole share of Buyer Common Stock. (5f) trading days immediately preceding The Target Board (or, if appropriate, any committee administering the Closing DateTarget Stock Plan) shall, before the Effective Time, adopt such resolutions or take such other actions as may be required to effect the transactions described in this Section 1.6. In addition, before the Effective Time, Target shall deliver all necessary or appropriate notices to each holder of Target Stock Options setting forth each holder’s rights pursuant to this Section 1.

Stock Options and Other Stock-Based Awards. (ai) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of be converted into the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled right at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, receive an amount in cash (without interestcash, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1x) the total number of shares of Common Stock subject to such Company Stock Option multiplied by (y) the excess, if any, of the amount of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares share of Company Common Stock subject to such Company Stock Option; and, with the aggregate amount of such payment rounded to the nearest cent (the aggregate amount of such cash hereinafter referred to as the “Option Consideration”). (ii) At the Effective Time, each right of any kind, contingent or accrued, to receive shares of Company Common Stock or benefits measured in whole or in part by the value of a number of shares of Company Common Stock, and each award of any kind consisting of shares of Company Common Stock, granted under the Company Stock Option that Plans or the Company Benefit Plans (including performance shares, restricted stock, restricted stock units, phantom units, deferred stock units and dividend equivalents), other than Company Stock Options (each, a “Company Stock-Based Award”), whether vested or unvested, which is outstanding immediately prior to the Effective Time for whichshall cease to represent a right or award with respect to shares of Company Common Stock, as of shall become fully vested and shall entitle the holder thereof to receive, at the Effective Time, an amount in cash equal to the Merger Consideration does not exceed in respect of each Share underlying a particular vested Stock-Based Award (except that in the exercise price per Share case of the long-term performance share plan, such awards shall be amended vest on a pro rata basis reflecting the portion of the applicable performance period that has elapsed through the date on which the Effective Time occurs assuming performance at the greater of target or actual levels as described in more detail on Section 5.1(a)(iii) of the Company Disclosure Schedule) (the aggregate amount of such cash, together with the Option Consideration, hereinafter referred to as the “Option and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock-Based Consideration”). For the avoidance of doubt, rounded down this Section 5.5(a)(ii) shall not apply to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to held in the Company’s leveraged ESOP which shall be covered by Article II as issued and outstanding Shares. (iii) The compensation committee of the board of directors of the Company shall pass such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) resolutions with respect to any the Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be Options and are intended to be effected in a manner which is Company Stock-Based Awards consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes foregoing provisions of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date5.5.

Stock Options and Other Stock-Based Awards. (a) Each Except as otherwise agreed by Parent and the holder of any outstanding option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), each Company Stock Option, whether vested or unvested, that is outstanding immediately prior to the Effective Acceptance Time shall, as of shall be cancelled immediately prior to the Effective Acceptance Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect thereof shall be entitled to receive an amount in cash in U.S. dollars equal to the product of (x) the total number of shares of Common Stock subject to such Company Stock Options: Option and (iy) each Company Stock Option for whichthe excess, as if any, of the Effective Time, amount of the Merger Consideration exceeds Offer Price over the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder share of Common Stock subject to such Company Stock Option, with the aggregate amount of such payment rounded down to the nearest cent (the aggregate amount of such cash payable to holders of all Company Stock Options, the “Option shall be entitled to receive, as soon as practicable, but in no event later than three (3Consideration”) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, U.S. state or local or foreign Tax Law with respect to the making of such payment. The Company shall pay the holders of Company Stock Options the cash payments described in this Section 3.05(a) at or as soon as reasonably practicable after the Acceptance Time. (b) Except as otherwise agreed by Parent and the holder of any outstanding stock appreciation right with respect to shares of Common Stock (each, a “Company SAR”) granted under the Company Stock Plans, each Company SAR, whether vested or unvested, that is outstanding immediately prior to the Acceptance Time shall be cancelled immediately prior to the Acceptance Time, and the holder thereof shall be entitled to receive an amount in cash in U.S. dollars equal to the product of (1x) the total number of shares of Common Stock subject to such Company SAR and (y) the excess, if any, of the Merger Consideration amount of the Offer Price over the exercise price per Share under such Company Stock Option and (2) the number share of shares of Company Common Stock subject to such Company Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to SAR, with the Effective Time for which, as aggregate amount of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), payment rounded down to the nearest whole sharecent (the aggregate amount of such cash payable to holders of all Company SARs, the “SAR Consideration”) less such amounts as are required to be withheld or deducted under the Code or any provision of U.S. state or local Tax Law with respect to the making of such payment. The Company shall pay the holders of Company SARs the cash payments described in this Section 3.05(b) at or as soon as reasonably practicable after the Acceptance Time. (c) Except as otherwise agreed by Parent and the holder of any award of restricted Common Stock (the “Restricted Shares”) granted under the Company Stock Plans that has not previously vested, immediately prior to the Acceptance Time, each Restricted Share shall be cancelled and forfeited, and the holder thereof shall be entitled to receive an amount per Restricted Share in cash in U.S. dollars equal to the product Offer Price (the aggregate amount of such cash payable to holders of all Restricted Shares, the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below“Restricted Shares Consideration”), at an exercise price per share less such amounts as are required to be withheld or deducted under the Code or any provision of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) U.S. state or local Tax Law with respect to any the making of such payment. The Company Stock Option shall pay the Restricted Shares Consideration at or as soon as reasonably practicable after the Acceptance Time. Any Restricted Shares that vest prior to which the cancellation contemplated by the first sentence of this Section 409A or 421 (a3.05(c) of the Code applies shall be treated as shares of Common Stock for all purposes of this Agreement, including Section 1.01 and are intended Section 3.01. No Restricted Share that has not vested prior to the cancellation and forfeiture contemplated by the first sentence of this Section 3.05(c) may be effected in a manner which is consistent with Section 409A and 424(atendered to Merger Sub pursuant to the Offer. (d) of the Code, respectively. As soon as practicable Immediately following the Effective Acceptance Time, Parent shall deliver deposit or shall cause to be deposited with the Company cash in U.S. dollars sufficient to pay the Option Consideration, SAR Consideration and the Restricted Shares Consideration. (e) Prior to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to Acceptance Time, the respective Company, the Company Stock Plans Board and the agreements evidencing Compensation Committee of the grants of such Adjusted OptionsCompany Board, which as applicable, shall provide, among other things, that such Adjusted Options adopt any resolutions and agreements have been assumed by Parent take any and shall continue in effect on all actions necessary to effectuate the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes provisions of this Section 2.4(a)(ii)3.05. The Company shall take all actions necessary to ensure that from and after the Acceptance Time, “Exchange Ratio” shall mean neither Parent nor the Merger Consideration divided by the volume weighted average per-share trading price Surviving Corporation will be required to deliver shares of Parent Common Stock on or other capital stock of the New York Company to any person pursuant to or in settlement of Company Stock Exchange (Options, Company SARs or Restricted Shares after the “NYSE”) on the five (5) trading days immediately preceding the Closing DateAcceptance Time.

Stock Options and Other Stock-Based Awards. (ai) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder holders thereof, become fully vested vest and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Time for which, as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire(a “Parent Stock Option”), on the same terms and conditions (except as provided in this Section 6.7(a)(i)) as were applicable under such Company Stock Option (giving effect immediately prior to any terms and conditions resulting from the Transactions)Effective Time, the to purchase that number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, Stock equal to the product of (A) the total number of shares of Company Common Stock subject to such Company Stock Option and (B) the Exchange Ratio Ratio, rounded down to the nearest whole number of shares of Parent Common Stock; provided, however, there shall be no acceleration of the vesting of Company Stock Options granted in 2012 and all such Company Stock Options, upon conversion into Parent Stock Options, shall remain subject to the vesting conditions as were applicable to such Company Stock Options immediately prior to the Effective Time. The per-share exercise price for the shares of Parent Common Stock issuable upon exercise of such Parent Stock Options will be equal to the quotient determined by dividing (as defined below), at an x) the exercise price per share of Parent Company Common StockStock at which the Company Stock Options were exercisable immediately prior to the Effective Time by (y) the Exchange Ratio, rounded and rounding the resulting per-share exercise price up to the nearest whole cent. (ii) Effective as of the Effective Time, (A) each award of restricted share units with respect to shares of Company Common Stock under a Company Stock Plan that is outstanding immediately prior to the Effective Time (collectively, the “Company RSUs”) (other than any Company RSUs granted in 2012) shall, as of the Effective Time, whether or not then vested or free of conditions to payment, automatically and without any action on the part of the holder thereof, be converted, into the right to receive from Parent, at the Effective Time, a number of shares of Parent Common Stock (and cash in lieu of fractional shares to be paid by the Surviving Corporation to the holder) equal to the quotient obtained by dividing product of (x) the aggregate exercise price for the total number of shares of Company Common Stock subject to such grant of Company Stock Option by RSUs (in the case of any award subject to performance vesting, at the target level of performance applicable to such award) and (y) the Exchange Ratio (eachRatio; provided, as so adjustedthat, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) for the avoidance of doubt, to the extent that a holder of a Company RSU has made a valid deferral election with respect to any such Company Stock Option to which Section 409A or 421 (a) RSU, the settlement of the Code applies such Company RSU shall be governed by the terms of such deferral election, and (B) all Company RSUs granted in 2012 that are intended outstanding immediately prior to be effected in a manner which is consistent with Section 409A and 424(a) the Effective Time shall, as of the Code, respectively. As soon as practicable following the Effective Time, automatically and without any action on the part of the holder thereof, be converted into a number of Parent shall deliver RSUs equal to the holders product of Adjusted Options appropriate notices setting forth (x) the number of Company RSUs held by such holders’ rights pursuant holder immediately prior to the respective Company Stock Plans Effective Time and (y) the agreements evidencing Exchange Ratio, rounded down to the grants of such Adjusted Optionsnearest whole number, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect remain outstanding on the same terms and conditions (subject as are applicable to such awards prior to the adjustments required Effective Time, with the performance targets applicable thereto equitably adjusted by this the Company’s Board of Directors or a Committee thereof before the Effective Time as appropriate (and in a manner consistent with that outlined in Section 2.4(a)(ii6.7(a)(ii)(B) after giving effect of the Company Disclosure Schedule) to reflect relevant performance targets. (iii) Prior to the Merger and giving Effective Time, the Company shall pass such resolutions or take such other actions as required to effect to any terms and conditions resulting from the Transactions). For purposes foregoing provisions of this Section 2.4(a)(ii6.7(a), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date.

Stock Options and Other Stock-Based Awards. (a) Unless otherwise noted, the provisions of this Section 3.4 pertain to all plans sponsored by Beacon Federal under which options and other stock-based amounts are awarded, including Beacon Federal’s 2008 Equity Incentive Plan (the “Beacon Federal Stock Plan”); provided, however, that any accelerated vesting performed pursuant to this Section 3.4 shall only be performed if required by the terms of the Beacon Federal Stock Plan as in effect on the date hereof without any further action by Beacon Federal. (b) Each stock option to purchase shares of Company Common issued under a Beacon Federal Stock Plan (each, a “Company Beacon Federal Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”)or pursuant to any individual equity compensation award agreement, whether vested or unvested, that is outstanding and unexercised immediately prior to before the Effective Time shallwill cease, as of at the Effective Time, automatically to represent a right to acquire shares of Beacon Federal Common Stock and will be converted at the Effective Time, without any action on the part of the holder thereof, become fully vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Beacon Federal Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Time for which, as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquirepurchase BHLB Common Stock (a “Converted Stock Option”), on the same terms and conditions as were applicable under such Company Beacon Federal Stock Option (giving but subject to and taking into account any required acceleration of vesting of such Beacon Federal Stock Option pursuant to the terms of the Beacon Federal Stock Plan as in effect on the date hereof without any further action by Beacon Federal). The number of shares of BHLB Common Stock subject to any terms and conditions resulting from each such Converted Stock Option will be equal to the Transactions), product obtained by multiplying (i) the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Beacon Federal Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company applicable Beacon Federal Stock Option by the Exchange Ratio Ratio, and by dividing (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(iix) with respect to any Company the exercise price per Beacon Federal Stock Option in effect immediately prior to which Section 409A or 421 the Effective Time by (ay) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(aExchange Ratio. (c) of the Code, respectively. As soon as practicable following At the Effective Time, Parent shall deliver to if the holders terms of Adjusted Options appropriate notices setting forth such holders’ rights the Beacon Federal Stock Plan or the underlying award agreement so provide, each share of restricted Beacon Federal Common Stock issued pursuant to the respective Company Beacon Federal Stock Plans Plan (“Beacon Federal Restricted Stock”) that is outstanding immediately before the Effective Time shall vest in full and the agreements evidencing restrictions thereon shall lapse, and, as of the grants Effective Time, each share of Beacon Federal Common Stock that was formerly Beacon Federal Restricted Stock shall be entitled to receive the Merger Consideration in accordance with Section 3.1.3; provided, however, that, upon the lapsing of restrictions with respect to each share of Beacon Federal Restricted Stock, Beacon Federal shall be entitled to deduct and withhold such amounts as may be required to be deducted and withheld under the Code and any applicable state or local Tax laws with respect to the lapsing of such Adjusted Optionsrestrictions. At the Effective Time, which shall provideeach award of Beacon Federal Restricted Stock granted under the Beacon Federal Stock Plan or pursuant to any individual equity compensation award agreement (a “Beacon Federal Restricted Stock Award”) that is outstanding immediately before the Effective Time and that does not become vested pursuant to the preceding sentence will cease, among other thingsat the Effective Time, that to represent a right with respect to shares of Beacon Federal Common Stock and will be converted at the Effective Time, without any action on the part of the holder of such Adjusted Options and agreements have been assumed by Parent and shall continue in effect Beacon Federal Restricted Stock Award, to shares of BHLB Common Stock (each, a “Converted Restricted Stock Award”), on the same terms and conditions (as were applicable under the Beacon Federal Restricted Stock Award. The number of shares of BHLB Common Stock subject to each such Converted Restricted Stock Award will equal the number of shares of Beacon Federal Common Stock subject to the adjustments required applicable Beacon Federal Restricted Stock Award multiplied by this Section 2.4(a)(ii) after giving effect the Exchange Ratio, rounded to the Merger and giving effect nearest whole share of BHLB Common Stock. (d) The shares of BHLB Common Stock to any terms and conditions resulting from be issued to the Transactions). For purposes holders of this Section 2.4(a)(ii), “Exchange Ratio” Beacon Federal Stock Options shall mean be registered with the SEC under the Merger Consideration divided Registration Statement, which shall be converted by the volume weighted average pera post-share trading price of Parent Common Stock effective amendment to a registration statement on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing DateForm S-8.

Stock Options and Other Stock-Based Awards. (a) Each As of the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee Stock Award Plan, as amended and director stock plans restated as of March 31, 2004, as subsequently amended, the Non-Employee Directors’ Stock Option and Stock Unit Plan, amended and restated as of January 8, 2002, as subsequently amended, the Restricted Stock Unit Plan, as amended and restated as of March 31, 2004, as subsequently amended or the Company Cap Plans (as defined below) (collectively, the “Company Stock Plans”), whether vested or unvested, ) that is outstanding immediately prior to the Effective Time shall(collectively, the “Company Options”) shall be converted into an option (an “Adjusted Option”) to purchase, on the same terms and conditions (including applicable vesting requirements) as applied to each such Company Option immediately prior to the Effective Time, the number of whole shares of Parent Common Stock that is equal to the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share), at an exercise price per share of Parent Common Stock (rounded up to the nearest whole xxxxx) equal to the exercise price for each such share of Company Common Stock subject to such Company Option immediately prior to the Effective Time divided by the Exchange Ratio; provided, further, that, in the case of any Company Option to which Section 421 of the Code applies as of the Effective Time by reason of its qualification under Section 422 of the Code, the exercise price, the number of shares of Parent Common Stock subject to such option and the terms and conditions of exercise of such option shall be determined in a manner consistent with the requirements of Section 424(a) of the Code. (b) As of the Effective Time, automatically each restricted share unit with respect to shares of Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (collectively, the “Company RSUs”) shall, by virtue of the Merger and without any action on the part of the holder thereof, become fully vested be converted into a restricted share unit, on the same terms and exercisable. With respect conditions (including applicable vesting requirements and deferral provisions) as applied to each such Company Stock Options: (i) each Company Stock Option for which, as of RSU immediately prior to the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making number of such payment) shares of Parent Common Stock that is equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to the Company RSU immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded to the nearest whole share) (a “Parent RSU”). The obligations in respect of the Parent RSUs shall be payable or distributable in accordance with the terms of the agreement, plan or arrangement relating to such Company Stock Option; andParent RSUs. (iic) Subject to the last two sentences of this Section 1.5(c), as of the Effective Time, each share unit with respect to shares of Company Common Stock Option granted under the Capital Accumulation Plan for Senior Managing Directors Amended and Restated November 29, 2000, as subsequently amended and the Capital Accumulation Plan for Senior Managing Directors Amended and Restated as of October 28, 1999, as subsequently amended (collectively, the “Company Cap Plans”) that is outstanding immediately prior to the Effective Time for which(collectively, as the “Company Cap Units”) shall, by virtue of the Effective TimeMerger and without any action on the part of the holder thereof, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquirea share unit, on the same terms and conditions (including applicable vesting requirements and deferral provisions) as were applicable under applied to each such Company Stock Option (giving effect Cap Unit immediately prior to any terms and conditions resulting from the Transactions)Effective Time, with respect to the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, Stock that is equal to the product of the number of shares of Company Common Stock subject to such the Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up Cap Unit immediately prior to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option Effective Time multiplied by the Exchange Ratio (each, as so adjusted, an rounded to the nearest whole share) (a “Adjusted OptionParent Cap Unit”). The adjustments provided in Subject to the last two sentences of this Section 2.4(a)(ii) with 1.5(c), the obligations in respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies Parent Cap Units shall be and are intended to be effected payable or distributable in a manner which is consistent accordance with Section 409A and 424(a) the terms of the Codeagreement, respectivelyplan or arrangement relating to such Parent Cap Units. Parent and the Company agree to cooperate in good faith to adjust, effective upon the occurrence of the Merger, the features under the Company Cap Plans and related award agreements that provide for awards of additional Company Cap Units in respect of previously awarded Company Cap Units to take into account the occurrence of the Merger. (d) As soon as practicable following of the Effective Time, Parent shall deliver to all amounts denominated in Company Common Stock and held in participant accounts (other than Company RSUs and Company Cap Units) (collectively, the holders of Adjusted Options appropriate notices setting forth such holders’ rights “Company Deferred Equity Units”) either pursuant to (i) the respective Company Stock Plans or (ii) any nonqualified deferred compensation program or any individual deferred compensation agreements (collectively, the “Company Deferred Equity Unit Plans”) shall, by virtue of the Merger and without any action on the agreements evidencing part of the grants of such Adjusted Optionsholder thereof, which shall providebe converted into deferred equity units, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject including applicable vesting requirements and deferral provisions) as applied to such Company Deferred Equity Units immediately prior to the adjustments required by this Section 2.4(a)(ii) after giving effect Effective Time, with respect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes number of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price shares of Parent Common Stock that is equal to the number of shares of Company Common Stock in which such Company Deferred Equity Units are denominated immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded to the nearest whole share) (a “Parent Deferred Equity Unit”). The obligations in respect of the Parent Deferred Equity Units shall be payable or distributable in accordance with the terms of the Company Deferred Equity Unit Plan relating to such Parent Deferred Equity Units. (e) As of the Effective Time, Parent shall assume the obligations and succeed to the rights of Company under the Company Stock Plans, the Company Cap Plans and the Company Deferred Equity Unit Plans with respect to the Company Options (as converted into Adjusted Options), the Company RSUs (as converted into Parent RSUs), the Company Cap Units (as converted into Parent Cap Units) and Company Deferred Equity Units (as converted into Parent Deferred Equity Units). Company and Parent agree that prior to the Effective Time each of the Company Stock Plans shall be amended to reflect the transactions contemplated by this Agreement, including the conversion of the Company Options, Company RSUs, Company Cap Units and Company Deferred Equity Units pursuant to paragraphs (a), (b), (c) and (d) above and the substitution of Parent for Company thereunder to the extent appropriate to effectuate the assumption of such Company Stock Plans by Parent, (ii) to preclude any automatic or formulaic grant of options, restricted shares or other awards thereunder on or after the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date.Effective Time, and

Stock Options and Other Stock-Based Awards. (a) Each option Unless otherwise noted, the provisions of this Section 2.02(a) pertain to purchase all options to acquire shares of Company First Choice Common Stock (each, a “Company Stock Option”) granted under the employee which are outstanding and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding unexercised immediately prior to the Effective Time shall(collectively, as of the “First Choice Options”). At the Effective Time, automatically and without each First Choice Option granted under any action on First Choice Benefit Plan that is unvested immediately prior to the part Effective Time will vest or be forfeited, as the case may be, pursuant to the terms of the holder thereof, become fully applicable First Choice Benefit Plan and/or award agreement. Each vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock outstanding First Choice Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following canceled and extinguished at the Effective Time, an amount in cash Time and exchanged for the right to receive (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision ) an amount of state, local or foreign Law with respect to the making of such payment) cash equal to the product of (1i) the aggregate number of shares of First Choice Common Stock issuable upon exercise of such First Choice Option and (ii) the excess, if any, of (A) the Merger Consideration product of (x) the Exchange Ratio and (y) the Average VWAP as of the Trading Day immediately preceding the Closing Date over (B) the per-share exercise price per Share under of such Company Stock First Choice Option (the “Option Consideration”), less any applicable Taxes required to be withheld with respect to such cash payment. The Surviving Entity shall pay, or cause to be paid, the Option Consideration to holders of First Choice Options through the next administratively practicable payroll following the Effective Time. First Choice shall use Commercially Reasonable Efforts to obtain the written acknowledgement of each holder of a then-outstanding First Choice Option with regard to the cancellation of such First Choice Option and (2) the number payment therefor in accordance with the terms of shares of Company Common Stock subject to such Company Stock Option; andthis Agreement. (iib) each Company The provisions of this Section 2.02(b) pertain to all restricted stock awards and other stock-based awards granted by First Choice, including but not limited to awards granted under the First Choice Stock Option that is Plans, issued and outstanding immediately prior to the Effective Time except for whichFirst Choice Options (collectively, as of the “First Choice Stock Awards”). At the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company each First Choice Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down Award that is unsettled or unvested immediately prior to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (eachEffective Time will vest or be cancelled, as so adjustedthe case may be, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company terms of the applicable First Choice Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing DatePlan and/or award agreement.

