Common use of Stock Options; Employee Benefits Clause in Contracts

Stock Options; Employee Benefits. (a) As of the Effective Time, (i) each outstanding option to purchase shares of Company Common Stock (a "STOCK OPTION") granted under any plan or arrangement providing for the grant of options to purchase shares of Company Common Stock to current or former officers, directors, employees or consultants of the Company or its Subsidiaries (the "COMPANY STOCK PLANS"), whether vested or unvested, shall be assumed by Parent and converted into an option (such option, an "ADJUSTED OPTION") to acquire, on the same terms and conditions as were applicable under the Stock Option, the number of shares of Parent Common Stock (rounded up to the nearest whole share) determined by multiplying the number of shares of Company Common Stock subject to such Stock Option by the Option Exchange Ratio, at a price per share of Parent Common Stock equal to (A) the aggregate exercise price for the shares of Company Common Stock otherwise purchasable pursuant to such Stock Option (assuming all conditions to the exercise of such Stock Option had then been met) divided by (B) the aggregate number of shares of Parent Common Stock deemed purchasable pursuant to such Stock Option; provided, that, such exercise price shall be rounded up to the nearest whole cent. In addition, any and all repurchase rights under any Company Stock Plan held by the Company on the shares of Company Common Stock shall, to the extent permitted by Law, be assigned to Parent and shall be converted into repurchase rights held by Parent as the corresponding shares of Parent Common Stock. The Company represents that, prior to the Effective Time, it shall take the necessary and appropriate actions to evidence that the option treatment described in this Section 5.6(a) is the appropriate adjustment as authorized and permitted under the terms of the plans and agreements pursuant to which the Stock Options were granted. For purposes of this Agreement, the "OPTION EXCHANGE RATIO" shall equal the quotient of (i) Ten Dollars and Fifty Cents ($10.50) divided by (ii) the Parent Market Price. (b) In the case of any Stock Options that are "incentive stock options" as defined in Section 422 of the Code, the exercise price, the number of shares of Parent Common Stock and the terms and conditions of such Stock Options shall be determined in accordance with Section 5.6(a) hereof, subject to such adjustments as are necessary to comply with the requirements of Section 424(a) of the Code. (c) Parent shall, prior to the Effective Time, take all action necessary so that, at the Effective Time, by virtue of the Merger and without the need of any further corporate action, Parent shall assume the Company Stock Plans with the result that all obligations of the Company under the Company Stock Plans with respect to Stock Options outstanding at the Effective Time, shall be obligations of Parent, and all Adjusted Options shall be exercisable, on the same terms as were applicable under the Stock Options, for shares of Parent Common Stock following the Effective Time, subject to this Section 5.6. (d) At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issue a sufficient number of shares of Parent Common Stock for delivery upon exercise of Adjusted Options. As soon as practicable after the Effective Time, Parent shall file a Registration Statement on Form S-1, Fxxx X-0 xx Xxrm S-8 as the case may be (or any successor or other appropriate forms), with respect to the shares of Parent Common Stock subject to such Adjusted Options, and shall maintain the effectiveness of such registration statement and the current status of the prospectus or prospectuses contained therein, for so long as such Adjusted Options remain outstanding. Following the Effective Time, Parent shall use its reasonable best efforts to provide that holders of Adjusted Options do not experience delays in exercising and settling their Adjusted Options. (e) Parent shall take, and shall cause the Surviving Corporation and its Subsidiaries to take, the following actions: (i) waive any limitations regarding preexisting conditions and eligibility waiting periods under any health benefit plan maintained by any of them for the benefit of individuals who are employees of the Company and its Subsidiaries immediately prior to the Effective Time (the "EMPLOYEES") to the extent such preexisting condition or waiting period did not apply to the Employee under a comparable plan of the Company or its Subsidiary immediately prior to the Effective Time, (ii) provide each Employee with credit for any co-payments and deductibles paid prior to the Effective Time for the calendar year in which the Effective Time occurs, in satisfying any applicable deductible or out-of-pocket requirements under such health plans, and (iii) for eligibility, vesting and benefit accrual purposes (but not for purposes of benefit accruals under any defined benefit pension plan and not to the extent such crediting would result in a duplication of benefits) under all compensation and benefit plans and policies applicable to the Employees, treat all service by the Employees with the Company or any of its Subsidiaries and their predecessor entities before the Effective Time as service with Parent and its Subsidiaries. Parent shall cause the Surviving Corporation to honor all employment, retention and severance arrangements (including, without limitation, those set forth on Section 5.6(e) of the Company Disclosure Memorandum) and all obligations to current and former employees of the Company and its Subsidiaries thereunder. Parent shall take all actions necessary to cause the Surviving Corporation and its Subsidiaries to satisfy the obligations listed in Section 5.6(e) of the Company Disclosure Memorandum. (f) The Company shall terminate its Employee Stock Purchase Plan (the "ESPP") in accordance with its terms to take effect as of or immediately prior to the Effective Time. The offerings under the ESPP are currently suspended, and the Company shall not commence a new offering under its ESPP after the date of this Agreement. (g) The provisions of this Section 5.6 shall not create in any employee or former employee of the Company or any of its Subsidiaries any rights to employment or continued employment with Parent, the Surviving Corporation, the Company or any of their respective Subsidiaries.