Stock Options and Other Stock-Based Awards. (a) Each As of the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee Stock Award Plan, as amended and director stock plans restated as of March 31, 2004, as subsequently amended, the Non-Employee Directors' Stock Option and Stock Unit Plan, amended and restated as of January 8, 2002, as subsequently amended, the Restricted Stock Unit Plan, as amended and restated as of March 31, 2004, as subsequently amended or the Company Cap Plans (as defined below) (collectively, the “"Company Stock Plans”), whether vested or unvested, ") that is outstanding immediately prior to the Effective Time shall(collectively, the "Company Options") shall be converted into an option (an "Adjusted Option") to purchase, on the same terms and conditions (including applicable vesting requirements) as applied to each such Company Option immediately prior to the Effective Time, the number of whole shares of Parent Common Stock that is equal to the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share), at an exercise price per share of Parent Common Stock (rounded up to the nearest whole penny) equal to the exercise price for each such share of Company Comxxx Xtock subject to such Company Option immediately prior to the Effective Time divided by the Exchange Ratio; provided, that, in the case of any Company Option to which Section 421 of the Code applies as of the Effective Time by reason of its qualification under Section 422 of the Code, the exercise price, the number of shares of Parent Common Stock subject to such option and the terms and conditions of exercise of such option shall be determined in a manner consistent with the requirements of Section 424(a) of the Code. (b) As of the Effective Time, automatically each restricted share unit with respect to shares of Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (collectively, the "Company RSUs") shall, by virtue of the Merger and without any action on the part of the holder thereof, become fully vested be converted into a restricted share unit, on the same terms and exercisable. With respect conditions (including applicable vesting requirements and deferral provisions) as applied to each such Company Stock Options: (i) each Company Stock Option for which, as of RSU immediately prior to the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making number of such payment) shares of Parent Common Stock that is equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to the Company RSU immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded to the nearest whole share) (a "Parent RSU"). The obligations in respect of the Parent RSUs shall be payable or distributable in accordance with the terms of the agreement, plan or arrangement relating to such Company Stock Option; andParent RSUs. (iic) Subject to the last sentence of this Section 1.5(c), as of the Effective Time, each share unit with respect to shares of Company Common Stock Option granted under the Capital Accumulation Plan for Senior Managing Directors Amended and Restated November 29, 2000, as subsequently amended and the Capital Accumulation Plan for Senior Managing Directors Amended and Restated as of October 28, 1999, as subsequently amended (collectively, the "Company Cap Plans") that is outstanding immediately prior to the Effective Time for which(collectively, as the "Company Cap Units") shall, by virtue of the Effective TimeMerger and without any action on the part of the holder thereof, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquirea share unit, on the same terms and conditions (including applicable vesting requirements and deferral provisions) as were applicable under applied to each such Company Stock Option (giving effect Cap Unit immediately prior to any terms and conditions resulting from the Transactions)Effective Time, with respect to the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, Stock that is equal to the product of the number of shares of Company Common Stock subject to such the Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up Cap Unit immediately prior to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option Effective Time multiplied by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”rounded to the nearest whole share) (a "Parent Cap Unit"). The adjustments provided in Subject to the last sentence of this Section 2.4(a)(ii) with 1.5(c), the obligations in respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies Parent Cap Units shall be and are intended to be effected payable or distributable in a manner which is consistent accordance with Section 409A and 424(a) the terms of the Codeagreement, respectivelyplan or arrangement relating to such Parent Cap Units. Parent and the Company agree to cooperate in good faith to adjust, effective upon the occurrence of the Merger, the features under the Company Cap Plans and related award agreements that provide for awards of additional Company Cap Units in respect of previously awarded Company Cap Units to take into account the occurrence of the Merger. (d) As soon as practicable following of the Effective Time, Parent shall deliver to all amounts denominated in Company Common Stock and held in participant accounts (other than Company RSUs and Company Cap Units) (collectively, the holders of Adjusted Options appropriate notices setting forth such holders’ rights "Company Deferred Equity Units") either pursuant to (i) the respective Company Stock Plans or (ii) any nonqualified deferred compensation program or any individual deferred compensation agreements (collectively, the "Company Deferred Equity Unit Plans") shall, by virtue of the Merger and without any action on the agreements evidencing part of the grants of such Adjusted Optionsholder thereof, which shall providebe converted into deferred equity units, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject including applicable vesting requirements and deferral provisions) as applied to such Company Deferred Equity Units immediately prior to the adjustments required by this Section 2.4(a)(ii) after giving effect Effective Time, with respect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes number of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price shares of Parent Common Stock that is equal to the number of shares of Company Common Stock in which such Company Deferred Equity Units are denominated immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded to the nearest whole share) (a "Parent Deferred Equity Unit"). The obligations in respect of the Parent Deferred Equity Units shall be payable or distributable in accordance with the terms of the Company Deferred Equity Unit Plan relating to such Parent Deferred Equity Units. (e) As of the Effective Time, Parent shall assume the obligations and succeed to the rights of Company under the Company Stock Plans, the Company Cap Plans and the Company Deferred Equity Unit Plans with respect to the Company Options (as converted into Adjusted Options), the Company RSUs (as converted into Parent RSUs), the Company Cap Units (as converted into Parent Cap Units) and Company Deferred Equity Units (as converted into Parent Deferred Equity Units). Company and Parent agree that prior to the Effective Time each of the Company Stock Plans shall be amended (i) to reflect the transactions contemplated by this Agreement, including the conversion of the Company Options, Company RSUs, Company Cap Units and Company Deferred Equity Units pursuant to paragraphs (a), (b), (c) and (d) above and the substitution of Parent for Company thereunder to the extent appropriate to effectuate the assumption of such Company Stock Plans by Parent, (ii) to preclude any automatic or formulaic grant of options, restricted shares or other awards thereunder on or after the New York Effective Time, and (iii) to the extent requested by Parent in a timely manner and subject to compliance with applicable law and the terms of the plan, to terminate any or all Company Stock Exchange Plans effective immediately prior to the Effective Time (other than with respect to outstanding awards thereunder). (f) Notwithstanding anything to the “NYSE”contrary contained in this Section 1.5, at Parent's request, the Company shall terminate, effective immediately prior to the Effective Time, the Company Cap Plans in a manner (i) on directed by Parent and (ii) that complies with Section 409A of the five Code, which may include, without limitation, termination of any other plans that would be aggregated with the Company Cap Plans for purposes of the plan aggregation rules under Section 409A of the Code. (5g) trading days immediately preceding Prior to the Closing DateEffective Time, the Company, the Board of Directors of the Company and the Compensation Committee of the Board of Directors of the Company, as applicable, shall take all actions necessary to effectuate the provisions of this Section 1.5. (h) All of the conversions and adjustments made pursuant to this Section 1.5, including without limitation, the determination of the number of shares of Parent Common Stock subject to any award and the exercise price of the Adjusted Options, shall be made in a manner consistent with the requirements of Section 409A of the Code. As soon as practicable after the Effective Time, Parent shall prepare and file with the SEC a post-effective amendment converting the Form S-4 to a Form S-8 (or file such other appropriate form) registering a number of shares of Parent Common Stock necessary to fulfill Parent's obligations under this Section 1.5.

Stock Options and Other Stock-Based Awards. (a) Unless otherwise noted, the provisions of this Section 1.6 pertain to all plans sponsored by Target under which options and other stock-based amounts are awarded, including Target’s 2008 Equity Incentive Plan, 2003 Stock Option Plan, 2003 Recognition and Retention Plan and 1999 Stock Option Plan, all as amended, and the award agreements thereunder (collectively, the “Target Stock Plan”); provided, however, that any accelerated vesting performed pursuant to this Section 1.6 shall only be performed if required by the terms of the Target Stock Plan as in effect on the date hereof without any further action by Target. (b) Each stock option to purchase shares of Company Common issued under a Target Stock Plan (each, a “Company Target Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”)or pursuant to any individual equity compensation award agreement, whether vested or unvested, that is outstanding and unexercised immediately prior to before the Effective Time shallwill cease, as of at the Effective Time, automatically to represent a right to acquire shares of Target Common Stock and will be converted at the Effective Time, without any action on the part of the holder thereof, become fully vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Target Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Time for which, as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquirepurchase Buyer Common Stock (a “Converted Stock Option”), on the same terms and conditions as were applicable under such Company Target Stock Option (giving but subject to and taking into account any required acceleration of vesting of such Target Stock Option pursuant to the terms of the Target Stock Plan as in effect on the date hereof without any further action by Target). The number of shares of Buyer Common Stock subject to any terms and conditions resulting from the Transactions), each such Converted Stock Option will be equal to the number of shares of common stock of Parent, par value $.01 per share (“Parent Target Common Stock”)Stock subject to the applicable Target Stock Option multiplied by the Exchange Ratio, rounded down to the nearest whole shareshare of Buyer Common Stock, and such Converted Stock Option will have an exercise price per share (rounded up to the nearest cent) equal to the product per share exercise price specified in the applicable Target Stock Option divided by the Exchange Ratio, consistent with the requirements of Section 424(a) of the Code or Treasury Regulation Section 1.409A-1(b)(5)(v)(D), as applicable. (c) At the Effective Time, if the terms of the Target Stock Plan or the Target Restricted Stock Award so provide, each share of restricted Target Common Stock issued pursuant to the Target Stock Plan (“Target Restricted Stock”) that is outstanding immediately before the Effective Time shall vest in full and the restrictions thereon shall lapse, and, as of the Effective Time, each share of Target Common Stock that was formerly Target Restricted Stock shall be entitled to receive the Merger Consideration in accordance with Section 1.4; provided, however, that, upon the lapsing of restrictions with respect to each share of Target Restricted Stock, Target shall be entitled to deduct and withhold such amounts as may be required to be deducted and withheld under the Code and any applicable state or local Tax laws with respect to the lapsing of such restrictions. At the Effective Time, each award of Target Restricted Stock granted under the Target Stock Plan or pursuant to any individual equity compensation award agreement (a “Target Restricted Stock Award”) that is outstanding immediately before the Effective Time and that does not become vested pursuant to the preceding sentence will cease, at the Effective Time, to represent a right with respect to shares of Target Common Stock and will be converted at the Effective Time, without any action on the part of the holder of such Target Restricted Stock Award, to shares of Buyer Common Stock (each, a “Converted Restricted Stock Award”), on the same terms and conditions as were applicable under the Target Restricted Stock Award. The number of shares of Buyer Common Stock subject to each such Converted Restricted Stock Award will equal the number of shares of Company Target Common Stock subject to such Company the applicable Target Restricted Stock Option and Award multiplied by the Exchange Ratio (as defined below), at an exercise price per share of Parent Common StockRatio, rounded up to the nearest whole centshare of Buyer Common Stock. (d) At the Effective Time, Buyer will assume all the obligations of Target under the Target Stock Plan, each outstanding Converted Stock Option and Converted Restricted Stock Award and any agreements evidencing the grants thereof. As soon as practicable after the Effective Time, Buyer will deliver to the holders of Converted Stock Options and Converted Restricted Stock Awards any required notices setting forth such holders’ rights pursuant to the relevant Target Stock Plan and award documents and stating that such Converted Stock Options and Converted Restricted Stock Awards have been assumed by Buyer and will continue in effect on the same terms and conditions, subject to the adjustments required by this Section 1.6 after giving effect to the Merger and the terms of the relevant Target Stock Plan or individual agreements pursuant to which such awards were granted. (e) Following the Effective Time, Buyer may in its discretion maintain the Target Stock Plan in accordance with Nasdaq rules, except that (i) all equity or equity-based awards issued by Buyer pursuant to the Target Stock Plan following the Effective Time will be awards in respect of Buyer Common Stock, (ii) all references to Target (other than any references relating to a “change in control,” “change of control” or terms of similar import of Target) in each Target Stock Plan and in each award agreement thereunder will be deemed to refer to Buyer, unless Buyer determines otherwise, and (iii) the number of shares of Buyer Common Stock available for future issuance pursuant to each Target Stock Plan following the Effective Time (the “Available Target Stock Plan Shares”) will equal the number of shares of Target Common Stock so available immediately before the Effective Time multiplied by the Exchange Ratio, rounded to the nearest whole share of Buyer Common Stock. (f) Before the Effective Time, Target shall take all necessary action for the adjustment of Target Stock Options and Target Restricted Stock Awards under this Section 1.6. Before the Effective Time, Buyer shall reserve for future issuance a number of shares of Buyer Common Stock at least equal to the quotient obtained by dividing the aggregate exercise price for the number of shares of Company Buyer Common Stock that will be subject to such Company Converted Stock Option Options and Converted Restricted Stock Awards as a result of the actions contemplated by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company 1.6, plus the number of Available Target Stock Option to which Plan Shares in the event that Buyer maintains the Target Stock Plans as contemplated by Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively1.6(d). As soon as practicable following the Effective Time, Parent shall deliver Buyer will file a registration statement on Form S-8 (or other applicable form) with respect to the holders shares of Adjusted Buyer Common Stock subject to such Converted Stock Options appropriate notices setting forth such holders’ rights pursuant to and Converted Restricted Stock Awards and will maintain the respective Company Stock Plans and the agreements evidencing the grants effectiveness of such Adjusted Options, which shall provide, among other things, that registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such Adjusted Converted Stock Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Converted Restricted Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing DateAwards remain outstanding.

Stock Options and Other Stock-Based Awards. (a) Each As of the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each option to purchase shares of Company Republic Common Stock (each, a “Company Stock Option”) granted to employees or directors of Republic or any of its Subsidiaries under the employee and director stock plans any of the Company 1997 Stock Option Plan, 1998 Stock Option Plan, Voluntary Management Stock Accumulation Plan, Incentive Stock Plan and Second Amended and Restated Directors Compensation Plan, all as amended, and the award agreements thereunder (collectively, the “Company Stock Plans”), whether vested or unvested, "REPUBLIC STOCK PLANS") that is outstanding immediately prior to the Effective Time shall(collectively, the "REPUBLIC OPTIONS") shall be converted into an option (an "ADJUSTED OPTION") to purchase, on the same terms and conditions as applied to each such Republic Option immediately prior to the Effective Time (taking into account any accelerated vesting of such Republic Options in accordance with the terms thereof, including terms approved by the Republic board prior to the date of this Agreement as described on Section 1.6(a) of the Republic Disclosure Schedule (as defined in Article III of this Agreement)), the number of whole shares of Citizens Common Stock that is equal to the number of shares of Republic Common Stock subject to such Republic Option immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share), at an exercise price per share of Citizens Common Stock (rounded up to the nearest whole cent) equal to the exercise price for each such share of Republic Common Stock subject to such Republic Option immediately prior to the Effective Time divided by the Exchange Ratio. (b) As of the Effective Time, automatically each share of Republic Common Stock granted to any employee or director of Republic or any of its Subsidiaries under a Republic Stock Plan that is outstanding and subject to restrictions at the Effective Time (collectively, the "REPUBLIC RESTRICTED SHARES") shall, by virtue of the Merger and without any action on the part of the holder thereof, become fully vested be converted into the right to receive, on the same terms and exercisable. With conditions as applied to each such Republic Restricted Share immediately prior to the Effective Time (including the same transfer restrictions), the number of whole shares of Citizens Common Stock that is equal to the number of shares of Republic Common Stock subject to such Republic Restricted Share immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share) (the "CITIZENS RESTRICTED SHARE RIGHT"); PROVIDED, HOWEVER, that, upon the lapsing of restrictions with respect to each such Company Stock Options: (i) each Company Stock Option for whichCitizens Restricted Share Right in accordance with the terms applicable to the corresponding Republic Restricted Share as in effect immediately prior to the Effective Time, Citizens shall be entitled to deduct and withhold from the Citizens Restricted Share Right such amounts as may be required to be deducted and withheld under the Code and any applicable state or local tax law with respect to the lapsing of such restrictions. Notwithstanding the foregoing, any Republic Restricted Share that is not subject to transfer restrictions as of the Effective Time, based on actions taken by the Republic board prior to the date of this Agreement (as described on Section 1.6(b) of the Republic Disclosure Schedule), shall be converted into the right to receive the Merger Consideration exceeds (less applicable withholding) determined in accordance with Sections 1.4 and 1.5 of this Agreement based on the exercise price per Share shall be canceled at holder's election in accordance with Section 2.1 of this Agreement, and treating such Republic Restricted Shares in the Effective Time and, in exchange therefor, each former holder same manner as all other shares of Republic Common Stock for such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three purposes. (3c) business days following As of the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law each warrant with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Republic Common Stock subject granted to such Company any employee or director of Republic or any of its Subsidiaries under a Republic Stock Option; and (ii) each Company Stock Option Plan that is outstanding immediately prior to the Effective Time for which(collectively, as the "REPUBLIC WARRANTS") shall, by virtue of the Effective TimeMerger and without any action on the part of the holder thereof, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option a warrant to acquirepurchase, on the same terms and conditions as were applicable under applied to each such Company Stock Option Republic Warrant immediately prior to the Effective Time (giving effect taking into account any accelerated vesting of such Republic Warrants in accordance with the terms thereof, including terms approved by the Republic board prior to any terms and conditions resulting from the Transactionsdate of this Agreement, as described on Section 1.6(c) of the Republic Disclosure Schedule), the number of whole shares of common stock Citizens Common Stock that is equal to the number of Parent, par value $.01 per share shares of Republic Common Stock subject to such Republic Warrant immediately prior to the Effective Time multiplied by the Exchange Ratio (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Citizens Common Stock, Stock (rounded up to the nearest whole cent, ) equal to the quotient obtained by dividing the aggregate exercise price for the shares each such share of Company Republic Common Stock subject to such Company Stock Option Republic Warrant immediately prior to the Effective Time divided by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”each a "CITIZENS WARRANT"). The adjustments provided in this Section 2.4(a)(ii. (d) with respect to any Company Stock Option to which Section 409A or 421 (a) As of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent Citizens shall deliver assume the obligations and succeed to the holders rights of Adjusted Options appropriate notices setting forth such holders’ rights pursuant Republic under the Republic Stock Plans with respect to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which the Citizens Restricted Share Rights and the Citizens Warrants. Republic and Citizens agree that prior to the Effective Time each of the Republic Stock Plans shall providebe amended, among to the extent possible without requiring shareholder approval of such amendments, (i) if and to the extent necessary and practicable, to reflect the transactions contemplated by this Agreement, including, but not limited to, the conversion of Republic Options, Republic Restricted Shares, Republic Warrants granted to any employee or director of Republic or any of its Subsidiaries under a Republic Stock Plan that is outstanding immediately prior to the Effective Time pursuant to paragraphs (a), (b) and (c) above and the substitution of Citizens for Republic thereunder to the extent appropriate to effectuate the assumption of such Republic Stock Plans by Citizens and (ii) to preclude any automatic or formulaic grant of options, restricted shares or other thingsawards thereunder on or after the date hereof. From and after the Effective Time, that such all references to Republic (other than any references relating to a "change in control" of Republic) in each Republic Stock Plan and in each agreement evidencing any award of Republic Options or Republic Restricted Shares shall be deemed to refer to Citizens, unless Citizens determines otherwise. (e) Citizens shall take all action reasonably necessary or appropriate to have available for issuance or transfer a sufficient number of shares of Citizens Common Stock for delivery upon exercise of the Adjusted Options and agreements have been assumed by Parent and shall continue in effect on or settlement of the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions)Citizens Warrants. For purposes Within two Business Days of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date, Citizens shall file with the SEC a registration statement on Form S-8 (or other appropriate form) registering a number of shares of Citizens Common Stock necessary to fulfill Citizens's obligations under this Section 1.6.

Stock Options and Other Stock-Based Awards. (a) Each As of the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each option to purchase shares of Company Hibernia Common Stock (each, a “Company Stock Option”) granted to employees or directors of Hibernia or any of its Subsidiaries under the employee and director stock plans any of the Company 1987 Stock Option Plan, the Long Term Incentive Plan, the 1993 Directors’ Stock Option Plan, the 2001 Nonqualified Stock Option Plan and the 2003 Long-Term Incentive Compensation Plan of Hibernia (collectively, the “Company Hibernia Stock Plans”), whether vested or unvested, ) that is outstanding immediately prior to the Effective Time shall(collectively, the “Hibernia Options”) shall be converted into an option (an “Adjusted Option”) to purchase, on the same terms and conditions as applied to each such Hibernia Option immediately prior to the Effective Time (taking into account any accelerated vesting of such Hibernia Options in accordance with the terms thereof), the number of whole shares of Capital One Common Stock that is equal to the number of shares of Hibernia Common Stock subject to such Hibernia Option immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share), at an exercise price per share of Capital One Common Stock (rounded up to the nearest whole pxxxx) equal to the exercise price for each such share of Hibernia Common Stock subject to such Hibernia Option immediately prior to the Effective Time divided by the Exchange Ratio. (b) As of the Effective Time, automatically each restricted share of Hibernia Common Stock granted to any employee or director of Hibernia or any of its Subsidiaries under a Hibernia Stock Plan that is outstanding immediately prior to the Effective Time (collectively, the “Hibernia Restricted Shares”) shall, by virtue of the Merger and without any action on the part of the holder thereof, become fully vested be cancelled and exercisable. With converted into the right to receive (the “Capital One Restricted Share Right”), on the same terms and conditions as applied to each such Hibernia Restricted Share immediately prior to the Effective Time (including the same transfer restrictions), the Merger Consideration determined in accordance with Sections 1.4 and 1.5 of this Agreement based on the holder’s election in accordance with Section 2.1 of this Agreement, and treating such Hibernia Restricted Shares in the same manner as all other shares of Hibernia Common Stock for such purposes; provided, however, that, upon the lapsing of restrictions with respect to each such Company Stock Options:Capital One Restricted Share Right in accordance with the terms applicable to the corresponding Hibernia Restricted Share immediately prior to the Effective Time, Capital One shall be entitled to deduct and withhold such amounts as may be required to be deducted and withheld under the Code and any applicable state or local tax law with respect to the lapsing of such restrictions. (i) each Company Stock Option for which, as As of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law restricted share unit with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Hibernia Common Stock subject granted to such Company any employee or director of Hibernia or any of its Subsidiaries under a Hibernia Stock Option; and (ii) each Company Stock Option Plan that is outstanding immediately prior to the Effective Time for which(collectively, as the “Hibernia RSUs”) shall, by virtue of the Effective TimeMerger and without any action on the part of the holder thereof, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquirea restricted share unit, on the same terms and conditions as were applicable under applied to each such Company Stock Option Hibernia RSU immediately prior to the Effective Time (giving effect to taking into account any accelerated vesting of such Hibernia RSU in accordance with the terms and conditions resulting from the Transactionsthereof), with respect to the number of shares of common stock Capital One Common Stock that is equal to the number of Parent, par value $.01 per share shares of Hibernia Common Stock subject to the Hibernia RSU immediately prior to the Effective Time multiplied by the Exchange Ratio (“Parent Common Stock”), rounded down to the nearest whole share) (a “Capital One RSU”). (ii) As of the Effective Time, each phantom share of Hibernia Common Stock credited immediately prior to the Effective Time to the book entry account of a participant in the Supplemental Stock Compensation Plan for Key Management Employees (such plan, the “Supplemental Stock Plan”) shall, by virtue of the Merger and without any action on the part of such participant, be converted into a book entry account number under the Supplemental Stock Plan of a number of shares of Capital One Common Stock equal to the product of the number of shares of Company Hibernia Common Stock subject credited to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up book entry account immediately prior to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option Effective Time multiplied by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”rounded down to the nearest whole share). The adjustments provided in this Section 2.4(a)(ii. (d) with respect to any Company Stock Option to which Section 409A or 421 (a) As of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent Capital One shall deliver assume the obligations and succeed to the holders rights of Adjusted Options appropriate notices setting forth such holders’ rights pursuant Hibernia under the Hibernia Stock Plans with respect to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which the Capital One RSUs and Capital One Restricted Share Rights. Hibernia and Capital One agree that prior to the Effective Time each of the Hibernia Stock Plans shall providebe amended, among to the extent possible without requiring stockholder approval of such amendments, (i) if and to the extent necessary and practicable, to reflect the transactions contemplated by this Agreement, including, but not limited to, the conversion of the Hibernia Options, Hibernia Restricted Shares and Hibernia RSUs pursuant to paragraphs (a), (b) and (c) above and the substitution of Capital One for Hibernia thereunder to the extent appropriate to effectuate the assumption of such Hibernia Stock Plans by Capital One and (ii) to preclude any automatic or formulaic grant of options, restricted shares or other thingsawards thereunder on or after the date hereof, that such except as permitted under Section 5.2(b)(iii). From and after the Effective Time, all references to Hibernia (other than any references relating to a “Change in Control” of Hibernia) in each Hibernia Stock Plan and in each agreement evidencing any award of Hibernia Options or Hibernia Restricted Shares shall be deemed to refer to Capital One, unless Capital One determines otherwise. (e) Capital One shall take all action necessary or appropriate to have available for issuance or transfer a sufficient number of shares of Capital One Common Stock for delivery upon exercise of the Adjusted Options or settlement of the Capital One RSUs. Promptly after the Effective Time, Capital One shall prepare and agreements have been assumed by Parent and shall continue in effect file with the SEC a registration statement on the same terms and conditions Form S-8 (subject to the adjustments required by this Section 2.4(a)(iior other appropriate form) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes registering a number of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price shares of Parent Capital One Common Stock on the New York Stock Exchange necessary to fulfill Capital One’s obligations under this paragraph (the “NYSE”) on the five (5) trading days immediately preceding the Closing Datee).

Stock Options and Other Stock-Based Awards. (ai) Each Except as otherwise agreed in writing by Parent and the applicable holder thereof, each option or other award to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the Company Stock Plans or any other employee and or director stock equity plans of the Company (excluding the “Company Stock Plans”ESPP), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect be converted into the right to receive at the Effective Time an amount equal to the product of (A) the total number of shares of Company Common Stock subject to such Company Stock Options: Option and (iB) each Company Stock Option for whichthe excess, as if any, of the Effective Time, the Merger Consideration exceeds over the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder share of Company Common Stock subject to such Company Stock Option shall be entitled (or if there is not any such excess, zero), with the aggregate amount of such payment rounded to receive, the nearest cent (the aggregate amount of such cash hereinafter referred to as soon as practicable, but in no event later than three (3the “Option Consideration”) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, U.S. state or local or foreign Tax Law with respect to the making of such payment. (ii) equal Except as otherwise agreed in writing by Parent and the applicable holder thereof, immediately prior to the product Effective Time, each award of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of restricted shares of Company Common Stock subject (the “Restricted Shares”) shall be converted into an obligation of Parent to pay (or cause to be paid) and a right of the holder thereof to receive with respect to each Restricted Share, in full satisfaction of any rights in respect thereof, the Merger Consideration as provided in Section 2.1(a) at the time or times such Company Stock Option; and (ii) each Company Stock Option that is outstanding Restricted Share would otherwise vest according to its terms in effect as of immediately prior to the Effective Time for which(and, as in the case of an award subject to one or more performance-based vesting conditions, at the Effective Timefirst time following the Closing Date that the applicable Restricted Share would first become eligible to vest according to its terms, with the applicable performance-based vesting conditions at such time assumed to be satisfied at target level of attainment (i.e., the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option level of attainment at which 100% of such Restricted Shares first eligible to acquirevest at such time would vest), on with the same terms and conditions as were applicable under to such Company Stock Option award as of immediately prior to the Effective Time (giving effect except as otherwise provided in this Section 5.5(a)(ii)) otherwise continuing to apply to such award immediately after the Effective Time, except that any terms and conditions resulting from provision that would accelerate vesting upon any termination of employment following a Change of Control shall be modified, effective as of immediately after the TransactionsEffective Time, to provide for acceleration upon consummation of a Change of Control (it being understood that the transactions contemplated hereby do not constitute a Change of Control). (iii) With respect to the Company’s ESPP, (A) as soon as practicable following the date hereof, the number Company shall take such actions as may be required to provide that no “Offering Period” under the ESPP shall be commenced after the date hereof, (B) if the Closing Date occurs during the current Offering Period, the Closing Date shall be the last day of shares such “Offering Period” and the “Purchase Date” under the ESPP, with each ESPP participant’s option for such Offering Period shall be exercised as of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to such Purchase Date in accordance with the nearest whole share, equal to the product terms of the number ESPP, all payroll deductions under the ESPP to cease as of such Purchase Date and all shares of Company Common Stock subject acquired under the ESPP on such Purchase Date to such Company Stock Option and the Exchange Ratio (receive Merger Consideration as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii2.1(a) with respect and (C) the Company shall take such actions as are necessary to any Company Stock Option to which Section 409A or 421 (a) ensure that the ESPP shall, effective and contingent upon Closing, be terminated as of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date. (iv) All amounts payable pursuant to this Section 5.5 shall be paid without interest. Any payments made pursuant to this Section 5.5 shall be reduced by all applicable withholding Taxes that shall be required to be deducted and withheld from such payments under the Code or any applicable Laws. To the extent that amounts are so deducted and withheld, such amounts shall be treated for all purposes of this Agreement as having been paid in respect of which such deduction and withholding was made. (v) The Board of Directors of the Company (or the applicable committee of the Board of Directors of the Company) shall make such adjustments and amendments to or make such determinations with respect to Company Stock Plans, Company Stock Options, Restricted Shares, the ESPP and any other Company Benefit Plans to the extent necessary to implement the foregoing provisions of this Section 5.5.

Stock Options and Other Stock-Based Awards. (a) Each option to purchase shares of The Company Common Stock (each, a “shall procure that each Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding and unexercised immediately prior to the Effective Time shall, as of the Effective Time, automatically Time and without any action on in accordance with the part terms of the holder thereof, become fully vested and exercisable. With respect to such relevant Existing Company Stock Options: (i) each Company Stock Option for which, as Incentive Plan or otherwise with the written agreement of the Effective Timerelevant holders, be cancelled and converted into the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled right to receive, receive as soon as practicable, but in no event later than three (3) business days practicable following the Effective Time, an amount in cash (without interestin U.S. dollars, and less such amounts as are required to be withheld or deducted under the Code or any provision of stateif any, local or foreign Law with respect to the making of such payment) equal to the product of (1x) the total number of Company Ordinary Shares subject to such Company Stock Option multiplied by (y) the excess, if any, of the amount of the Merger Consideration over the exercise price per Company Ordinary Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Stock Option; and , with the aggregate amount of such payment rounded down to the nearest cent (ii) each the aggregate amount of such cash, the “Option Consideration”). If necessary to effect the treatment of the Company Stock Options set forth in this Section 3.3(a), the Company shall cause the Company Stock Options to become fully vested and exercisable at such time as will permit the holder thereof to exercise such Company Stock Option prior to the Effective Time. (b) The Company shall procure that each Company Stock-Based Award, whether vested or unvested, which is outstanding immediately prior to the Effective Time for whichshall be cancelled and converted into the right to receive, as soon as practicable following the Effective Time (or such later date as is required to comply with Section 409A of the Code) and in accordance with the terms of the relevant Existing Company Incentive Plan or otherwise with the written agreement of the relevant holders, an amount in cash equal to the Merger Consideration in respect of each Company Ordinary Share underlying a particular Company Stock-Based Award, with the number of such shares determined at the “target” level of performance in the case of any Company Stock-Based Award which is subject to performance vesting criteria, (the aggregate amount of such cash, together with the Option Consideration, “Option and Stock-Based Consideration”). (c) The Company shall take all necessary and appropriate action so that (i) the current offering period under the Company’s 2000 Employee Share Purchase Plan (the “ESPP”) will be the final offering period under the ESPP, (ii) each option issued pursuant to the ESPP shall be fully exercised not later than five (5) Business Days prior to the Effective Time and (iii) the ESPP shall terminate as of the Effective Time, in each case in accordance with the Merger Consideration does terms of the ESPP. (d) In furtherance and not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactionsin limitation of Section 3.3(c), the number Company shall terminate any and all equity-based plans maintained by the Company or any of shares of common stock of Parentits Subsidiaries, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (effective as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time. (e) The Company shall provide Parent evidence of the completion of the actions set out in Section 3.3(c) and Section 3.3(d), Parent shall deliver to the holders form and substance of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and be reasonably satisfactory to Parent. (f) The Company shall continue in effect on take all actions reasonably necessary to effectuate the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes provisions of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date3.3.

Stock Options and Other Stock-Based Awards. (ai) Each option to purchase shares of Company Common Stock (each, a “"Company Stock Option”") granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect be converted into the right to receive at the Effective Time an amount in cash in U.S. dollars equal to the product of (x) the total number of shares of Company Common Stock subject to such Company Stock Options: Option and (iy) each Company Stock Option for whichthe excess, as if any, of the Effective Time, amount of the Merger Consideration exceeds over the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder share of Company Common Stock subject to such Company Stock Option, with the aggregate amount of such payment rounded to the nearest cent (the aggregate amount of such cash hereinafter referred to as the "Option shall be entitled to receive, as soon as practicable, but in no event later than three (3Consideration") business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Tax Law with respect to the making of such payment. (ii) equal At the Effective Time, each right of any kind, contingent or accrued, to receive shares of Company Common Stock or benefits measured in whole or in part by the product value of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the a number of shares of Company Common Stock subject to such granted under the Company Stock Option; and Plans or Company Benefit Plans (ii) each including restricted stock units, phantom units, deferred stock units and dividend equivalents), other than Restricted Shares and Company Stock Option that Options (each, other than Restricted Shares and Company Stock Options, a "Company Stock-Based Award"), whether vested or unvested, which is outstanding immediately prior to the Effective Time for whichshall cease to represent a right or award with respect to shares of Company Common Stock, shall become fully vested and shall entitle the holder thereof to receive, at the Effective Time an amount in cash equal to the Merger Consideration in respect of each Share underlying a particular Company Stock-Based Award (the aggregate amount of such cash, together with the Option Consideration, hereinafter referred to as the "Option and Stock-Based Consideration") less such amounts as are required to be withheld or deducted under the Code or any provision of Tax Law with respect to the making of such payment. (iii) Immediately prior to the Effective Time, each award of restricted Company Common Stock (the "Restricted Shares") shall vest in full and be converted into the right to receive the Merger Consideration as provided in Section 2.1(a), less such amounts as are required to be withheld or deducted under the Code or any provision of Tax Law with respect to the making of such payment. (iv) The Compensation Committee of the Board of Directors of the Company shall make such amendments to or make such determinations with respect to Company Stock Options, Company Stock-Based Awards and Restricted Shares to implement the foregoing provisions of this Section 5.5. (v) From and after the date hereof and prior to the Termination Date, the Company shall deposit all proceeds received by the Company from the exercise of Company Stock Options into a segregated account (the “Option Proceeds Account”). At or prior to the Effective Time, the Merger Consideration does not exceed Company shall deposit with the exercise price per Share shall be amended and converted into an option to acquire, on Paying Agent in cash all amounts held in the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing DateProceeds Account.

Stock Options and Other Stock-Based Awards. (a) Each Immediately prior to the Effective Time, each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans to employees or directors of the Company or any of its Subsidiaries under the Company’s Stock Incentive Plan or Director’s Omnibus Long-term Incentive Plan (the “Company Stock Plans”), ) that is outstanding and unexercised as of the Effective Time (whether vested or unvested) (collectively, that is outstanding immediately prior the “Company Options”) shall be canceled, and the holder thereof shall be entitled to the Effective Time shall, as of receive at the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, or as soon as practicablepracticable thereafter, but from the Surviving Corporation, in no event later than three (3) business days following the Effective Timeconsideration for such cancellation, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2A) the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time and (B) the excess, if any, of the Per Share Amount over the exercise price per share of Company Common Stock Option; andof such Company Option immediately prior to the Effective Time, less any required withholding taxes. (iib) As of the Effective Time, each performance share award granted to any employee of the Company Stock Option or any of its Subsidiaries under the Company’s Performance Share Program that is outstanding immediately prior to the Effective Time for whichshall, as by virtue of the Merger and without any action on the part of the holder thereof, be cancelled and converted into the right to receive at the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into or as soon as practicable thereafter, an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, amount in cash equal to the product of (A) the number Per Share Amount, multiplied by (B) the greater of (i) 100% of the Target Performance Shares (as defined in such Performance Share Program) relating to Performance Cycles (as defined in such Performance Share Program) in effect as of the Effective Time plus accumulated dividends, if any, on such shares as determined in accordance with such Performance Share Program and (ii) 100% of the Performance Shares (as defined in such Performance Share Program) relating to Performance Cycles in effect as of the Effective Time based on performance calculated through the quarter ending immediately prior to the Effective Time plus accumulated dividends, if any, on such shares as determined in accordance with such Performance Share Program, subject to such deducting and withholding as may be required under the Code and any applicable state or local tax law with respect to such payment. (c) Immediately prior to the Effective Time, all restricted stock awards granted under the Company Stock Plans shall vest in full so as to no longer be subject to any forfeiture or vesting requirements, and all such shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For considered outstanding shares for all purposes of this Section 2.4(a)(ii)Agreement, “Exchange Ratio” shall mean including, without limitation, for purposes of the right to receive the Forms of Election and to make elections and receive the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Datewith respect thereto.

Stock Options and Other Stock-Based Awards. (ai) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder holders thereof, become fully be converted into a vested and exercisable. With respect option to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of purchase shares of Company Parent Common Stock subject to such Company (a “Parent Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Time for which, as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire”), on the same terms and conditions (except as provided in this Section 5.6(a)(i)) as were applicable under such Company Stock Option (giving effect immediately prior to any terms and conditions resulting from the Transactions)Effective Time, the to purchase that number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, Stock equal to the product of (A) the total number of shares of Company Common Stock subject to such Company Stock Option and (B) the Exchange Ratio Ratio, rounded down to the nearest whole number of shares of Parent Common Stock. The per-share exercise price for the shares of Parent Common Stock issuable upon exercise of such Parent Stock Options will be equal to the quotient determined by dividing (as defined below), at an x) the exercise price per share of Parent Company Common StockStock at which the Company Stock Options were exercisable immediately prior to the Effective Time by (y) the Exchange Ratio, rounded and rounding the resulting per-share exercise price up to the nearest whole cent. Solely with respect to a Company Stock Option granted with an exercise price of less than $40.00 per share of Company Common Stock (which shall have been converted into a Parent Stock Option pursuant to the terms of this Section 5.6(a)(i)), the terms of such Parent Stock Option (as so converted) shall provide that if the employment of the applicable option holder is terminated under circumstances that would entitle such option holder to severance benefits under a severance plan, program or agreement in which such option holder participates (or to which such option holder is a party) as of immediately following the Effective Time (a “Severance Event”) during the period beginning at the Effective Time and ending on the second anniversary thereof, such Parent Stock Option shall remain exercisable until the earlier of (1) the later of (x) the third anniversary of the date of such termination of employment and (y) the date on which the Company Stock Option (which shall have been converted into a Parent Stock Option pursuant to the terms hereof) would cease to be exercisable in accordance with its terms and (2) the expiration of the scheduled term of the Company Stock Option (which shall have been converted into a Parent Stock Option pursuant to the terms hereof). No later than the Effective Time, the Company shall pass such resolutions as are necessary to approve the terms of this Section 5.6(a)(i). (ii) At the Effective Time, each award of restricted Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (the “Restricted Shares”) and each restricted or deferred stock unit based on shares of Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (the “Restricted Stock Units”) shall, automatically and without any action on the part of the holders thereof, vest and be converted, on the same terms and conditions (except as provided in this Section 5.6(a)(ii)) as were applicable under such Restricted Shares and Restricted Stock Units, as applicable, immediately prior to the Effective Time, into a number of shares of Parent Common Stock or units with respect to Parent Common Stock equal to the quotient obtained by dividing product of (A) the aggregate exercise price for total number of shares of Company Common Stock subject to such grant of Restricted Shares or Restricted Stock Units, as applicable, and (B) the Exchange Ratio. (iii) Immediately prior to the Effective Time, each award of performance units with respect to shares of Company Common Stock under a Company Stock Plan that is outstanding immediately prior to the Effective Time (collectively, the “Company Performance Units”) shall, automatically and without any action on the part of the holders thereof, vest and be converted, into the right to receive, immediately prior to the Effective Time, an amount in cash equal to the product of (i) the total number of shares of Company Common Stock subject to such Company Performance Unit, assuming the achievement of all performance goals applicable to such Company Performance Unit at target levels and (ii) the Fair Market Value (as defined in the Amended and Restated Centex Corporation 2003 Equity Incentive Plan) of Company Common Stock Option by on the Exchange Ratio day immediately prior to the Effective Time. (eachiv) At the Effective Time, as so adjustedParent shall assume all the obligations of the Company under the Company Stock Plans, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any each outstanding Company Stock Option to which Section 409A or 421 (a) of and the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of agreements evidencing the Code, respectivelygrants thereof. As soon as practicable following after the Effective Time, Parent shall deliver to the holders of Adjusted Company Stock Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans Plans, and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Company Stock Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii5.6(a)). (v) after giving effect Parent shall take all corporate action necessary to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes reserve for issuance a sufficient number of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price shares of Parent Common Stock for delivery upon exercise of the Parent Stock Options resulting from the conversion of Company Stock Options assumed by Parent in accordance with this Section 5.6(a). At or prior to the Effective Time, Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form) with respect to the New York shares of Parent Common Stock Exchange subject to such Parent Stock Options resulting from the conversion of Company Stock Options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the “NYSE”current status of the prospectus or prospectuses contained therein) on the five (5) trading days immediately preceding the Closing Datefor so long as such Parent Stock Options remain outstanding.

Stock Options and Other Stock-Based Awards. (ai) Each Except as otherwise agreed in writing by Parent and the applicable holder thereof, each option or other award to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the any employee and or director stock equity plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect be converted into the right to receive within three Business Days following the Effective Time an amount in cash in U.S. dollars equal to the product of (x) the total number of shares of Company Common Stock subject to such Company Stock Options: Option and (iy) each Company Stock Option for whichthe excess, as if any, of the Effective Time, amount of the Merger Consideration exceeds over the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder share of Company Common Stock subject to such Company Stock Option shall be entitled (or if there is not any such excess, zero) with the aggregate amount of such payment rounded to receive, the nearest cent (the aggregate amount of such cash hereinafter referred to as soon as practicable, but in no event later than three (3the “Option Consideration”) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of U.S., state, local or foreign Tax Law with respect to the making of such payment. (ii) equal Except as otherwise agreed in writing by Parent and the applicable holder thereof, at the Effective Time, each right of any kind, contingent or accrued, to receive shares of Company Common Stock or benefits measured in whole or in part by the product value of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the a number of shares of Company Common Stock subject to such granted under the Company Stock Option; and Plans or Company Benefit Plans (ii) each including performance shares, restricted stock, restricted stock units, phantom units, deferred stock units and dividend equivalents), other than Restricted Shares (as hereinafter defined), shares acquired by participants pursuant to the terms of the Company’s Employee Stock Purchase Plan and the Company’s Foreign Subsidiary Employees Stock Purchase Plan, and Company Stock Option that Options (each, other than Restricted Shares, Purchase Plan Shares and Company Stock Options, a “Company Stock-Based Award”), whether vested or unvested, which is outstanding immediately prior to the Effective Time for whichshall cease to represent a right or award with respect to shares of Company Common Stock, shall become fully vested and shall entitle the holder thereof to receive, at the Effective Time an amount in cash equal to the Merger Consideration in respect of each Share underlying a particular Company Stock-Based Award (the aggregate amount of such cash, together with the Option Consideration, hereinafter referred to as the “Option and Stock-Based Consideration”) less such amounts as are required to be withheld or deducted under the Code or any provision of U.S., state, local or foreign Tax Law with respect to the making of such payment. (iii) Except as otherwise agreed in writing by Parent and the applicable holder thereof, immediately prior to the Effective Time, each award of restricted Company Common Stock (the “Restricted Shares”) shall vest in full and be converted into the right to receive the Merger Consideration as provided in Section 2.1(a). (iv) At the Effective Time, the Merger Consideration does not exceed Company’s Employees Stock Purchase Plan and the exercise price per Share Company’s Foreign Subsidiary Employees Stock Purchase Plan (the “Stock Purchase Plans”) shall terminate. In connection with such termination, the Company shall refund to the participants in the Stock Purchase Plans any accumulated payroll deductions in respect of any purchase period ending after the Effective Time. The participants in the Stock Purchase Plans shall be amended and converted into an option entitled to acquire, on the same terms and conditions as were applicable under such continue to make purchases of Company Common Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down pursuant to the nearest whole share, equal terms of the Stock Purchase Plans for any purchase period ending prior to the product of the number of Effective Time and such shares of Company Common Stock subject shall be converted into the right to such Company Stock Option and receive the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”Merger Consideration in accordance with Section 2.1(a). The adjustments provided After the date hereof, no participant in this Section 2.4(a)(iithe Company's Foreign Subsidiary Employees Stock Purchase Plan may increase the percentage amount of his or her payroll deduction election from those in effect on the date hereof. (v) with respect Prior to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent the Compensation Committee of the Board of Directors of the Company, or the Board of Directors of the Company, as appropriate, shall deliver make such adjustments and amendments to, make such determinations or take such actions with respect to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Plans, Company Stock Options, which shall provideCompany Benefit Plans, among other thingsCompany Stock-Based Awards, that such Adjusted Options Restricted Shares and agreements have been assumed by Parent and shall continue in effect on Purchase Plan Shares, including obtaining consents where necessary, to implement the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes foregoing provisions of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date5.5.

Stock Options and Other Stock-Based Awards. (ai) Each option to purchase shares of Company Common Stock granted under the Company Stock Plans (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect be converted into the right to receive at the Effective Time an amount in cash in U.S. dollars equal to the product of (x) the total number of shares of Company Common Stock subject to such Company Stock Options: Option and (iy) each Company Stock Option for whichthe excess, as if any, of the Effective Time, amount of the Merger Consideration exceeds over the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder share of Company Common Stock subject to such Company Stock Option, with the aggregate amount of such payment rounded down to the nearest cent (the aggregate amount of such cash hereinafter referred to as the “Option shall be entitled to receive, as soon as practicable, but in no event later than three (3Consideration”) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, U.S. state or local or foreign Tax Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Stock Option; and. (ii) At the Effective Time, each Company Equity Award granted under the Company Stock Option that Plans, other than Company Stock Options (each, other than Company Stock Options, a “Company Stock-Based Award”), whether vested or unvested, which is outstanding immediately prior to the Effective Time for whichshall cease to represent a right or award with respect to shares of Company Common Stock, as of shall become fully vested and shall entitle the holder thereof to receive, at the Effective Time, an amount in cash equal to the Merger Consideration does not exceed in respect of each Share underlying a particular Company Stock-Based Award (the exercise price per Share shall aggregate amount of such cash, together with the Option Consideration, hereinafter referred to as the “Option and Stock-Based Consideration”) less such amounts as are required to be amended and converted into an option withheld or deducted under the Code or any provision of U.S. state or local Tax Law with respect to acquire, the making of such payment. (iii) For Company Stock-Based Awards that vest in whole or in part based on the same terms and conditions as were applicable under such Company Stock Option (giving effect achievement of performance goals, the level of performance goal achievement used to any terms and conditions resulting from the Transactions), determine the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Shares underlying the Company Stock”), rounded down to -Based Award for purposes hereof shall be determined by the nearest whole share, equal to the product Compensation Committee of the number Board of shares Directors consistent with the terms of the applicable award agreement. (iv) The Compensation Committee of the Board of Directors of the Company Common Stock subject shall make such adjustments and amendments to or make such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) determinations with respect to any Company Stock Option Options and Company Stock-Based Awards to which implement the foregoing provisions of this Section 409A or 421 5.5(a). (av) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following At the Effective Time, Parent shall deliver shall, to the extent sufficient funds are not available at the Company, deposit the Option and Stock-Based Consideration (or funds sufficient to make up any shortfall) with the Company for the benefit of the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and Company Stock-Based Awards and the agreements evidencing Surviving Corporation shall (and Parent shall cause the grants of Surviving Corporation to) pay the Option and Stock-Based Consideration to such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue holders as promptly as practicable (but in effect on no event later than three (3) business days) following the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing DateEffective Time.

Stock Options and Other Stock-Based Awards. At the Merger Effective Time: (a) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Stock Option; and (ii) each Company General Stock Option that is outstanding immediately prior to the Merger Effective Time for whichshall become, as of the Merger Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option (a “General Exchange Option”) to acquirepurchase, on the same terms and conditions (including applicable vesting requirements) as were applicable under applied to each such Company General Stock Option (giving effect immediately prior to any terms and conditions resulting from the Transactions)Merger Effective Time, the number of shares of common stock of Parent, par value $.01 per share (“Parent General Voting Common Stock”), rounded down to the nearest whole share, Stock that is equal to the product of the number of shares of Company General Class A Common Stock subject to such Company General Stock Option and immediately prior to the Exchange Ratio (as defined below)Merger Effective Time, at an exercise price per share of Parent General Voting Common Stock, rounded up to the nearest whole cent, Stock equal to the quotient obtained by dividing the aggregate exercise price for the shares each such share of Company General Class A Common Stock subject to such Company General Stock Option immediately prior to the Merger Effective Time (including applicable vesting, exercise and expiration provisions); and (b) each share of General Restricted Stock and each right of any kind, contingent or accrued, to receive shares of General Class A Common Stock or benefits measured in whole or in part by the Exchange Ratio value of a number of shares of General Class A Common Stock granted by General outstanding immediately prior to the Merger Effective Time (including General DSUs, restricted stock units, phantom units, deferred stock units, stock equivalents and dividend equivalents), other than General Stock Options (each, as so adjustedother than General Stock Options, an a “Adjusted OptionGeneral Stock-Based Award”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) , shall become, as of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Merger Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Optionsan award, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (including applicable vesting requirements and deferral provisions) as applied to each such General Stock-Based Award immediately prior to the Merger Effective Time, with respect to the number of shares of General Voting Common Stock that is equal to the number of shares of General Class A Common Stock subject to the adjustments required by this Section 2.4(a)(ii) after giving effect General Stock-Based Award immediately prior to the Merger and giving effect to any terms and conditions resulting from the TransactionsEffective Time (a “General Exchange Stock-Based Award”). For purposes the avoidance of this Section 2.4(a)(ii)doubt, “Exchange Ratio” shall mean shares of General Class A Common Stock issued in connection with the settlement of General Stock-Based Awards which vest on or prior to the Merger Consideration divided by Effective Time (including vested General Restricted Stock) shall be treated in the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Datemanner set forth in Section 5(a).

Stock Options and Other Stock-Based Awards. (a) Each Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee 2001 Stock Option Plan of the Company and director stock plans the 2006 Incentive Award Plan of the Company (collectively, the “Company Stock Plans”), regardless of whether vested or unvestednot vested, that is outstanding immediately prior to the Effective Time shall(collectively, the “Company Options”) shall be cancelled and shall entitle the holder thereof to the right to receive as soon as reasonably practicable following the Effective Time (and in any event prior to the third business day after the later of (i) the Closing Date and (ii) the date on which the holder of the Company Option in question executes and delivers a Holder Acknowledgement as provided in Section 2.3, but in each case no later than the expiration of the original term of such Company Option), a lump sum cash payment, without interest, equal to the Option Consideration applicable to such holder’s Company Option, as of determined pursuant to Section 1.7. (b) Immediately prior to the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With each stock appreciation right with respect to such shares of Company Common Stock granted under a Company Stock Options: (i) each Company Stock Option for whichPlan, as regardless of the Effective Timewhether or not vested, the Merger Consideration exceeds the exercise price per Share shall be canceled at that is outstanding immediately prior to the Effective Time and(collectively, in exchange therefor, each former holder of such the “Company Stock Option SARs”) shall be entitled cancelled and shall entitle the holder thereof to the right to receive, as soon as practicablereasonably practicable following the Effective Time (and in any event prior to the third business day after the later of (i) the Closing Date and (ii) the date on which the holder of the Company SAR in question executes and delivers a Holder Acknowledgement as provided in Section 2.3, but in each case no event later than three the expiration of the original term of such Company SAR), a lump sum cash payment, without interest, equal to the SAR Consideration applicable to such holder’s Company SAR, as determined pursuant to Section 1.7. (3c) business days following Immediately prior to the Effective Time, an amount each restricted share unit with respect to shares of Company Common Stock granted under a Company Stock Plan, regardless of whether or not vested, that is outstanding immediately prior to the Effective Time (collectively, the “Company RSUs”) shall be cancelled and shall entitle the holder thereof to the right to receive, as soon as reasonably practicable following the Effective Time (and in any event prior to the third business day after the later of (i) the Closing Date and (ii) the date on which the holder of the Company RSU in question executes and delivers a Holder Acknowledgement as provided in Section 2.3), a lump sum cash (payment, without interest, equal to the RSU Consideration applicable to such Company RSU, as determined pursuant to Section 1.7. (d) Parent or the Surviving Corporation shall be entitled to deduct and less withhold from the amounts otherwise payable pursuant to this Section 1.6 to any holder of Company Options, Company SARs and Company RSUs such amounts as are the Surviving Corporation is required to be withheld or deducted deduct and withhold with respect to the making of such payment under the Code Code, or any provision of state, local or foreign Law Tax Law, and the Surviving Corporation shall make any required filings with respect and payments to Tax authorities relating to any such deduction or withholding. To the extent that amounts are so deducted and withheld by the Surviving Corporation and paid to the making applicable Tax authority, such withheld amounts shall be treated for all purposes of such payment) equal this Agreement as having been paid to the product of (1) the excess, if any, holder of the Merger Consideration over Company Options, Company SARs or Company RSUs in respect of which such deduction and withholding was made by the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Stock Option; andSurviving Corporation. (iie) each The Company Stock Option and Parent agree that is outstanding immediately prior to the Effective Time for whichthe Company Stock Plans shall be amended to reflect the transactions contemplated by this Agreement, including (i) to preclude any automatic or formulaic grant of options, restricted shares or other awards thereunder on or after the date hereof, and (ii) to terminate the Company Stock Plans effective as of the Effective Time. (f) Prior to the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions)Company, the number Board of shares Directors of common stock the Company and the Compensation Committee of Parentthe Board of Directors of the Company, par value $.01 per share (“Parent Common Stock”)as applicable, rounded down shall adopt resolutions and take all other actions necessary to effectuate the provisions of this Section 1.6 and to ensure that, notwithstanding anything to the nearest whole sharecontrary, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent no service provider of the Company and its Subsidiaries shall deliver have any right to acquire any securities of the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant Company, the Surviving Corporation or any Subsidiary thereof or to receive any payment, right or benefit with respect to any award previously granted under the respective Company Stock Plans and (whether hereunder, under any Company Stock Plan or individual award agreement or otherwise) except the agreements evidencing right to receive the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue consideration as provided in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date1.6.

Stock Options and Other Stock-Based Awards. (ai) Each Except as otherwise agreed in writing by the Company and Parent and the applicable holder thereof, each option or other award to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the any employee and or director stock equity plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shallshall (notwithstanding any provisions to the contrary in the Company Stock Plans or applicable option grants), as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect be converted into the right to receive an amount in cash in U.S. dollars equal to the product of (x) the total number of shares of Company Common Stock subject to such Company Stock Options: Option and (iy) each Company Stock Option for whichthe excess, as if any, of the Effective Time, amount of the Merger Consideration exceeds over the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder share of Company Common Stock subject to such Company Stock Option shall be entitled (or if there is not any such excess, zero) with the aggregate amount of such payment rounded to receive, the nearest cent (the aggregate amount of such cash hereinafter referred to as soon as practicable, but in no event later than three (3the “Option Consideration”) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of federal, state, local or foreign Tax Law with respect to the making of such payment. (ii) equal Except as otherwise agreed in writing by the Company and Parent and the applicable holder thereof, immediately prior to the product Effective Time, each right of (1) any kind, contingent or accrued, to receive shares of Company Common Stock or benefits measured in whole or in part by the excess, if any, value of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the a number of shares of Company Common Stock subject to such granted under the Company Stock Option; and Plans or Company Benefit Plans (iiincluding, but not limited to, performance shares, stock appreciation rights, restricted stock, restricted stock units, phantom stock or units, deferred stock units and dividend equivalents), other than Restricted Shares (as hereinafter defined), Purchase Plan Shares (as hereinafter defined) each and Company Stock Option that Options (each, other than Restricted Shares, Purchase Plan Shares and Company Stock Options, a “Company Stock-Based Award”), whether vested or unvested, which is outstanding immediately prior to the Effective Time for whichshall (notwithstanding any provisions to the contrary under the applicable plans or grant awards), as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option cease to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect represent a right or award with respect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject Stock, shall become fully vested and shall entitle the holder thereof to such Company Stock Option receive, pursuant to Section 2.2(a) and the Exchange Ratio (as defined belowb), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, amount in cash equal to the quotient obtained by dividing Merger Consideration in respect of each Share underlying a particular Company Stock-Based Award (the aggregate exercise price for amount of such cash, together with the shares Option Consideration, hereinafter referred to as the “Option and Stock-Based Consideration”) less such amounts as are required to be withheld or deducted under the Code or any provision of federal, state, local or foreign Tax Law with respect to the making of such payment. (iii) Except as otherwise agreed in writing by the Company and Parent and the applicable holder thereof, and notwithstanding any contrary provisions, if any, in any plan or agreement or otherwise relating to such Restricted Shares, immediately prior to the Effective Time, each award of restricted Company Common Stock (the “Restricted Shares”) shall vest in full and be converted into the right to receive the Merger Consideration as provided in Section 2.1(a). (iv) At the Effective Time, the Company’s Stock Purchase Plan shall terminate. In connection with such termination, the Company shall refund to the participants in the Stock Purchase Plan any accumulated payroll deductions in respect of any Purchase Period ending after the Effective Time. The participants in the Stock Purchase Plan shall be entitled to continue to make purchases of Company Common Stock subject pursuant to the terms of the Stock Purchase Plan for any Purchase Period ending prior to the Effective Time and such shares (the “Purchase Plan Shares”) of Company Common Stock Option by shall be converted into the Exchange Ratio (each, as so adjusted, an “Adjusted Option”right to receive the Merger Consideration in accordance with Section 2.1(a). The adjustments provided After the date hereof, no participant in this Section 2.4(a)(iithe Stock Purchase Plan may increase the percentage amount of his or her payroll deduction election from those in effect on the date hereof. (v) with respect Prior to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent the Compensation Committee of the Board of Directors of the Company, or the Board of Directors of the Company, as appropriate, shall deliver make such adjustments and amendments to, make such determinations or take such actions with respect to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Plans, Company Stock Options, which shall provideCompany Benefit Plans, among other thingsCompany Stock-Based Awards, that such Adjusted Options Restricted Shares and agreements have been assumed by Parent and shall continue in effect on Purchase Plan Shares, including obtaining consents where necessary, to implement the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes foregoing provisions of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date5.5.

Stock Options and Other Stock-Based Awards. (a) Each As of the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee Stock Award Plan, as amended and director stock plans restated as of March 31, 2004, as subsequently amended, the Non-Employee Directors’ Stock Option and Stock Unit Plan, amended and restated as of January 8, 2002, as subsequently amended, the Restricted Stock Unit Plan, as amended and restated as of March 31, 2004, as subsequently amended or the Company Cap Plans (as defined below) (collectively, the “Company Stock Plans”), whether vested or unvested, ) that is outstanding immediately prior to the Effective Time shall(collectively, the “Company Options”) shall be converted into an option (an “Adjusted Option”) to purchase, on the same terms and conditions (including applicable vesting requirements) as applied to each such Company Option immediately prior to the Effective Time, the number of whole shares of Parent Common Stock that is equal to the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share), at an exercise price per share of Parent Common Stock (rounded up to the nearest whole xxxxx) equal to the exercise price for each such share of Company Common Stock subject to such Company Option immediately prior to the Effective Time divided by the Exchange Ratio; provided, that, in the case of any Company Option to which Section 421 of the Code applies as of the Effective Time by reason of its qualification under Section 422 of the Code, the exercise price, the number of shares of Parent Common Stock subject to such option and the terms and conditions of exercise of such option shall be determined in a manner consistent with the requirements of Section 424(a) of the Code. (b) As of the Effective Time, automatically each restricted share unit with respect to shares of Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (collectively, the “Company RSUs”) shall, by virtue of the Merger and without any action on the part of the holder thereof, become fully vested be converted into a restricted share unit, on the same terms and exercisable. With respect conditions (including applicable vesting requirements and deferral provisions) as applied to each such Company Stock Options: (i) each Company Stock Option for which, as of RSU immediately prior to the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making number of such payment) shares of Parent Common Stock that is equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to the Company RSU immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded to the nearest whole share) (a “Parent RSU”). The obligations in respect of the Parent RSUs shall be payable or distributable in accordance with the terms of the agreement, plan or arrangement relating to such Company Stock Option; andParent RSUs. (iic) Subject to the last sentence of this Section 1.5(c), as of the Effective Time, each share unit with respect to shares of Company Common Stock Option granted under the Capital Accumulation Plan for Senior Managing Directors Amended and Restated November 29, 2000, as subsequently amended and the Capital Accumulation Plan for Senior Managing Directors Amended and Restated as of October 28, 1999, as subsequently amended (collectively, the “Company Cap Plans”) that is outstanding immediately prior to the Effective Time for which(collectively, as the “Company Cap Units”) shall, by virtue of the Effective TimeMerger and without any action on the part of the holder thereof, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquirea share unit, on the same terms and conditions (including applicable vesting requirements and deferral provisions) as were applicable under applied to each such Company Stock Option (giving effect Cap Unit immediately prior to any terms and conditions resulting from the Transactions)Effective Time, with respect to the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, Stock that is equal to the product of the number of shares of Company Common Stock subject to such the Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up Cap Unit immediately prior to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option Effective Time multiplied by the Exchange Ratio (each, as so adjusted, an rounded to the nearest whole share) (a “Adjusted OptionParent Cap Unit”). The adjustments provided in Subject to the last sentence of this Section 2.4(a)(ii) with 1.5(c), the obligations in respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies Parent Cap Units shall be and are intended to be effected payable or distributable in a manner which is consistent accordance with Section 409A and 424(a) the terms of the Codeagreement, respectivelyplan or arrangement relating to such Parent Cap Units. Parent and the Company agree to cooperate in good faith to adjust, effective upon the occurrence of the Merger, the features under the Company Cap Plans and related award agreements that provide for awards of additional Company Cap Units in respect of previously awarded Company Cap Units to take into account the occurrence of the Merger. (d) As soon as practicable following of the Effective Time, Parent shall deliver to all amounts denominated in Company Common Stock and held in participant accounts (other than Company RSUs and Company Cap Units) (collectively, the holders of Adjusted Options appropriate notices setting forth such holders’ rights “Company Deferred Equity Units”) either pursuant to (i) the respective Company Stock Plans or (ii) any nonqualified deferred compensation program or any individual deferred compensation agreements (collectively, the “Company Deferred Equity Unit Plans”) shall, by virtue of the Merger and without any action on the agreements evidencing part of the grants of such Adjusted Optionsholder thereof, which shall providebe converted into deferred equity units, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject including applicable vesting requirements and deferral provisions) as applied to such Company Deferred Equity Units immediately prior to the adjustments required by this Section 2.4(a)(ii) after giving effect Effective Time, with respect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes number of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price shares of Parent Common Stock that is equal to the number of shares of Company Common Stock in which such Company Deferred Equity Units are denominated immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded to the nearest whole share) (a “Parent Deferred Equity Unit”). The obligations in respect of the Parent Deferred Equity Units shall be payable or distributable in accordance with the terms of the Company Deferred Equity Unit Plan relating to such Parent Deferred Equity Units. (e) As of the Effective Time, Parent shall assume the obligations and succeed to the rights of Company under the Company Stock Plans, the Company Cap Plans and the Company Deferred Equity Unit Plans with respect to the Company Options (as converted into Adjusted Options), the Company RSUs (as converted into Parent RSUs), the Company Cap Units (as converted into Parent Cap Units) and Company Deferred Equity Units (as converted into Parent Deferred Equity Units). Company and Parent agree that prior to the Effective Time each of the Company Stock Plans shall be amended (i) to reflect the transactions contemplated by this Agreement, including the conversion of the Company Options, Company RSUs, Company Cap Units and Company Deferred Equity Units pursuant to paragraphs (a), (b), (c) and (d) above and the substitution of Parent for Company thereunder to the extent appropriate to effectuate the assumption of such Company Stock Plans by Parent, (ii) to preclude any automatic or formulaic grant of options, restricted shares or other awards thereunder on or after the New York Effective Time, and (iii) to the extent requested by Parent in a timely manner and subject to compliance with applicable law and the terms of the plan, to terminate any or all Company Stock Exchange Plans effective immediately prior to the Effective Time (other than with respect to outstanding awards thereunder). (f) Notwithstanding anything to the “NYSE”contrary contained in this Section 1.5, at Parent’s request, the Company shall terminate, effective immediately prior to the Effective Time, the Company Cap Plans in a manner (i) on directed by Parent and (ii) that complies with Section 409A of the five Code, which may include, without limitation, termination of any other plans that would be aggregated with the Company Cap Plans for purposes of the plan aggregation rules under Section 409A of the Code. (5g) trading days immediately preceding Prior to the Closing DateEffective Time, the Company, the Board of Directors of the Company and the Compensation Committee of the Board of Directors of the Company, as applicable, shall take all actions necessary to effectuate the provisions of this Section 1.5. (h) All of the conversions and adjustments made pursuant to this Section 1.5, including without limitation, the determination of the number of shares of Parent Common Stock subject to any award and the exercise price of the Adjusted Options, shall be made in a manner consistent with the requirements of Section 409A of the Code. As soon as practicable after the Effective Time, Parent shall prepare and file with the SEC a post-effective amendment converting the Form S-4 to a Form S-8 (or file such other appropriate form) registering a number of shares of Parent Common Stock necessary to fulfill Parent’s obligations under this Section 1.5.

Stock Options and Other Stock-Based Awards. As of the Merger Effective Time: (a) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Stock Option; and (ii) each Company Media General Stock Option that is outstanding immediately prior to the Merger Effective Time for which, as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended assumed by New Holdco and converted into become an option to acquirepurchase, on the same terms and conditions (including applicable vesting requirements) as were applicable under applied to each such Company Media General Stock Option (giving effect immediately prior to any terms and conditions resulting from the Transactions)Merger Effective Time, the number of shares of common stock of Parent, par value $.01 per share (“Parent New Holdco Voting Common Stock”), rounded down to the nearest whole share, Stock that is equal to the product of the number of shares of Company Media General Voting Common Stock subject to such Company Media General Stock Option and immediately prior to the Exchange Ratio (as defined below)Merger Effective Time, at an exercise price per share of Parent New Holdco Voting Common Stock, rounded up to the nearest whole cent, Stock equal to the quotient obtained by dividing the aggregate exercise price for the shares each such share of Company Media General Voting Common Stock subject to such Company Media General Stock Option immediately prior to the Merger Effective Time (including applicable vesting, exercise and expiration provisions); and (b) each share of Media General Restricted Stock and each right of any kind, contingent or accrued, to receive shares of Media General Voting Common Stock or benefits measured in whole or in part by the Exchange Ratio value of a number of shares of Media General Voting Common Stock granted by Media General outstanding immediately prior to the Merger Effective Time (including Media General DSUs, restricted stock units, phantom units, deferred stock units, stock equivalents and dividend equivalents), other than Media General Stock Options (each, as so adjustedother than Media General Stock Options, an a “Adjusted OptionMedia General Stock-Based Award”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies , shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent New Holdco and shall continue in effect become an award, on the same terms and conditions (including applicable vesting requirements and deferral provisions) as applied to each such Media General Stock-Based Award immediately prior to the Merger Effective Time, with respect to the number of shares of New Holdco Voting Common Stock that is equal to the number of shares of Media General Voting Common Stock subject to the adjustments required by this Section 2.4(a)(ii) after giving effect Media General Stock-Based Award immediately prior to the Merger and giving effect to any terms and conditions resulting from the Transactions)Effective Time. For purposes the avoidance of this Section 2.4(a)(ii)doubt, “Exchange Ratio” shall mean shares of Media General Voting Common Stock issued in connection with the settlement of Media General Stock-Based Awards which vest on or prior to the Merger Consideration divided by Effective Time (including vested Media General Restricted Stock) shall be treated in the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Datemanner set forth in Section 5(a).

Stock Options and Other Stock-Based Awards. (a) Each The APA Closing and the transfer to the Carve-Out Buyer of the employment of employees of the Company or any of its Subsidiaries as contemplated by the APA shall not, in and of themselves, affect options to purchase shares of Company Common Stock granted under any Company Benefit Plan to any such employees whose employment with the Company or any of its Subsidiaries is transferred to the Carve-Out Buyer as contemplated by the APA (collectively, the “APA Options” and the “APA Employees,” respectively). As of the Effective Time, each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans to employees or directors of the Company or any of its Subsidiaries under any Company Benefit Plan, including the APA Options (collectively, the “Company Stock PlansOptions”), whether vested or unvested, that is outstanding immediately prior to the Effective Time Time, shall, as by virtue of the Effective Time, automatically Merger and without any action on the part of the holder thereof, become fully vested immediately accelerate and exercisable. With respect vest and be canceled and converted into the right to such Company Stock Options: (i) each Company Stock Option for whichreceive from the Surviving Corporation, as in consideration of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder cancelation of such Company Stock Option shall be entitled to receiveand in settlement therefore, as soon as practicable, but a payment in no event later than three (3) business days following the Effective Time, cash of an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1i) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the total number of shares of Company Common Stock subject to such canceled Company Stock Option; and Option and (ii) the excess, if any, of (A) the Merger Consideration over (B) the exercise price per share of Company Common Stock subject to such canceled Company Option, without interest (such amounts payable hereunder, the “Option Payments”); provided that (x) any such Company Option with respect to which the exercise price per share subject thereto is equal to or greater than the Merger Consideration shall be canceled in exchange for no consideration and (y) the Option Payments may be reduced by the amount of any required Tax withholdings as provided in Section 2.02(g). From and after the Effective Time, no Company Option shall be exercisable, and each Company Option shall only entitle the holder thereof to the payment provided for in this Section 2.04(a). (b) The APA Closing and the transfer to the Carve-Out Buyer of the employment of APA Employees shall not, in and of themselves, affect restricted shares of Company Common Stock Option granted under any Company Benefit Plan to any APA Employees (collectively, the “APA Restricted Shares”). As of the Effective Time, each restricted share of Company Common Stock granted to any employee or director of the Company or any of its Subsidiaries under a Company Benefit Plan, including the APA Restricted Shares (collectively, the “Company Restricted Shares), that is outstanding immediately prior to the Effective Time for whichTime, as shall, by virtue of the Effective TimeMerger and without any action on the part of the holder thereof, the Merger Consideration does not exceed the exercise price per Share shall immediately accelerate and vest and be amended canceled and converted into an option the right to acquirereceive, on in consideration for the same terms and conditions as were applicable under cancelation of such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions)Restricted Share, the number a payment in cash of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, an amount equal to the product of Merger Consideration, without interest, treating such Company Restricted Share in the number of same manner as all other shares of Company Common Stock subject are treated pursuant to Section 2.01 for such Company Stock Option and purposes (such amounts payable hereunder, the Exchange Ratio (as defined below“Restricted Share Payments”), at an exercise price per share of Parent Common Stock, rounded up to ; provided that the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option Restricted Share Payments may be reduced by the Exchange Ratio (each, amount of any required Tax withholdings as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions2.02(g). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date.

Stock Options and Other Stock-Based Awards. (ai) Each Except as otherwise agreed by Xxxxxx and a holder of Company Stock Options with respect to such holder’s Company Stock Options, each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”)Plans or otherwise, whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect be converted into the right to receive at the Effective Time an amount in cash in U.S. dollars equal to the product of (x) the total number of shares of Company Common Stock subject to such Company Stock Options: Option and (iy) each Company Stock Option for whichthe excess, as if any, of the Effective Time, amount of the Merger Consideration exceeds over the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder share of Company Common Stock subject to such Company Stock Option, with the aggregate amount of such payment rounded to the nearest cent (the aggregate amount of such cash hereinafter referred to as the “Option shall be entitled to receiveConsideration”), as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, U.S. state or local or foreign Tax Law with respect to the making of such payment. (ii) equal Except as otherwise agreed by Parent and a holder of a Company Stock-Based Award with respect to such holder’s Company Stock-Based Award, at the product Effective Time, each right of (1) any kind, contingent or accrued, to receive shares of Company Common Stock or benefits measured in whole or in part by the excess, if any, value of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the a number of shares of Company Common Stock subject to such granted under the Company Stock Option; and Plans or Company Benefit Plans or otherwise (iiincluding restricted stock units, phantom units, deferred stock units and dividend equivalents), other than Restricted Shares (as hereinafter defined) each and Company Stock Option that Options (each, other than Restricted Shares and Company Stock Options, a “Company Stock-Based Award”), whether vested or unvested, which is outstanding immediately prior to the Effective Time for whichshall cease to represent a right or award with respect to shares of Company Common Stock, shall become fully vested and shall entitle the holder thereof to receive, at the Effective Time an amount in cash equal to the Merger Consideration in respect of each Share underlying a particular Company Stock-Based Award (the aggregate amount of such cash, together with the Option Consideration, hereinafter referred to as the “Option and Stock-Based Consideration”) less such amounts as are required to be withheld or deducted under the Code or any provision of U.S. state or local Tax Law with respect to the making of such payment. (iii) Except as otherwise agreed by Xxxxxx and a holder of Restricted Shares with respect to such holder’s Restricted Shares, immediately prior to the Effective Time, each award of restricted Company Common Stock (the “Restricted Shares”) shall vest in full and be converted into the right to receive the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactionsprovided in Section 2.1(a), less such amounts as are required to be withheld or deducted under the number Code or any provision of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) U.S. state or local Tax Law with respect to any the making of such payment. (iv) The Compensation and Human Resources Committee of the Board of Directors and/or the Board of Directors of the Company (as applicable) shall make such adjustments and amendments, make such determinations and take all necessary corporation actions with respect to Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options Company Stock-Based Awards and agreements have been assumed by Parent and shall continue in effect on Restricted Shares to implement the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes foregoing provisions of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”5.5(a) on the five (5) trading days immediately preceding the Closing Date.

Stock Options and Other Stock-Based Awards. (a) Each Except as otherwise mutually agreed by Alcatel and Lucent, at the Effective Time, each outstanding option to purchase shares of Company Common Stock Shares (each, a “Company Stock Option”"LUCENT STOCK OPTION") granted under Lucent's compensation or benefit plans or agreements pursuant to which Shares may be issued (collectively, the employee and director stock plans of "LUCENT STOCK OPTION PLANS") (excluding any option granted under the Company Lucent 2001 Employee Stock Purchase Plan (the “Company Stock Plans”"ESPP")), whether vested or unvestednot vested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Time for which, as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option a right to acquire, on the same terms and conditions as were applicable under such Company Lucent Stock Option (giving effect prior to any terms and conditions resulting from the Transactions)Effective Time, the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product number) of Alcatel Ordinary Shares determined by multiplying (x) the number of shares of Company Common Stock Shares subject to such Company Lucent Stock Option and immediately prior to the Effective Time by (y) the Exchange Ratio (as defined below)Ratio, at an exercise price per share Alcatel Ordinary Shares expressed in Euros equal to the product of Parent Common Stock(A) the quotient of (x) the U.S. dollar exercise price per Share otherwise purchasable pursuant to such Lucent Stock Option, rounded divided by (y) the Exchange Ratio, multiplied by (B) the Euro Exchange Rate, rounding the resulting exercise price up to the nearest whole euro cent. The "EURO EXCHANGE RATE" shall equal the Noon Buying Rate for euros as announced by the Federal Reserve Bank of New York for the Closing Date, equal which for the avoidance of doubt shall be computed as euros per one U.S. dollar. In addition, prior to the quotient obtained by dividing Effective Time (but effective as of the aggregate exercise price for Effective Time), Lucent will make any amendments to the shares terms of Company Common Stock subject to such Company Lucent Stock Option Plans that are necessary to give effect to the transactions contemplated by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”)this Section. The adjustments provided Lucent has identified in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a1.04(a) of the Code applies separate disclosure letter delivered by Lucent to Alcatel dated as of the date of this Agreement (the "LUCENT DISCLOSURE LETTER") each of the Lucent Stock Option Plans. Lucent has not taken, and shall be and are intended not take, any action causing any option holder to be effected have the right to receive a "change in a manner which is consistent with control cash-out" described in Section 409A and 424(a11(b) of the CodeLucent 2003 Long Term Incentive Program, respectivelySection 10(b) of the Lucent 2000 Stock Option Plan or any similar provision of any other Lucent Stock Option Plan. As soon as practicable following The rights to exercise for Alcatel Ordinary Shares into which the Effective Time, Parent shall deliver Lucent Stock Options will be converted will have exercise features (including without limitation net cashless exercise features) comparable to the those provided generally to holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue Alcatel stock options employed in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Datejurisdiction.

Stock Options and Other Stock-Based Awards. (a) Each As of the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee Stock Award Plan, as amended and director stock plans restated as of March 31, 2004, as subsequently amended, the Non-Employee Directors' Stock Option and Stock Unit Plan, amended and restated as of January 8, 2002, as subsequently amended, the Restricted Stock Unit Plan, as amended and restated as of March 31, 2004, as subsequently amended or the Company Cap Plans (as defined below) (collectively, the “"Company Stock Plans”), whether vested or unvested, ") that is outstanding immediately prior to the Effective Time shall(collectively, the "Company Options") shall be converted into an option (an "Adjusted Option") to purchase, on the same terms and conditions (including applicable vesting requirements) as applied to each such Company Option immediately prior to the Effective Time, the number of whole shares of Parent Common Stock that is equal to the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share), at an exercise price per share of Parent Common Stock (rounded up to the nearest whole xxxxx) equal to the exercise price for each such share of Company Common Stock subject to such Company Option immediately prior to the Effective Time divided by the Exchange Ratio; provided, that, in the case of any Company Option to which Section 421 of the Code applies as of the Effective Time by reason of its qualification under Section 422 of the Code, the exercise price, the number of shares of Parent Common Stock subject to such option and the terms and conditions of exercise of such option shall be determined in a manner consistent with the requirements of Section 424(a) of the Code. (b) As of the Effective Time, automatically each restricted share unit with respect to shares of Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (collectively, the "Company RSUs") shall, by virtue of the Merger and without any action on the part of the holder thereof, become fully vested be converted into a restricted share unit, on the same terms and exercisable. With respect conditions (including applicable vesting requirements and deferral provisions) as applied to each such Company Stock Options: (i) each Company Stock Option for which, as of RSU immediately prior to the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making number of such payment) shares of Parent Common Stock that is equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to the Company RSU immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded to the nearest whole share) (a "Parent RSU"). The obligations in respect of the Parent RSUs shall be payable or distributable in accordance with the terms of the agreement, plan or arrangement relating to such Company Stock Option; andParent RSUs. <PAGE> (iic) Subject to the last sentence of this Section 1.5(c), as of the Effective Time, each share unit with respect to shares of Company Common Stock Option granted under the Capital Accumulation Plan for Senior Managing Directors Amended and Restated November 29, 2000, as subsequently amended and the Capital Accumulation Plan for Senior Managing Directors Amended and Restated as of October 28, 1999, as subsequently amended (collectively, the "Company Cap Plans") that is outstanding immediately prior to the Effective Time for which(collectively, as the "Company Cap Units") shall, by virtue of the Effective TimeMerger and without any action on the part of the holder thereof, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquirea share unit, on the same terms and conditions (including applicable vesting requirements and deferral provisions) as were applicable under applied to each such Company Stock Option (giving effect Cap Unit immediately prior to any terms and conditions resulting from the Transactions)Effective Time, with respect to the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, Stock that is equal to the product of the number of shares of Company Common Stock subject to such the Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up Cap Unit immediately prior to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option Effective Time multiplied by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”rounded to the nearest whole share) (a "Parent Cap Unit"). The adjustments provided in Subject to the last sentence of this Section 2.4(a)(ii) with 1.5(c), the obligations in respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies Parent Cap Units shall be and are intended to be effected payable or distributable in a manner which is consistent accordance with Section 409A and 424(a) the terms of the Codeagreement, respectivelyplan or arrangement relating to such Parent Cap Units. Parent and the Company agree to cooperate in good faith to adjust, effective upon the occurrence of the Merger, the features under the Company Cap Plans and related award agreements that provide for awards of additional Company Cap Units in respect of previously awarded Company Cap Units to take into account the occurrence of the Merger. (d) As soon as practicable following of the Effective Time, Parent shall deliver to all amounts denominated in Company Common Stock and held in participant accounts (other than Company RSUs and Company Cap Units) (collectively, the holders of Adjusted Options appropriate notices setting forth such holders’ rights "Company Deferred Equity Units") either pursuant to (i) the respective Company Stock Plans or (ii) any nonqualified deferred compensation program or any individual deferred compensation agreements (collectively, the "Company Deferred Equity Unit Plans") shall, by virtue of the Merger and without any action on the agreements evidencing part of the grants of such Adjusted Optionsholder thereof, which shall providebe converted into deferred equity units, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject including applicable vesting requirements and deferral provisions) as applied to such Company Deferred Equity Units immediately prior to the adjustments required by this Section 2.4(a)(ii) after giving effect Effective Time, with respect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes number of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price shares of Parent Common Stock that is equal to the number of shares of Company Common Stock in which such Company Deferred Equity Units are denominated immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded to the nearest whole share) (a "Parent Deferred Equity Unit"). The obligations in respect of the Parent Deferred Equity Units shall be payable or distributable in accordance with the terms of the Company Deferred Equity Unit Plan relating to such Parent Deferred Equity Units. (e) As of the Effective Time, Parent shall assume the obligations and succeed to the rights of Company under the Company Stock Plans, the Company Cap Plans and the Company Deferred Equity Unit Plans with respect to the Company Options (as converted into Adjusted Options), the Company RSUs (as converted into Parent RSUs), the Company Cap Units (as converted into Parent Cap Units) and Company Deferred Equity Units (as converted into Parent Deferred Equity Units). Company and Parent agree that prior to the Effective Time each of the Company Stock Plans shall be amended (i) to reflect the transactions contemplated by this Agreement, including the conversion of the Company Options, Company RSUs, Company Cap Units and Company Deferred Equity Units pursuant to paragraphs (a), (b), (c) and (d) above and the substitution of Parent for Company thereunder to the extent appropriate to effectuate the assumption of such Company Stock Plans by Parent, (ii) to preclude any automatic <PAGE> or formulaic grant of options, restricted shares or other awards thereunder on or after the New York Effective Time, and (iii) to the extent requested by Parent in a timely manner and subject to compliance with applicable law and the terms of the plan, to terminate any or all Company Stock Exchange Plans effective immediately prior to the Effective Time (other than with respect to outstanding awards thereunder). (f) Notwithstanding anything to the “NYSE”contrary contained in this Section 1.5, at Parent's request, the Company shall terminate, effective immediately prior to the Effective Time, the Company Cap Plans in a manner (i) on directed by Xxxxxx and (ii) that complies with Section 409A of the five Code, which may include, without limitation, termination of any other plans that would be aggregated with the Company Cap Plans for purposes of the plan aggregation rules under Section 409A of the Code. (5g) trading days immediately preceding Prior to the Closing DateEffective Time, the Company, the Board of Directors of the Company and the Compensation Committee of the Board of Directors of the Company, as applicable, shall take all actions necessary to effectuate the provisions of this Section 1.5. (h) All of the conversions and adjustments made pursuant to this Section 1.5, including without limitation, the determination of the number of shares of Parent Common Stock subject to any award and the exercise price of the Adjusted Options, shall be made in a manner consistent with the requirements of Section 409A of the Code. As soon as practicable after the Effective Time, Parent shall prepare and file with the SEC a post-effective amendment converting the Form S-4 to a Form S-8 (or file such other appropriate form) registering a number of shares of Parent Common Stock necessary to fulfill Parent's obligations under this Section 1.5.

Stock Options and Other Stock-Based Awards. (ai) Each option to purchase shares of Company Common Stock Shares (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”)Plans or otherwise, whether vested or unvested, that is outstanding immediately prior to the Effective Acceptance Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect be cancelled immediately prior to the Acceptance Time in exchange for the right to receive at the Acceptance Time an amount in cash in U.S. dollars equal to the product of (x) the total number of Shares subject to such Company Stock Options: Option and (iy) each Company Stock Option for whichthe excess, as if any, of the Effective Time, amount of the Merger Consideration exceeds Offer Price over the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of subject to such Company Stock Option, with the aggregate amount of such payment rounded to the nearest cent (the aggregate amount of such cash hereinafter referred to as the “Option shall be entitled to receive, as soon as practicable, but in no event later than three (3Consideration”) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, U.S. state or local or foreign Tax Law with respect to the making of such payment) equal to . The Company shall pay the product holders of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and Options the cash payments described in this Section 6.5(a)(i) at or as soon as reasonably practicable after the Acceptance Time, but in any event within five (25) business days following the number of shares of Company Common Stock subject to such Company Stock Option; andAcceptance Time. (ii) each Company Stock Option that is outstanding immediately Immediately prior to the Effective Time for which, as of the Effective Acceptance Time, each award of restricted Company Common Stock (the Merger Consideration does “Restricted Shares”) that has not exceed the exercise price per Share previously vested shall be amended and converted into cancelled in exchange for the right to receive at the Acceptance Time an option amount per Restricted Share in cash in U.S. dollars equal to acquirethe Offer Price (the aggregate amount of such cash, on hereinafter the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common StockRestricted Shares Consideration”), rounded down less such amounts as are required to be withheld or deducted under the Code or any provision of U.S. state or local Tax Law with respect to the nearest whole sharemaking of such payment. The Company shall pay the Restricted Shares Consideration at or as soon as reasonably practicable after the Acceptance Time, equal but in any event within five (5) business days following the Acceptance Time. For the avoidance of doubt, any Restricted Shares that vest prior to the product cancellation contemplated by the first sentence of this Section 6.5(a)(ii) shall be treated as Shares for all purposes of this Agreement, including, without limitation, Section 1.1 and Section 3.1 of this Agreement. (iii) As promptly as practicable after the date hereof, the Company’s 2007 Employee Stock Purchase Plan (“ESPP”) shall be suspended (the date of such suspension, the “Cut Off Date”). An employee having a balance in the employee’s stock purchase account on the Cut Off Date shall be entitled to purchase on the Cut Off Date a number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio whole Purchase Plan Shares (as defined belowin Section 9.14(a), at an exercise price per share of Parent Common Stock, rounded up to ) calculated in accordance with the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectivelyESPP. As soon as practicable following the Effective Cut Off Date, all amounts credited to the stock purchase accounts of participating employees shall, to the extent not applied to the purchase of Purchase Plan Shares pursuant to the immediately preceding sentence, be refunded to participating employees. Purchase Plan Shares shall be treated as Shares for all purposes of this Agreement, including with respect to Section 1.1 and Section 3.1(a) of this Agreement. (iv) Immediately following the Acceptance Time, Parent shall deliver deposit or shall cause to be deposited with the Company cash in U.S. dollars sufficient to pay the Option Consideration and the Restricted Shares Consideration. (v) At or prior to the holders Acceptance Time, the Company, the Board of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to Directors of the respective Company Stock Plans and the agreements evidencing Compensation and Human Resource Committee of the grants Board of such Adjusted OptionsDirectors of the Company as applicable, which shall provide, among other things, that such Adjusted Options adopt any resolutions and agreements have been assumed by Parent take any and shall continue in effect on all actions necessary to effectuate the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes provisions of this Section 2.4(a)(ii6.5(a). The Company shall take all actions necessary to ensure that from and after the Acceptance Time, “Exchange Ratio” shall mean neither Parent nor the Merger Consideration divided by Surviving Corporation will be required to deliver Shares or other capital stock of the volume weighted average per-share trading price Company to any person pursuant to or in settlement of Parent Common Company Stock on Options, Restricted Shares or Purchase Plan Shares after the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing DateEffective Time.

Stock Options and Other Stock-Based Awards. (ai) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect be converted into the right to receive at the Effective Time an amount in cash in U.S. dollars equal to the product of (x) the total number of shares of Company Common Stock subject to such Company Stock Options: Option and (iy) each Company Stock Option for whichthe excess, as if any, of the Effective Time, amount of the Merger Consideration exceeds over the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder share of Company Common Stock subject to such Company Stock Option, with the aggregate amount of such payment rounded to the nearest cent (the aggregate amount of such cash hereinafter referred to as the “Option shall be entitled to receive, as soon as practicable, but in no event later than three (3Consideration”) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, U.S. state or local or foreign Tax Law with respect to the making of such payment. (ii) equal At the Effective Time, each right of any kind, contingent or accrued, to receive shares of Company Common Stock or benefits measured in whole or in part by the product value of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the a number of shares of Company Common Stock subject to such granted under the Company Stock Option; and Plans or Company Benefit Plans (ii) each including restricted stock units, phantom units, deferred stock units, stock equivalents and dividend equivalents), other than Restricted Shares (as hereinafter defined), any rights under the Stock Purchase Plan, and Company Stock Option that Options (each, other than Restricted Shares, rights under the Stock Purchase Plan and Company Stock Options, a “Company Stock-Based Award”), whether vested or unvested, which is outstanding immediately prior to the Effective Time for whichshall cease to represent a right or award with respect to shares of Company Common Stock, shall become fully vested and shall entitle the holder thereof to receive, at the Effective Time an amount in cash equal to the Merger Consideration in respect of each Share underlying a particular Company Stock-Based Award (the aggregate amount of such cash, together with the Option Consideration, hereinafter referred to as the “Option and Stock-Based Consideration”) less such amounts as are required to be withheld or deducted under the Code or any provision of U.S. state or local Tax Law with respect to the making of such payment. (iii) Immediately prior to the Effective Time, each award of restricted Company Common Stock (the “Restricted Shares”) shall vest in full and be converted into the right to receive the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactionsprovided in Section 2.1(a), less such amounts as are required to be withheld or deducted under the number Code or any provision of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) U.S. state or local Tax Law with respect to any Company Stock Option to which Section 409A or 421 the making of such payment. (aiv) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Timedate of this Agreement, Parent shall deliver the Board of Directors of the Company (or, if appropriate, any committee of the Board of Directors of the Company administering the Company’s Employee Stock Purchase Plan (the “Stock Purchase Plan”)) will adopt such resolutions and take such other actions as may be required to provide that with respect to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to Stock Purchase Plan: (A) participants in the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue Purchase Plan may not increase their payroll deductions or purchase election from those in effect on the same terms and conditions date of this Agreement, (subject B) no purchase period will be commenced after the date of this Agreement (it being understood that any purchase period in effect on the date of the Agreement may continue in accordance with its terms), (C) the Stock Purchase Plan shall be terminated effective immediately prior to the adjustments required by this Section 2.4(a)(iiEffective Time and (D) after giving effect the amount of the accumulated contributions of each participant under the Stock Purchase Plan as of immediately prior to the Merger Effective Time shall be refunded to such participant as promptly as practicable following the Effective Time (without interest). (v) The Compensation & Organization Committee of the Board of Directors of the Company shall make such adjustments and giving effect amendments to any terms or make such determinations with respect to Company Stock Options, Company Stock-Based Awards, Restricted Shares and conditions resulting from rights under the Transactions). For purposes Stock Purchase Plan to implement the foregoing provisions of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date5.5.

Stock Options and Other Stock-Based Awards. (a) Each Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee 2001 Stock Option Plan of the Company and director stock plans the 2006 Incentive Award Plan of the Company (collectively, the ““ Company Stock PlansPlans ”), regardless of whether vested or unvestednot vested, that is outstanding immediately prior to the Effective Time shall(collectively, the “Company Options ”) shall be cancelled and shall entitle the holder thereof to the right to receive as soon as reasonably practicable following the Effective Time (and in any event prior to the third business day after the later of (i) the Closing Date and (ii) the date on which the holder of the Company Option in question executes and delivers a Holder Acknowledgement as provided in Section 2.3, but in each case no later than the expiration of the original term of such Company Option), a lump sum cash payment, without interest, equal to the Option Consideration applicable to such holder’s Company Option, as of determined pursuant to Section 1.7. (b) Immediately prior to the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With each stock appreciation right with respect to such shares of Company Common Stock granted under a Company Stock Options: (i) each Company Stock Option for whichPlan, as regardless of the Effective Timewhether or not vested, the Merger Consideration exceeds the exercise price per Share shall be canceled at that is outstanding immediately prior to the Effective Time and(collectively, in exchange therefor, each former holder of such the “ Company Stock Option SARs ”) shall be entitled cancelled and shall entitle the holder thereof to the right to receive, as soon as practicablereasonably practicable following the Effective Time (and in any event prior to the third business day after the later of (i) the Closing Date and (ii) the date on which the holder of the Company SAR in question executes and delivers a Holder Acknowledgement as provided in Section 2.3, but in each case no event later than three the expiration of the original term of such Company SAR), a lump sum cash payment, without interest, equal to the SAR Consideration applicable to such holder’s Company SAR, as determined pursuant to Section 1.7. (3c) business days following Immediately prior to the Effective Time, an amount each restricted share unit with respect to shares of Company Common Stock granted under a Company Stock Plan, regardless of whether or not vested, that is outstanding immediately prior to the Effective Time (collectively, the “ Company RSUs ”) shall be cancelled and shall entitle the holder thereof to the right to receive, as soon as reasonably practicable following the Effective Time (and in any event prior to the third business day after the later of (i) the Closing Date and (ii) the date on which the holder of the Company RSU in question executes and delivers a Holder Acknowledgement as provided in Section 2.3), a lump sum cash (payment, without interest, equal to the RSU Consideration applicable to such Company RSU, as determined pursuant to Section 1.7. (d) Parent or the Surviving Corporation shall be entitled to deduct and less withhold from the amounts otherwise payable pursuant to this Section 1.6 to any holder of Company Options, Company SARs and Company RSUs such amounts as are the Surviving Corporation is required to be withheld or deducted deduct and withhold with respect to the making of such payment under the Code Code, or any provision of state, local or foreign Law Tax Law, and the Surviving Corporation shall make any required filings with respect and payments to Tax authorities relating to any such deduction or withholding. To the extent that amounts are so deducted and withheld by the Surviving Corporation and paid to the making applicable Tax authority, such withheld amounts shall be treated for all purposes of such payment) equal this Agreement as having been paid to the product of (1) the excess, if any, holder of the Merger Consideration over Company Options, Company SARs or Company RSUs in respect of which such deduction and withholding was made by the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Stock Option; andSurviving Corporation. (iie) each The Company Stock Option and Parent agree that is outstanding immediately prior to the Effective Time for whichthe Company Stock Plans shall be amended to reflect the transactions contemplated by this Agreement, including (i) to preclude any automatic or formulaic grant of options, restricted shares or other awards thereunder on or after the date hereof, and (ii) to terminate the Company Stock Plans effective as of the Effective Time. (f) Prior to the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions)Company, the number Board of shares Directors of common stock the Company and the Compensation Committee of Parentthe Board of Directors of the Company, par value $.01 per share (“Parent Common Stock”)as applicable, rounded down shall adopt resolutions and take all other actions necessary to effectuate the provisions of this Section 1.6 and to ensure that, notwithstanding anything to the nearest whole sharecontrary, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent no service provider of the Company and its Subsidiaries shall deliver have any right to acquire any securities of the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant Company, the Surviving Corporation or any Subsidiary thereof or to receive any payment, right or benefit with respect to any award previously granted under the respective Company Stock Plans and (whether hereunder, under any Company Stock Plan or individual award agreement or otherwise) except the agreements evidencing right to receive the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue consideration as provided in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date1.6.

Stock Options and Other Stock-Based Awards. (ai) Each option to purchase shares of Company Common Stock Stock, as listed in Section 3.2(b) of the Company Disclosure Schedule (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of be converted into the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled right at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, receive an amount in cash (without interestcash, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1x) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Time for which, as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the total number of shares of Company Common Stock subject to such Company Stock Option and multiplied by (y) the Exchange Ratio (as defined below)excess, at an if any, of the amount of the Merger Consideration over the exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option, with the aggregate amount of such payment rounded to the nearest cent (the aggregate amount of such cash hereinafter referred to as the “Option by the Exchange Ratio (each, as so adjusted, an “Adjusted OptionConsideration”). The adjustments provided in this Section 2.4(a)(ii. (ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following At the Effective Time, Parent shall deliver each right of any kind, contingent or accrued, to receive shares of Company Common Stock or benefits measured in whole or in part by the value of a number of shares of Company Common Stock, and each award of any kind consisting of shares of Company Common Stock, granted under the Company Stock Plans or the Company Benefit Plans (including performance shares, restricted stock, restricted stock units, phantom units, deferred stock units and dividend equivalents), other than Company Stock Options, as listed, in each case, in Section 3.2(b) of the Company Disclosure Schedule (each, a “Company Stock-Based Award”), whether vested or unvested, which is outstanding immediately prior to the holders Effective Time shall cease to represent a right or award with respect to shares of Adjusted Options appropriate notices setting forth such holders’ rights pursuant Company Common Stock, shall become fully vested and shall entitle the holder thereof to receive, at the Effective Time, an amount in cash equal to the respective Merger Consideration in respect of each Share underlying a particular vested Company Stock-Based Award (the aggregate amount of such cash, together with the Option Consideration, hereinafter referred to as the “Option and Stock-Based Consideration”). (iii) The compensation committee of the board of directors of the Company shall pass such resolutions with respect to the Company Stock Options and Company Stock-Based Awards consistent with the foregoing provisions of this Section 5.5, and shall take all other actions as may be necessary to terminate all Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted all outstanding Company Stock Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average perCompany Stock-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing DateBased Awards thereunder.

Stock Options and Other Stock-Based Awards. (a) Each Immediately prior to the Effective Time, each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans to employees or directors of the Company or any of its Subsidiaries under the Company’s Stock Incentive Plan or Director’s Omnibus Long-term Incentive Plan (the “Company Stock Plans”), “) that is outstanding and unexercised as of the Effective Time (whether vested or unvested) (collectively, that is outstanding immediately prior the “Company Options“) shall be canceled, and the holder thereof shall be entitled to the Effective Time shall, as of receive at the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, or as soon as practicablepracticable thereafter, but from the Surviving Corporation, in no event later than three (3) business days following the Effective Timeconsideration for such cancellation, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2A) the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time and (B) the excess, if any, of the Per Share Amount over the exercise price per share of Company Common Stock Option; andof such Company Option immediately prior to the Effective Time, less any required withholding taxes. (iib) As of the Effective Time, each performance share award granted to any employee of the Company Stock Option or any of its Subsidiaries under the Company’s Performance Share Program that is outstanding immediately prior to the Effective Time for whichshall, as by virtue of the Merger and without any action on the part of the holder thereof, be cancelled and converted into the right to receive at the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into or as soon as practicable thereafter, an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, amount in cash equal to the product of (A) the number Per Share Amount, multiplied by (B) the greater of (i) 100% of the Target Performance Shares (as defined in such Performance Share Program) relating to Performance Cycles (as defined in such Performance Share Program) in effect as of the Effective Time plus accumulated dividends, if any, on such shares as determined in accordance with such Performance Share Program and (ii) 100% of the Performance Shares (as defined in such Performance Share Program) relating to Performance Cycles in effect as of the Effective Time based on performance calculated through the quarter ending immediately prior to the Effective Time plus accumulated dividends, if any, on such shares as determined in accordance with such Performance Share Program, subject to such deducting and withholding as may be required under the Code and any applicable state or local tax law with respect to such payment. (c) Immediately prior to the Effective Time, all restricted stock awards granted under the Company Stock Plans shall vest in full so as to no longer be subject to any forfeiture or vesting requirements, and all such shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For considered outstanding shares for all purposes of this Section 2.4(a)(ii)Agreement, “Exchange Ratio” shall mean including, without limitation, for purposes of the right to receive the Forms of Election and to make elections and receive the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Datewith respect thereto.

Stock Options and Other Stock-Based Awards. (a) Each As of the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee Stock Award Plan, as amended and director stock plans restated as of March 31, 2004, as subsequently amended, the Non-Employee Directors' Stock Option and Stock Unit Plan, amended and restated as of January 8, 2002, as subsequently amended, the Restricted Stock Unit Plan, as amended and restated as of March 31, 2004, as subsequently amended or the Company Cap Plans (as defined below) (collectively, the “"Company Stock Plans”), whether vested or unvested, ") that is outstanding immediately prior to the Effective Time shall(collectively, the "Company Options") shall be converted into an option (an "Adjusted Option") to purchase, on the same terms and conditions (including applicable vesting requirements) as applied to each such Company Option immediately prior to the Effective Time, the number of whole shares of Parent Common Stock that is equal to the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share), at an exercise price per share of Parent Common Stock (rounded up to the nearest whole xxxxx) equal to the exercise price for each such share of Company Common Stock subject to such Company Option immediately prior to the Effective Time divided by the Exchange Ratio; provided, that, in the case of any Company Option to which Section 421 of the Code applies as of the Effective Time by reason of its qualification under Section 422 of the Code, the exercise price, the number of shares of Parent Common Stock subject to such option and the terms and conditions of exercise of such option shall be determined in a manner consistent with the requirements of Section 424(a) of the Code. (b) As of the Effective Time, automatically each restricted share unit with respect to shares of Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (collectively, the "Company RSUs") shall, by virtue of the Merger and without any action on the part of the holder thereof, become fully vested be converted into a restricted share unit, on the same terms and exercisable. With respect conditions (including applicable vesting requirements and deferral provisions) as applied to each such Company Stock Options: (i) each Company Stock Option for which, as of RSU immediately prior to the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making number of such payment) shares of Parent Common Stock that is equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to the Company RSU immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded to the nearest whole share) (a "Parent RSU"). The obligations in respect of the Parent RSUs shall be payable or distributable in accordance with the terms of the agreement, plan or arrangement relating to such Parent RSUs. 3 <PAGE> (c) Subject to the last sentence of this Section 1.5(c), as of the Effective Time, each share unit with respect to shares of Company Common Stock Option; and granted under the Capital Accumulation Plan for Senior Managing Directors Amended and Restated November 29, 2000, as subsequently amended and the Capital Accumulation Plan for Senior Managing Directors Amended and Restated as of October 28, 1999, as subsequently amended (iicollectively, the "Company Cap Plans") each Company Stock Option that is outstanding immediately prior to the Effective Time for which(collectively, as the "Company Cap Units") shall, by virtue of the Effective TimeMerger and without any action on the part of the holder thereof, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquirea share unit, on the same terms and conditions (including applicable vesting requirements and deferral provisions) as were applicable under applied to each such Company Stock Option (giving effect Cap Unit immediately prior to any terms and conditions resulting from the Transactions)Effective Time, with respect to the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, Stock that is equal to the product of the number of shares of Company Common Stock subject to such the Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up Cap Unit immediately prior to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option Effective Time multiplied by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”rounded to the nearest whole share) (a "Parent Cap Unit"). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver Subject to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes last sentence of this Section 2.4(a)(ii1.5(c), “Exchange Ratio” the obligations in respect of the Parent Cap Units shall mean be payable or distributable in accordance with the Merger Consideration divided by terms of the volume weighted average per-share trading price agreement, plan or arrangement relating to such Parent Cap Units. Parent and the Company agree to cooperate in good faith to adjust, effective upon the occurrence of Parent Common Stock on the New York Stock Exchange (Merger, the “NYSE”) on features under the five (5) trading days immediately preceding Company Cap Plans and related award agreements that provide for awards of additional Company Cap Units in respect of previously awarded Company Cap Units to take into account the Closing Dateoccurrence of the Merger.

Stock Options and Other Stock-Based Awards. (ai) Each Except as otherwise agreed in writing by the Company and Parent and the applicable holder thereof, each option or other award to purchase shares of Company Common Stock (each, a “"Company Stock Option”") granted under the any employee and or director stock equity plans of the Company (the “"Company Stock Plans”"), whether vested or unvested, that is outstanding immediately prior to the Effective Time shallshall (notwithstanding any provisions to the contrary in the Company Stock Plans or applicable option grants), as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect be converted into the right to receive an amount in cash in U.S. dollars equal to the product of (x) the total number of shares of Company Common Stock subject to such Company Stock Options: Option and (iy) each Company Stock Option for whichthe excess, as if any, of the Effective Time, amount of the Merger Consideration exceeds over the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder share of Company Common Stock subject to such Company Stock Option shall be entitled (or if there is not any such excess, zero) with the aggregate amount of such payment rounded to receive, the nearest cent (the aggregate amount of such cash hereinafter referred to as soon as practicable, but in no event later than three (3the "Option Consideration") business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of federal, state, local or foreign Tax Law with respect to the making of such payment. (ii) equal Except as otherwise agreed in writing by the Company and Parent and the applicable holder thereof, immediately prior to the product Effective Time, each right of (1) any kind, contingent or accrued, to receive shares of Company Common Stock or benefits measured in whole or in part by the excess, if any, value of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the a number of shares of Company Common Stock subject to such granted under the Company Stock Option; and Plans or Company Benefit Plans (iiincluding, but not limited to, performance shares, stock appreciation rights, restricted stock, restricted stock units, phantom stock or units, deferred stock units and dividend equivalents), other than Restricted Shares (as hereinafter defined), Purchase Plan Shares (as hereinafter defined) each and Company Stock Option that Options (each, other than Restricted Shares, Purchase Plan Shares and Company Stock Options, a "Company Stock-Based Award"), whether vested or unvested, which is outstanding immediately prior to the Effective Time for whichshall (notwithstanding any provisions to the contrary under the applicable plans or grant awards), as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option cease to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect represent a right or award with respect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject Stock, shall become fully vested and shall entitle the holder thereof to such Company Stock Option receive, pursuant to Section 2.2(a) and the Exchange Ratio (as defined belowb), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, amount in cash equal to the quotient obtained by dividing Merger Consideration in respect of each Share underlying a particular Company Stock-Based Award (the aggregate exercise price for amount of such cash, together with the shares Option Consideration, hereinafter referred to as the "Option and Stock-Based Consideration") less such amounts as are required to be withheld or deducted under the Code or any provision of federal, state, local or foreign Tax Law with respect to the making of such payment. (iii) Except as otherwise agreed in writing by the Company and Parent and the applicable holder thereof, and notwithstanding any contrary provisions, if any, in any plan or agreement or otherwise relating to such Restricted Shares, immediately prior to the Effective Time, each award of restricted Company Common Stock (the "Restricted Shares") shall vest in full and be converted into the right to receive the Merger Consideration as provided in Section 2.1(a). (iv) At the Effective Time, the Company's Stock Purchase Plan shall terminate. In connection with such termination, the Company shall refund to the participants in the Stock Purchase Plan any accumulated payroll deductions in respect of any Purchase Period ending after the Effective Time. The participants in the Stock Purchase Plan shall be entitled to continue to make purchases of Company Common Stock subject pursuant to the terms of the Stock Purchase Plan for any Purchase Period ending prior to the Effective Time and such shares (the "Purchase Plan Shares") of Company Common Stock Option by shall be converted into the Exchange Ratio (each, as so adjusted, an “Adjusted Option”right to receive the Merger Consideration in accordance with Section 2.1(a). The adjustments provided After the date hereof, no participant in this Section 2.4(a)(iithe Stock Purchase Plan may increase the percentage amount of his or her payroll deduction election from those in effect on the date hereof. (v) with respect Prior to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent the Compensation Committee of the Board of Directors of the Company, or the Board of Directors of the Company, as appropriate, shall deliver make such adjustments and amendments to, make such determinations or take such actions with respect to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Plans, Company Stock Options, which shall provideCompany Benefit Plans, among other thingsCompany Stock-Based Awards, that such Adjusted Options Restricted Shares and agreements have been assumed by Parent and shall continue in effect on Purchase Plan Shares, including obtaining consents where necessary, to implement the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes foregoing provisions of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date5.5.

Stock Options and Other Stock-Based Awards. Except as otherwise agreed to in writing between the Company, Parent, Merger Sub and certain members of management of the Company listed in Schedule A to this Agreement, and solely with respect to such members of management of the Company and to the extent specified in such Section of the Parent Disclosure Schedules: (ai) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”)Plans or otherwise, whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect be converted into the right to receive at the Effective Time an amount in cash in U.S. dollars equal to the product of (x) the total number of shares of Company Common Stock subject to such Company Stock Options: Option and (iy) each Company Stock Option for whichthe excess, as if any, of the Effective Time, amount of the Merger Consideration exceeds over the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder share of Company Common Stock subject to such Company Stock Option, with the aggregate amount of such payment rounded down to the nearest cent (the aggregate amount of such cash hereinafter referred to as the “Option shall be entitled to receive, as soon as practicable, but in no event later than three (3Consideration”) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Tax Law with respect to the making of such payment. (ii) At the Effective Time, each account under the Company’s Directors’ Deferred Compensation Plan, as amended, (each, a “Directors’ Award Account”), shall become fully vested and payable and shall entitle the holder thereof to receive, at the Effective Time, an amount in cash equal to the Merger Consideration in respect of each notional Share credited to the holder under his or her Director Award Account. (iii) Immediately prior to the Effective Time, each award of restricted Company Common Stock (the “Restricted Shares”) shall be converted into the right to receive the Merger Consideration in an amount as determined under Section 2.1(a), payable on a deferred basis at the time that the underlying Restricted Shares would have vested under their terms as in effect immediately prior to the Effective Time plus earnings thereon (as described below), less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Tax Law with respect to the making of such payment and subject to the satisfaction by the holder of such Restricted Shares of all terms and conditions to which such vesting was subject under the terms of the Restricted Shares as in effect immediately prior to the Effective Time, including without limitation all forfeiture provisions, provided, however, that the holder’s deferred cash account will become immediately vested and payable upon termination of such holder’s employment by the Company without cause or upon the individual’s death or disability. If the holder of such Restricted Shares fails to satisfy such terms and conditions (as modified hereby), such holder shall forfeit his or her right to such Merger Consideration and any earnings thereon, and such amounts shall revert and be forfeited to Parent. Effective as of the Effective Time, Parent shall establish a grantor trust and shall deposit therein the Merger Consideration attributable to the Restricted Shares. From and after the Effective Time, Parent shall cause such amounts to be invested at the option of the account holder in a money market fund or an S&P 500 Index Fund and shall cause the earnings on such amounts to be credited to the accounts under such grantor trust of the former holders of the Restricted Shares. (iv) At the Effective Time, all amounts held in the accounts denominated in shares of Company Common Stock under the Partner Equity Deferred Compensation Stock Plan component of the OSI Restaurant Partners, Inc. Partner Equity Plan (the “PEP”) (each, a “Deferred Unit Account”) shall be converted into an obligation to pay cash with a value equal to the product of (1A) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2B) the number of shares of Company Common Stock subject to deemed held in such Company Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to Deferred Unit Account, in accordance with the Effective Time for which, as payment schedule and consistent with the terms of the Effective TimePEP as in effect from time to time. For purposes of this Agreement, “Company Stock-Based Awards” means the Merger Consideration does not exceed the exercise price per Share shall be amended obligations denominated in and converted into an option measured by reference to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject that are credited to such Company Stock Option the accounts under the Directors’ Deferred Compensation Plan, as amended, and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Partner Equity Deferred Compensation Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) Plan component of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing DatePEP.

Stock Options and Other Stock-Based Awards. (a) Each As of the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee Stock Award Plan, as amended and director stock plans restated as of March 31, 2004, as subsequently amended, the Non-Employee Directors’ Stock Option and Stock Unit Plan, amended and restated as of January 8, 2002, as subsequently amended, the Restricted Stock Unit Plan, as amended and restated as of March 31, 2004, as subsequently amended or the Company Cap Plans (as defined below) (collectively, the “Company Stock Plans”), whether vested or unvested, ) that is outstanding immediately prior to the Effective Time shall(collectively, the “Company Options”) shall be converted into an option (an “Adjusted Option”) to purchase, on the same terms and conditions (including applicable vesting requirements) as applied to each such Company Option immediately prior to the Effective Time, the number of whole shares of Parent Common Stock that is equal to the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share), at an exercise price per share of Parent Common Stock (rounded up to the nearest whole xxxxx) equal to the exercise price for each such share of Company Common Stock subject to such Company Option immediately prior to the Effective Time divided by the Exchange Ratio; provided, that, in the case of any Company Option to which Section 421 of the Code applies as of the Effective Time by reason of its qualification under Section 422 of the Code, the exercise price, the number of shares of Parent Common Stock subject to such option and the terms and conditions of exercise of such option shall be determined in a manner consistent with the requirements of Section 424(a) of the Code. (b) As of the Effective Time, automatically each restricted share unit with respect to shares of Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (collectively, the “Company RSUs”) shall, by virtue of the Merger and without any action on the part of the holder thereof, become fully vested be converted into a restricted share unit, on the same terms and exercisable. With respect conditions (including applicable vesting requirements and deferral provisions) as applied to each such Company Stock Options: (i) each Company Stock Option for which, as of RSU immediately prior to the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making number of such payment) shares of Parent Common Stock that is equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to the Company RSU immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded to the nearest whole share) (a “Parent RSU”). The obligations in respect of the Parent RSUs shall be payable or distributable in accordance with the terms of the agreement, plan or arrangement relating to such Company Stock Option; andParent RSUs. (iic) Subject to the last sentence of this Section 1.5(c), as of the Effective Time, each share unit with respect to shares of Company Common Stock Option granted under the Capital Accumulation Plan for Senior Managing Directors Amended and Restated November 29, 2000, as subsequently amended and the Capital Accumulation Plan for Senior Managing Directors Amended and Restated as of October 28, 1999, as subsequently amended (collectively, the “Company Cap Plans”) that is outstanding immediately prior to the Effective Time for which(collectively, as the “Company Cap Units”) shall, by virtue of the Effective TimeMerger and without any action on the part of the holder thereof, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquirea share unit, on the same terms and conditions (including applicable vesting requirements and deferral provisions) as were applicable under applied to each such Company Stock Option (giving effect Cap Unit immediately prior to any terms and conditions resulting from the Transactions)Effective Time, with respect to the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, Stock that is equal to the product of the number of shares of Company Common Stock subject to such the Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up Cap Unit immediately prior to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option Effective Time multiplied by the Exchange Ratio (each, as so adjusted, an rounded to the nearest whole share) (a “Adjusted OptionParent Cap Unit”). The adjustments provided in Subject to the last sentence of this Section 2.4(a)(ii) with 1.5(c), the obligations in respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies Parent Cap Units shall be and are intended to be effected payable or distributable in a manner which is consistent accordance with Section 409A and 424(a) the terms of the Codeagreement, respectivelyplan or arrangement relating to such Parent Cap Units. Parent and the Company agree to cooperate in good faith to adjust, effective upon the occurrence of the Merger, the features under the Company Cap Plans and related award agreements that provide for awards of additional Company Cap Units in respect of previously awarded Company Cap Units to take into account the occurrence of the Merger. (d) As soon as practicable following of the Effective Time, Parent shall deliver to all amounts denominated in Company Common Stock and held in participant accounts (other than Company RSUs and Company Cap Units) (collectively, the holders of Adjusted Options appropriate notices setting forth such holders’ rights “Company Deferred Equity Units”) either pursuant to (i) the respective Company Stock Plans or (ii) any nonqualified deferred compensation program or any individual deferred compensation agreements (collectively, the “Company Deferred Equity Unit Plans”) shall, by virtue of the Merger and without any action on the agreements evidencing part of the grants of such Adjusted Optionsholder thereof, which shall providebe converted into deferred equity units, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject including applicable vesting requirements and deferral provisions) as applied to such Company Deferred Equity Units immediately prior to the adjustments required by this Section 2.4(a)(ii) after giving effect Effective Time, with respect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes number of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price shares of Parent Common Stock that is equal to the number of shares of Company Common Stock in which such Company Deferred Equity Units are denominated immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded to the nearest whole share) (a “Parent Deferred Equity Unit”). The obligations in respect of the Parent Deferred Equity Units shall be payable or distributable in accordance with the terms of the Company Deferred Equity Unit Plan relating to such Parent Deferred Equity Units. (e) As of the Effective Time, Parent shall assume the obligations and succeed to the rights of Company under the Company Stock Plans, the Company Cap Plans and the Company Deferred Equity Unit Plans with respect to the Company Options (as converted into Adjusted Options), the Company RSUs (as converted into Parent RSUs), the Company Cap Units (as converted into Parent Cap Units) and Company Deferred Equity Units (as converted into Parent Deferred Equity Units). Company and Parent agree that prior to the Effective Time each of the Company Stock Plans shall be amended (i) to reflect the transactions contemplated by this Agreement, including the conversion of the Company Options, Company RSUs, Company Cap Units and Company Deferred Equity Units pursuant to paragraphs (a), (b), (c) and (d) above and the substitution of Parent for Company thereunder to the extent appropriate to effectuate the assumption of such Company Stock Plans by Parent, (ii) to preclude any automatic or formulaic grant of options, restricted shares or other awards thereunder on or after the New York Effective Time, and (iii) to the extent requested by Parent in a timely manner and subject to compliance with applicable law and the terms of the plan, to terminate any or all Company Stock Exchange Plans effective immediately prior to the Effective Time (other than with respect to outstanding awards thereunder). (f) Notwithstanding anything to the “NYSE”contrary contained in this Section 1.5, at Parent’s request, the Company shall terminate, effective immediately prior to the Effective Time, the Company Cap Plans in a manner (i) on directed by Parent and (ii) that complies with Section 409A of the five Code, which may include, without limitation, termination of any other plans that would be aggregated with the Company Cap Plans for purposes of the plan aggregation rules under Section 409A of the Code. (5g) trading days immediately preceding Prior to the Closing DateEffective Time, the Company, the Board of Directors of the Company and the Compensation Committee of the Board of Directors of the Company, as applicable, shall take all actions necessary to effectuate the provisions of this Section 1.5. (h) All of the conversions and adjustments made pursuant to this Section 1.5, including without limitation, the determination of the number of shares of Parent Common Stock subject to any award and the exercise price of the Adjusted Options, shall be made in a manner consistent with the requirements of Section 409A of the Code. As soon as practicable after the Effective Time, Parent shall prepare and file with the SEC a post-effective amendment converting the Form S-4 to a Form S-8 (or file such other appropriate form) registering a number of shares of Parent Common Stock necessary to fulfill Parent’s obligations under this Section 15 .

Stock Options and Other Stock-Based Awards. (ai) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder holders thereof, become fully be converted into a vested and exercisable. With respect option to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of purchase shares of Company Parent Common Stock subject to such Company (a “Parent Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Time for which, as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire”), on the same terms and conditions (except as provided in this Section 5.6(a)(i)) as were applicable under such Company Stock Option (giving effect immediately prior to any terms and conditions resulting from the Transactions)Effective Time, the to purchase that number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, Stock equal to the product of (A) the total number of shares of Company Common Stock subject to such Company Stock Option and (B) the Exchange Ratio Ratio, rounded down to the nearest whole number of shares of Parent Common Stock. The per-share exercise price for the shares of Parent Common Stock issuable upon exercise of such Parent Stock Options will be equal to the quotient determined by dividing (as defined below), at an x) the exercise price per share of Parent Company Common StockStock at which the Company Stock Options were exercisable immediately prior to the Effective Time by (y) the Exchange Ratio, rounded and rounding the resulting per-share exercise price up to the nearest whole cent. Solely with respect to a Company Stock Option granted with an exercise price of less than $40.00 per share of Company Common Stock (which shall have been converted into a Parent Stock Option pursuant to the terms of this Section 5.6(a)(i)), the terms of such Parent Stock Option (as so converted) shall provide that if the employment of the applicable option holder is terminated under circumstances that would entitle such option holder to severance benefits under a severance plan, program or agreement in which such option holder participates (or to which such option holder is a party) as of immediately following the Effective Time (a “Severance Event”) during the period beginning at the Effective Time and ending on the second anniversary thereof, such Parent Stock Option shall remain exercisable until the earlier of (1) the later of (x) the third anniversary of the date of such termination of employment and (y) the date on which the Company Stock Option (which shall have been converted into a Parent Stock Option pursuant to the terms hereof) would cease to be exercisable in accordance with its terms and (2) the expiration of the scheduled term of the Company Stock Option (which shall have been converted into a Parent Stock Option pursuant to the terms hereof). No later than the Effective Time, the Company shall pass such resolutions as are necessary to approve the terms of this Section 5.6(a)(i) . (ii) At the Effective Time, each award of restricted Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (the “Restricted Shares”) and each restricted or deferred stock unit based on shares of Company Common Stock granted under a Company Stock Plan that is outstanding immediately prior to the Effective Time (the “Restricted Stock Units”) shall, automatically and without any action on the part of the holders thereof, vest and be converted, on the same terms and conditions (except as provided in this Section 5.6(a)(ii)) as were applicable under such Restricted Shares and Restricted Stock Units, as applicable, immediately prior to the Effective Time, into a number of shares of Parent Common Stock or units with respect to Parent Common Stock equal to the quotient obtained by dividing product of (A) the aggregate exercise price for total number of shares of Company Common Stock subject to such grant of Restricted Shares or Restricted Stock Units, as applicable, and (B) the Exchange Ratio. (iii) Immediately prior to the Effective Time, each award of performance units with respect to shares of Company Common Stock under a Company Stock Plan that is outstanding immediately prior to the Effective Time (collectively, the “Company Performance Units”) shall, automatically and without any action on the part of the holders thereof, vest and be converted, into the right to receive, immediately prior to the Effective Time, an amount in cash equal to the product of (i) the total number of shares of Company Common Stock subject to such Company Performance Unit, assuming the achievement of all performance goals applicable to such Company Performance Unit at target levels and (ii) the Fair Market Value (as defined in the Amended and Restated Centex Corporation 2003 Equity Incentive Plan) of Company Common Stock Option by on the Exchange Ratio day immediately prior to the Effective Time. (eachiv) At the Effective Time, as so adjustedParent shall assume all the obligations of the Company under the Company Stock Plans, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any each outstanding Company Stock Option to which Section 409A or 421 (a) of and the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of agreements evidencing the Code, respectivelygrants thereof. As soon as practicable following after the Effective Time, Parent shall deliver to the holders of Adjusted Company Stock Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans Plans, and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Company Stock Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii5.6(a)) after giving effect . (v) Parent shall take all corporate action necessary to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes reserve for issuance a sufficient number of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price shares of Parent Common Stock for delivery upon exercise of the Parent Stock Options resulting from the conversion of Company Stock Options assumed by Parent in accordance with this Section 5.6(a) . At or prior to the Effective Time, Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form) with respect to the New York shares of Parent Common Stock Exchange subject to such Parent Stock Options resulting from the conversion of Company Stock Options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the “NYSE”current status of the prospectus or prospectuses contained therein) on the five (5) trading days immediately preceding the Closing Datefor so long as such Parent Stock Options remain outstanding.

Stock Options and Other Stock-Based Awards. (a) Each option Unless otherwise noted, the provisions of this Section 1.6 pertain to purchase shares of all plans sponsored by the Company Common Stock (each, or a “Company Stock Option”) granted under the employee and director stock plans Subsidiary of the Company under which options and other stock-based amounts are awarded, including the plans set forth on Section 1.6(a) of the Company Disclosure Schedule (as defined in Article III), all as amended, and the award agreements thereunder (collectively, the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as . (b) As of the Effective Time, automatically in accordance with the terms of the applicable Company Stock Plans, by virtue of the Merger and without any action on the part of the holder thereofholders of any options or other stock-based awards, become each participant in any of the Company Stock Plans shall fully vested and exercisable. With respect to immediately vest in any options or other stock-based awards awarded under such Company Stock Options:Plans. (ic) each Company Stock Option for which, as As of the Effective Time, by virtue of the Merger Consideration exceeds and without any action on the exercise price per Share shall be canceled at part of the holders thereof, each option to purchase shares of Company Common Stock granted to employees or directors of the Company or any of its Subsidiaries under any of the Company Stock Plans that is outstanding immediately before the Effective Time and(collectively, in exchange therefor, each former holder of such the “Company Stock Option Options”) shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, converted into an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over Per Share Amount less the exercise price per Share under for each such Company Stock Option and (2) the number of shares share of Company Common Stock subject to such Company Option immediately before the Effective Time. To the extent necessary, the Company shall use its commercially reasonable efforts to obtain consents of the participants in the Company Stock Option; andPlans to such treatment. (iid) each Company Stock Option that is outstanding immediately prior With respect to awards of Performance Shares (as defined therein) under the Effective Time Alabama National BanCorporation Performance Share Plan, as amended and restated, and the Alabama National BanCorporation Performance Share and Deferral Plan for whichNon-Employee Directors of Affiliate Banks (collectively, the “Performance Share Plans”), as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share Time such Performance Shares shall be amended converted to cash, and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies cash shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As paid out as soon as practicable following in accordance with the respective terms of the Performance Share Plans (but in no event later than 10 days after the Effective Time). (e) At the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights all deferred amounts held in unit accounts or otherwise pursuant to the respective Company Stock Plans Alabama National BanCorporation Deferral of Compensation Plan for Key Employees, the Alabama National BanCorporation Plan for the Deferral of Compensation for Directors who are not Employees of the Company, the Alabama National BanCorporation Plan for the Deferral of Compensation by Non-Employee Directors of Subsidiary Banks, and the agreements evidencing Amended and Restated Performance Share Plan For Certain Directors of Citizens’ and People’s Bank, N.A. (collectively, the grants of such Adjusted Options“Deferral Plans”), except for deferred amounts as to which the treatment in the Merger is separately agreed to in writing by Buyer and the holder thereof, which amount shall providebe treated as so agreed, among other things, that shall be converted into an obligation to pay cash in accordance with the terms of the Deferral Plans. The Company shall use its commercially reasonable efforts to obtain consents of the participants in the Deferral Plans to such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Datetreatment.

Stock Options and Other Stock-Based Awards. (ai) Each Except as otherwise agreed by Parent and a holder of Company Stock Options with respect to such holder’s Company Stock Options, each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”)Plans or otherwise, whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect be converted into the right to receive at the Effective Time an amount in cash in U.S. dollars equal to the product of (x) the total number of shares of Company Common Stock subject to such Company Stock Options: Option and (iy) each Company Stock Option for whichthe excess, as if any, of the Effective Time, amount of the Merger Consideration exceeds over the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder share of Company Common Stock subject to such Company Stock Option, with the aggregate amount of such payment rounded to the nearest cent (the aggregate amount of such cash hereinafter referred to as the “Option shall be entitled to receiveConsideration”), as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, U.S. state or local or foreign Tax Law with respect to the making of such payment. (ii) equal Except as otherwise agreed by Parent and a holder of a Company Stock-Based Award with respect to such holder’s Company Stock-Based Award, at the product Effective Time, each right of (1) any kind, contingent or accrued, to receive shares of Company Common Stock or benefits measured in whole or in part by the excess, if any, value of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the a number of shares of Company Common Stock subject to such granted under the Company Stock Option; and Plans or Company Benefit Plans or otherwise (iiincluding restricted stock units, phantom units, deferred stock units and dividend equivalents), other than Restricted Shares (as hereinafter defined) each and Company Stock Option that Options (each, other than Restricted Shares and Company Stock Options, a “Company Stock-Based Award”), whether vested or unvested, which is outstanding immediately prior to the Effective Time for whichshall cease to represent a right or award with respect to shares of Company Common Stock, shall become fully vested and shall entitle the holder thereof to receive, at the Effective Time an amount in cash equal to the Merger Consideration in respect of each Share underlying a particular Company Stock-Based Award (the aggregate amount of such cash, together with the Option Consideration, hereinafter referred to as the “Option and Stock-Based Consideration”) less such amounts as are required to be withheld or deducted under the Code or any provision of U.S. state or local Tax Law with respect to the making of such payment. (iii) Except as otherwise agreed by Parent and a holder of Restricted Shares with respect to such holder’s Restricted Shares, immediately prior to the Effective Time, each award of restricted Company Common Stock (the “Restricted Shares”) shall vest in full and be converted into the right to receive the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactionsprovided in Section 2.1(a), less such amounts as are required to be withheld or deducted under the number Code or any provision of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, rounded up to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) U.S. state or local Tax Law with respect to any the making of such payment. (iv) The Compensation and Human Resources Committee of the Board of Directors and/or the Board of Directors of the Company (as applicable) shall make such adjustments and amendments, make such determinations and take all necessary corporation actions with respect to Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options Company Stock-Based Awards and agreements have been assumed by Parent and shall continue in effect on Restricted Shares to implement the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes foregoing provisions of this Section 2.4(a)(ii5.5(a), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date.

Stock Options and Other Stock-Based Awards. (a) Each Except as otherwise mutually agreed by Alcatel and Lucent, at the Effective Time, each outstanding option to purchase shares of Company Common Stock Shares (each, a “Company "Lucent Stock Option”") granted under Lucent's compensation or benefit plans or agreements pursuant to which Shares may be issued (collectively, the employee and director stock plans of "Lucent Stock Option Plans") (excluding any option granted under the Company Lucent 2001 Employee Stock Purchase Plan (the “Company Stock Plans”"ESPP")), whether vested or unvestednot vested, that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, become fully vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Common Stock subject to such Company Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Time for which, as of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option a right to acquire, on the same terms and conditions as were applicable under such Company Lucent Stock Option (giving effect prior to any terms and conditions resulting from the Transactions)Effective Time, the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product number) of Alcatel Ordinary Shares determined by multiplying (x) the number of shares of Company Common Stock Shares subject to such Company Lucent Stock Option and immediately prior to the Effective Time by (y) the Exchange Ratio (as defined below)Ratio, at an exercise price per share Alcatel Ordinary Shares expressed in Euros equal to the product of Parent Common Stock(A) the quotient of (x) the U.S. dollar exercise price per Share otherwise purchasable pursuant to such Lucent Stock Option, rounded divided by (y) the Exchange Ratio, multiplied by (B) the Euro Exchange Rate, rounding the resulting exercise price up to the nearest whole euro cent. The "Euro Exchange Rate" shall equal the Noon Buying Rate for euros as announced by the Federal Reserve Bank of New York for the Closing Date, equal which for the avoidance of doubt shall be computed as euros per one U.S. dollar. In addition, prior to the quotient obtained by dividing Effective Time (but effective as of the aggregate exercise price for Effective Time), Lucent will make any amendments to the shares terms of Company Common Stock subject to such Company Lucent Stock Option Plans that are necessary to give effect to the transactions contemplated by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”)this Section. The adjustments provided Lucent has identified in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a1.04(a) of the Code applies separate disclosure letter delivered by Lucent to Alcatel dated as of the date of this Agreement (the "Lucent Disclosure Letter") each of the Lucent Stock Option Plans. Lucent has not taken, and shall be and are intended not take, any action causing any option holder to be effected have the right to receive a "change in a manner which is consistent with control cash-out" described in Section 409A and 424(a11(b) of the CodeLucent 2003 Long Term Incentive Program, respectivelySection 10(b) of the Lucent 2000 Stock Option Plan or any similar provision of any other Lucent Stock Option Plan. As soon as practicable following The rights to exercise for Alcatel Ordinary Shares into which the Effective Time, Parent shall deliver Lucent Stock Options will be converted will have exercise features (including without limitation net cashless exercise features) comparable to the those provided generally to holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue Alcatel stock options employed in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Datejurisdiction.

Stock Options and Other Stock-Based Awards. (a) Each As of the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each option to purchase shares of Company Republic Common Stock (each, a “Company Stock Option”) granted to employees or directors of Republic or any of its Subsidiaries under the employee and director stock plans any of the Company 1997 Stock Option Plan, 1998 Stock Option Plan, Voluntary Management Stock Accumulation Plan, Incentive Stock Plan and Second Amended and Restated Directors Compensation Plan, all as amended, and the award agreements thereunder (collectively, the “Company "Republic Stock Plans”), whether vested or unvested, ") that is outstanding immediately prior to the Effective Time shall(collectively, the "Republic Options") shall be converted into an option (an "Adjusted Option") to purchase, on the same terms and conditions as applied to each such Republic Option immediately prior to the Effective Time (taking into account any accelerated vesting of such Republic Options in accordance with the terms thereof, including terms approved by the Republic board prior to the date of this Agreement as described on Section 1.6(a) of the Republic Disclosure Schedule (as defined in Article III of this Agreement)), the number of whole shares of Citizens Common Stock that is equal to the number of shares of Republic Common Stock subject to such Republic Option immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share), at an exercise price per share of Citizens Common Stock (rounded up to the nearest whole cent) equal to the exercise price for each such share of Republic Common Stock subject to such Republic Option immediately prior to the Effective Time divided by the Exchange Ratio. (b) As of the Effective Time, automatically each share of Republic Common Stock granted to any employee or director of Republic or any of its Subsidiaries under a Republic Stock Plan that is outstanding and subject to restrictions at the Effective Time (collectively, the "Republic Restricted Shares") shall, by virtue of the Merger and without any action on the part of the holder thereof, become fully vested be converted into the right to receive, on the same terms and exercisable. With conditions as applied to each such Republic Restricted Share immediately prior to the Effective Time (including the same transfer restrictions), the number of whole shares of Citizens Common Stock that is equal to the number of shares of Republic Common Stock subject to such Republic Restricted Share immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share) (the "Citizens Restricted Share Right"); provided, however, that, upon the lapsing of restrictions with respect to each such Company Stock Options: (i) each Company Stock Option for whichCitizens Restricted Share Right in accordance with the terms applicable to the corresponding Republic Restricted Share as in effect immediately prior to the Effective Time, Citizens shall be entitled to deduct and withhold from the Citizens Restricted Share Right such amounts as may be required to be deducted and withheld under the Code and any applicable state or local tax law with respect to the lapsing of such restrictions. Notwithstanding the foregoing, any Republic Restricted Share that is not subject to transfer restrictions as of the Effective Time, based on actions taken by the Republic board prior to the date of this Agreement (as described on Section 1.6(b) of the Republic Disclosure Schedule), shall be converted into the right to receive the Merger Consideration exceeds (less applicable withholding) determined in accordance with Sections 1.4 and 1.5 of this Agreement based on the exercise price per Share shall be canceled at holder's election in accordance with Section 2.1 of this Agreement, and treating such Republic Restricted Shares in the Effective Time and, in exchange therefor, each former holder same manner as all other shares of Republic Common Stock for such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three purposes. (3c) business days following As of the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law each warrant with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the number of shares of Company Republic Common Stock subject granted to such Company any employee or director of Republic or any of its Subsidiaries under a Republic Stock Option; and (ii) each Company Stock Option Plan that is outstanding immediately prior to the Effective Time for which(collectively, as the "Republic Warrants") shall, by virtue of the Effective TimeMerger and without any action on the part of the holder thereof, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option a warrant to acquirepurchase, on the same terms and conditions as were applicable under applied to each such Company Stock Option Republic Warrant immediately prior to the Effective Time (giving effect taking into account any accelerated vesting of such Republic Warrants in accordance with the terms thereof, including terms approved by the Republic board prior to any terms and conditions resulting from the Transactionsdate of this Agreement, as described on Section 1.6(c) of the Republic Disclosure Schedule), the number of whole shares of common stock Citizens Common Stock that is equal to the number of Parent, par value $.01 per share shares of Republic Common Stock subject to such Republic Warrant immediately prior to the Effective Time multiplied by the Exchange Ratio (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Citizens Common Stock, Stock (rounded up to the nearest whole cent, ) equal to the quotient obtained by dividing the aggregate exercise price for the shares each such share of Company Republic Common Stock subject to such Company Stock Option Republic Warrant immediately prior to the Effective Time divided by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”each a "Citizens Warrant"). The adjustments provided in this Section 2.4(a)(ii. (d) with respect to any Company Stock Option to which Section 409A or 421 (a) As of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent Citizens shall deliver assume the obligations and succeed to the holders rights of Adjusted Options appropriate notices setting forth such holders’ rights pursuant Republic under the Republic Stock Plans with respect to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which the Citizens Restricted Share Rights and the Citizens Warrants. Republic and Citizens agree that prior to the Effective Time each of the Republic Stock Plans shall providebe amended, among to the extent possible without requiring shareholder approval of such amendments, (i) if and to the extent necessary and practicable, to reflect the transactions contemplated by this Agreement, including, but not limited to, the conversion of Republic Options, Republic Restricted Shares, Republic Warrants granted to any employee or director of Republic or any of its Subsidiaries under a Republic Stock Plan that is outstanding immediately prior to the Effective Time pursuant to paragraphs (a), (b) and (c) above and the substitution of Citizens for Republic thereunder to the extent appropriate to effectuate the assumption of such Republic Stock Plans by Citizens and (ii) to preclude any automatic or formulaic grant of options, restricted shares or other thingsawards thereunder on or after the date hereof. From and after the Effective Time, that such all references to Republic (other than any references relating to a "change in control" of Republic) in each Republic Stock Plan and in each agreement evidencing any award of Republic Options or Republic Restricted Shares shall be deemed to refer to Citizens, unless Citizens determines otherwise. (e) Citizens shall take all action reasonably necessary or appropriate to have available for issuance or transfer a sufficient number of shares of Citizens Common Stock for delivery upon exercise of the Adjusted Options and agreements have been assumed by Parent and shall continue in effect on or settlement of the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions)Citizens Warrants. For purposes Within two Business Days of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date, Citizens shall file with the SEC a registration statement on Form S-8 (or other appropriate form) registering a number of shares of Citizens Common Stock necessary to fulfill Citizens's obligations under this Section 1.6.

Stock Options and Other Stock-Based Awards. (a) Each As of the Effective Time, the Board of Directors shall take all actions necessary in order that each option to purchase shares of acquire Company Common Stock (each, a “Company Stock Option”) granted under the employee Amended and director stock plans of Restated 1998 Key Employees Stock Compensation Program, the Company Amended and Restated 1998 Directors’ Stock Option Plan, and the 2005 Directors’ Stock Plan (collectively, the “Company Stock Plans”), whether vested or unvested, ) that is outstanding immediately prior to the Effective Time shall(collectively, as the “Company Options”), whether vested or unvested, shall be canceled and shall solely represent the right to receive from the Company in exchange an amount in cash equal to the product of (i) the number of Shares subject to such option, and (ii) the excess, if any, of the Merger Consideration, without interest, over the exercise price per share subject to such option, less any required withholding Taxes. (b) As of the Effective Time, automatically the Board of Directors shall take all actions necessary in order that each unvested restricted stock unit with respect to shares of Company Common Stock granted under the 2005 Directors’ Stock Plan that is outstanding immediately prior to the Effective Time (collectively, the “Company RSUs”) shall, by virtue of the Merger and without any action on the part of the holder thereof, become fully vested and exercisable. With respect to such Company Stock Options: (i) each Company Stock Option for which, as of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled and shall solely represent the right to receive from the Company in exchange, at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, or as soon as practicable, but in no event later than three (3) business days following the Effective Timepracticable thereafter, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2i) the number of shares of Company Common Stock Shares subject to such Company Stock Option; and RSU and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Time for whichMerger Consideration, as without interest, less any required withholding Taxes. (c) As of the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of all amounts denominated in Company Common Stock subject and held in participant accounts (collectively, the “Company Deferred Equity Units”) either pursuant to such Company’s Key Employee Stock Bonus Plan or the 1998 Key Employee Stock Compensation Plan, or pursuant to any other nonqualified deferred compensation program or any individual deferred compensation agreements (collectively, the “Company Stock Option Deferred Equity Unit Plans”) shall, by virtue of the Merger and without any action on the Exchange Ratio (as defined below)part of the holder thereof, at an exercise price per share of Parent Common Stockbe converted into the right to receive the Merger Consideration, rounded up without interest, payable to the nearest whole cent, equal to holder thereof at the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, Effective Time or as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Timethereafter, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments less any required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Datewithholding Taxes.

Stock Options and Other Stock-Based Awards. (a) Each option to purchase shares of Company Common Stock (each, a “Company Stock Option”) granted under the employee and director stock plans As of the Company (the “Company Stock Plans”)Acceptance Time, whether vested or unvested, that is outstanding immediately prior to the Effective Time shall, as by virtue of the Effective Time, automatically consummation of the Offer and without any action on the part of the holder holders thereof, become fully vested and exercisable. With respect each option to such purchase shares of Company Common Stock Options: (i) each Company Stock Option for which, as granted to employees or directors of the Effective Company or any of its Subsidiaries under any Company Benefit Plan that is outstanding immediately prior to the Acceptance Time, whether vested or unvested (collectively, the Merger Consideration exceeds the exercise price per Share “Company Options”) shall be canceled cancelled and converted into the right of the holder thereof to receive from the Parent, and Parent shall pay or cause to be paid to each such holder of Company Options, at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Acceptance Time, a lump sum cash payment equal to an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1i) the number of shares of Company Common Stock subject to such Company Option immediately prior to the Acceptance Time and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share under share of Company Common Stock of such Company Stock Option immediately prior to the Acceptance Time, provided that if any holder of a Company Option notifies the Company, in writing, at least 10 business days prior to the Acceptance Time of his or her irrevocable election to have such Company Options assumed by Parent as of the Acceptance Time, each such Company Option held by such person shall be converted into an option (an “Adjusted Option”) to purchase, on the same terms and conditions as applied to each such Company Option immediately prior to the Acceptance Time, the number of whole shares of common stock, par value $0.01 per share, of Parent (2the “Parent Common Stock”) that is equal to the number of shares of Company Common Stock subject to such Company Stock Option; and (ii) each Company Stock Option that is outstanding immediately prior to the Effective Acceptance Time for which, as of multiplied by the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option Incentive Award Exchange Ratio (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Common Stock, Stock (rounded up to the nearest whole cent, ) equal to the quotient obtained by dividing the aggregate exercise price for the shares of each such share of Company Common Stock subject to such Company Stock Option immediately prior to the Acceptance Time divided by the Incentive Award Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions)Ratio. For purposes of this Section 2.4(a)(ii)Agreement, the “Incentive Award Exchange Ratio” shall mean be the Merger Consideration quotient of (x) divided by (y), where (x) is the volume weighted average per-per share closing price of the Company Common Stock at the Acceptance Time (or, if such date is not a trading day, the trading day immediately preceding the Acceptance Time) on the NYSE and (y) is the per share closing price of Parent Common Stock on at the New York Stock Exchange Acceptance Time (or, if such date is not a trading day, the “NYSE”trading day immediately preceding the Acceptance Time) on the five (5) trading days immediately preceding the Closing DateNYSE.

Stock Options and Other Stock-Based Awards. (a) Each option Unless otherwise noted, the provisions of this Section 1.6 pertain to purchase shares of Company Common all plans sponsored by First Charter under which options and other stock-based amounts are awarded, including: (i) Restricted Stock Award Program, (eachii) Comprehensive Stock Option Plan, a “Company (iii) 1999 Employee Stock Option”Purchase Plan, (iv) granted under the employee 2000 Omnibus Stock Option and director stock plans of the Company Award Plan (the “Company 2000 Plan”), (v) Stock Option Plan for Non-Employee Directors and (vi) Carolina First Bancshares, Inc. Amended 1990 Stock Option Plan, all as amended, and the award agreements thereunder (collectively, the “First Charter Stock Plans”); provided, whether vested or unvestedhowever, that is outstanding immediately prior any accelerated vesting performed pursuant to this Section 1.6 shall only be performed if required by the Effective Time shall, terms of the applicable First Charter Stock Plan as in effect on the date hereof without any further action by First Charter. (b) As of the Effective Time, automatically in accordance with the terms of the applicable First Charter Stock Plans, by virtue of the Merger and without any action on the part of the holder thereofholders of any options or other stock-based awards, become each participant in any of the First Charter Stock Plans shall fully vested and exercisable. With respect to immediately vest in any options or other stock-based awards awarded under such Company First Charter Stock Options:Plans. (ic) each Company Stock Option for which, as As of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, by virtue of the Merger Consideration over and without any action on the exercise price per Share under such Company Stock Option and (2) part of the number of holders thereof, each option to purchase shares of Company First Charter Common Stock subject granted to such Company employees or directors of First Charter or any of its Subsidiaries under any of the First Charter Stock Option; and (ii) each Company Stock Option Plans that is outstanding immediately prior to before the Effective Time for which, as of the Effective Time(collectively, the Merger Consideration does not exceed the exercise price per Share “First Charter Options”) shall be amended and converted into an option (an “Adjusted Option”) to acquirepurchase, on the same terms and conditions as were applicable under applied to each such Company Stock First Charter Option immediately before the Effective Time (giving effect to taking into account any accelerated vesting of such First Charter Options in accordance with the terms and conditions resulting from thereof, including terms approved by the TransactionsFirst Charter Board before the date of this Agreement as described on Section 1.6(c) of the First Charter Disclosure Schedule (as defined in Article III), the number of whole shares of common stock Fifth Third Common Stock that is equal to the number of Parent, par value $.01 per share shares of First Charter Common Stock subject to such First Charter Option immediately before the Effective Time multiplied by the Conversion Number (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Fifth Third Common Stock, Stock (rounded up to the nearest whole cent, ) equal to the quotient obtained by dividing the aggregate exercise price for the shares each such share of Company First Charter Common Stock subject to such Company Stock First Charter Option immediately before the Effective Time divided by the Exchange Ratio Conversion Number. (eachd) With respect to awards of Performance Shares (as defined therein) under the 2000 Plan, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(iiof the Effective Time (i) all performance objectives with respect to any Company Stock Option such Performance Shares shall be deemed to which Section 409A or 421 (a) be satisfied to the extent necessary to earn 100% of the Code applies Performance Shares, (ii) the performance period shall be and are intended deemed to be effected complete and (iii) such Performance Shares shall be converted to Actual PSAs (as defined in a manner which is consistent with Section 409A the Performance Share Award Agreements under the 2000 Plan) and 424(a(iv) of the Code, respectively. As Actual PSAs shall be paid out as soon as practicable following in accordance with the 2000 Plan (but in no event later than 10 days after the Effective Time). (e) With respect to awards of Restricted Stock (as defined in each of the referenced plans) under the 2000 Plan and the Restricted Stock Award Program, as of the Effective Time (i) all restrictions with respect to such Restricted Stock shall be deemed to have lapsed, (ii) the restriction period shall be deemed to have ended and (iii) such Restricted Stock shall entitle the participant to make an election pursuant to Section 2.1. (f) As of the Effective Time, Parent Fifth Third shall deliver assume the obligations and succeed to the holders rights of First Charter under the First Charter Stock Plans with respect to the Adjusted Options. First Charter and Fifth Third agree that before the Effective Time each of the First Charter Stock Plans shall be amended, to the extent possible without requiring shareholder approval of such amendments, if and to the extent necessary and practicable, to reflect the transactions contemplated by this Agreement, including the conversion of First Charter Options appropriate notices setting forth such holders’ rights granted to any employee or director of First Charter or any of its Subsidiaries under a First Charter Stock Plan that is outstanding immediately before the Effective Time pursuant to this Section 1.6 and the respective Company substitution of Fifth Third for First Charter thereunder to the extent appropriate to effectuate the assumption of such First Charter Stock Plans by Fifth Third. From and after the agreements Effective Time, all references to First Charter (other than any references relating to a “change in control” of First Charter) in each First Charter Stock Plan and in each agreement evidencing any award of First Charter Options shall be deemed to refer to Fifth Third, unless Fifth Third determines otherwise. (g) Fifth Third shall take all action reasonably necessary or appropriate to have available for issuance or transfer a sufficient number of shares of Fifth Third Common Stock for delivery upon exercise of the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes Within two business days of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date, Fifth Third shall file with the SEC a registration statement on Form S-8 (or other appropriate form) registering a number of shares of Fifth Third Common Stock necessary to fulfill Fifth Third’s obligations under this Section 1.6.

Stock Options and Other Stock-Based Awards. (a) Each option Unless otherwise noted, the provisions of this Section 1.6 pertain to purchase shares of Company Common all plans sponsored by First Charter under which options and other stock-based amounts are awarded, including: (i) Restricted Stock Award Program, (eachii) Comprehensive Stock Option Plan, a “Company (iii) 1999 Employee Stock Option”Purchase Plan, (iv) granted under the employee 2000 Omnibus Stock Option and director stock plans of the Company Award Plan (the “Company 2000 Plan”), (v) Stock Option Plan for Non-Employee Directors and (vi) Carolina First Bancshares, Inc. Amended 1990 Stock Option Plan, all as amended, and the award agreements thereunder (collectively, the “First Charter Stock Plans”); provided, whether vested or unvestedhowever, that is outstanding immediately prior any accelerated vesting performed pursuant to this Section 1.6 shall only be performed if required by the Effective Time shall, terms of the applicable First Charter Stock Plan as in effect on the date hereof without any further action by First Charter. (b) As of the Effective Time, automatically in accordance with the terms of the applicable First Charter Stock Plans, by virtue of the Merger and without any action on the part of the holder thereofholders of any options or other stock-based awards, become each participant in any of the First Charter Stock Plans shall fully vested and exercisable. With respect to immediately vest in any options or other stock-based awards awarded under such Company First Charter Stock Options:Plans. (ic) each Company Stock Option for which, as As of the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder of such Company Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1) the excess, if any, by virtue of the Merger Consideration over and without any action on the exercise price per Share under such Company Stock Option and (2) part of the number of holders thereof, each option to purchase shares of Company First Charter Common Stock subject granted to such Company employees or directors of First Charter or any of its Subsidiaries under any of the First Charter Stock Option; and (ii) each Company Stock Option Plans that is outstanding immediately prior to before the Effective Time for which, as of the Effective Time(collectively, the Merger Consideration does not exceed the exercise price per Share “First Charter Options”) shall be amended and converted into an option (an “Adjusted Option”) to acquirepurchase, on the same terms and conditions as were applicable under applied to each such Company Stock First Charter Option immediately before the Effective Time (giving effect to taking into account any accelerated vesting of such First Charter Options in accordance with the terms and conditions resulting from thereof, including terms approved by the TransactionsFirst Charter Board before the date of this Agreement as described on Section 1.6(c) of the First Charter Disclosure Schedule (as defined in Article III)), the number of whole shares of common stock Fifth Third Common Stock that is equal to the number of Parent, par value $.01 per share shares of First Charter Common Stock subject to such First Charter Option immediately before the Effective Time multiplied by the Conversion Number (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Exchange Ratio (as defined below), at an exercise price per share of Parent Fifth Third Common Stock, Stock (rounded up to the nearest whole cent, ) equal to the quotient obtained by dividing the aggregate exercise price for the shares each such share of Company First Charter Common Stock subject to such Company Stock First Charter Option immediately before the Effective Time divided by the Exchange Ratio Conversion Number. (eachd) With respect to awards of Performance Shares (as defined therein) under the 2000 Plan, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(iiof the Effective Time (i) all performance objectives with respect to any Company Stock Option such Performance Shares shall be deemed to which Section 409A or 421 (a) be satisfied to the extent necessary to earn 100% of the Code applies Performance Shares, (ii) the performance period shall be and are intended deemed to be effected complete and (iii) such Performance Shares shall be converted to Actual PSAs (as defined in a manner which is consistent with Section 409A the Performance Share Award Agreements under the 2000 Plan) and 424(a(iv) of the Code, respectively. As Actual PSAs shall be paid out as soon as practicable following in accordance with the 2000 Plan (but in no event later than 10 days after the Effective Time). (e) With respect to awards of Restricted Stock (as defined in each of the referenced plans) under the 2000 Plan and the Restricted Stock Award Program, as of the Effective Time (i) all restrictions with respect to such Restricted Stock shall be deemed to have lapsed, (ii) the restriction period shall be deemed to have ended and (iii) such Restricted Stock shall entitle the participant to make an election pursuant to Section 2.1. (f) As of the Effective Time, Parent Fifth Third shall deliver assume the obligations and succeed to the holders rights of First Charter under the First Charter Stock Plans with respect to the Adjusted Options. First Charter and Fifth Third agree that before the Effective Time each of the First Charter Stock Plans shall be amended, to the extent possible without requiring shareholder approval of such amendments, if and to the extent necessary and practicable, to reflect the transactions contemplated by this Agreement, including the conversion of First Charter Options appropriate notices setting forth such holders’ rights granted to any employee or director of First Charter or any of its Subsidiaries under a First Charter Stock Plan that is outstanding immediately before the Effective Time pursuant to this Section 1.6 and the respective Company substitution of Fifth Third for First Charter thereunder to the extent appropriate to effectuate the assumption of such First Charter Stock Plans by Fifth Third. From and after the agreements Effective Time, all references to First Charter (other than any references relating to a “change in control” of First Charter) in each First Charter Stock Plan and in each agreement evidencing any award of First Charter Options shall be deemed to refer to Fifth Third, unless Fifth Third determines otherwise. (g) Fifth Third shall take all action reasonably necessary or appropriate to have available for issuance or transfer a sufficient number of shares of Fifth Third Common Stock for delivery upon exercise of the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions). For purposes Within two business days of this Section 2.4(a)(ii), “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date, Fifth Third shall file with the SEC a registration statement on Form S-8 (or other appropriate form) registering a number of shares of Fifth Third Common Stock necessary to fulfill Fifth Third’s obligations under this Section 1.6.

Stock Options and Other Stock-Based Awards. (a) Each Unless otherwise expressly provided in this Agreement, the provisions of this Section 1.5 pertain to all plans sponsored by Talmer under which options, restricted stock and other stock-based awards are granted, and the award agreements thereunder (collectively, the “Talmer Stock Plans”). (b) As of the Effective Time, each outstanding option to purchase a share or shares of Company Talmer Common Stock (each, a “Company Talmer Stock Option”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding excluding any Talmer Stock Options cancelled immediately prior to the Effective Time shallin accordance with Section 1.5(c)) (the “Cancelled Talmer Stock Options”), as shall be assumed by Chemical substantially in accordance with the terms of the Effective TimeTalmer Stock Plans and the option grants or other award agreements by which they are evidenced in accordance with the terms of the applicable Talmer Stock Plans, automatically such that after the Merger and without any action on the part of the holder thereofholders of such Talmer Stock Options, the Talmer Stock Options shall be converted into and become fully vested and exercisable. With stock options with respect to such Company Chemical Common Stock Options: (each, a “Surviving Corporation Stock Option”). From and after the Effective Time, (i) each Company Talmer Stock Option may be exercised solely for which, as shares of Chemical Common Stock; (ii) the Effective Time, the Merger Consideration exceeds the exercise price per Share shall be canceled at the Effective Time and, in exchange therefor, each former holder number of shares of Chemical Common Stock subject to such Company Talmer Stock Option shall be entitled to receive, as soon as practicable, but in no event later than three (3) business days following the Effective Time, an amount in cash (without interest, and less such amounts as are required to be withheld or deducted under the Code or any provision of state, local or foreign Law with respect to the making of such payment) equal to the product of (1A) the excess, if any, of the Merger Consideration over the exercise price per Share under such Company Stock Option and (2) the total number of shares of Company Talmer Common Stock subject to such Company Stock Option; and (ii) each Company Talmer Stock Option that is outstanding multiplied by (B) the Equity Award Exchange Ratio, rounded up or down, if necessary, to the nearest whole share of Chemical Common Stock; and (iii) the per-share exercise price under each such Talmer Stock Option shall be adjusted to equal the quotient of (x) the exercise price per share of such Talmer Stock Option at which such Talmer Stock Option was exercisable immediately prior to the Effective Time for which, as of divided by (y) the Effective Time, the Merger Consideration does not exceed the exercise price per Share shall be amended and converted into an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (giving effect to any terms and conditions resulting from the Transactions), the number of shares of common stock of Parent, par value $.01 per share (“Parent Common Stock”), rounded down to the nearest whole share, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option and the Equity Award Exchange Ratio (as defined below), at an exercise price per share of Parent Common StockRatio, rounded up or down to the nearest whole cent, equal to the quotient obtained by dividing the aggregate exercise price for the shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio (each, as so adjusted, an “Adjusted Option”). The adjustments provided in this Section 2.4(a)(ii) with respect to any Company Stock Option to which Section 409A or 421 (a) of the Code applies shall be and are intended to be effected in a manner which is consistent with Section 409A and 424(a) of the Code, respectively. As soon as practicable following the Effective Time, Parent shall deliver to the holders of Adjusted Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Adjusted Options, which shall provide, among other things, that such Adjusted Options and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.4(a)(ii) after giving effect to the Merger and giving effect to any terms and conditions resulting from the Transactions)if necessary. For purposes of this Section 2.4(a)(ii)Agreement, “Exchange Ratio” shall mean the Merger Consideration divided by the volume weighted average per-share trading price of Parent Common Stock on the New York Stock Exchange (the “NYSE”) on the five (5) trading days immediately preceding the Closing Date.Equity