Stock Options; Employee Benefits. (a) As of the Effective Time, (i) each outstanding option to purchase shares of Company Common Stock (a "STOCK OPTIONStock Option") granted under any plan or arrangement providing for the grant of options to purchase shares of Company Common Stock to current or former officers, directors, employees or consultants of the Company or its Subsidiaries (the "COMPANY STOCK PLANSCompany Stock Plans"), whether vested or unvested, shall be assumed by Parent and converted into an option (such option, an "ADJUSTED OPTIONAdjusted Option") to acquire, on the same terms and conditions as were applicable under the Stock Option, the number of shares of Parent Common Stock (rounded up to the nearest whole share) determined by multiplying the number of shares of Company Common Stock subject to such Stock Option by the Option Exchange Ratio, at a price per share of Parent Common Stock equal to (A) the aggregate exercise price for the shares of Company Common Stock otherwise purchasable pursuant to such Stock Option (assuming all conditions to the exercise of such Stock Option had then been met) divided by (B) the aggregate number of shares of Parent Common Stock deemed purchasable pursuant to such Stock Option; provided, that, such exercise price shall be rounded up to the nearest whole cent. In addition, any and all repurchase rights under any Company Stock Plan held by the Company on the shares of Company Common Stock shall, to the extent permitted by Law, be assigned to Parent and shall be converted into repurchase rights held by Parent as the corresponding shares of Parent Common Stock. The Company represents that, prior to the Effective Time, it shall take the necessary and appropriate actions to evidence that the option treatment described in this Section 5.6(a) is the appropriate adjustment as authorized and permitted under the terms of the plans and agreements pursuant to which the Stock Options were granted. For purposes of this Agreement, the "OPTION EXCHANGE RATIOOption Exchange Ratio" shall equal the quotient of (i) Ten Dollars and Fifty Cents ($10.50) divided by (ii) the Parent Market Price. (b) In the case of any Stock Options that are "incentive stock options" as defined in Section 422 of the Code, the exercise price, the number of shares of Parent Common Stock and the terms and conditions of such Stock Options shall be determined in accordance with Section 5.6(a) hereof, subject to such adjustments as are necessary to comply with the requirements of Section 424(a) of the Code. (c) Parent shall, prior to the Effective Time, take all action necessary so that, at the Effective Time, by virtue of the Merger and without the need of any further corporate action, Parent shall assume the Company Stock Plans with the result that all obligations of the Company under the Company Stock Plans with respect to Stock Options outstanding at the Effective Time, shall be obligations of Parent, and all Adjusted Options shall be exercisable, on the same terms as were applicable under the Stock Options, for shares of Parent Common Stock following the Effective Time, subject to this Section 5.6. (d) At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issue a sufficient number of shares of Parent Common Stock for delivery upon exercise of Adjusted Options. As soon as practicable after the Effective Time, Parent shall file a Registration Statement on Form S-1, Fxxx X-0 xx Xxrm S-8 as the case may be (or any successor or other appropriate forms), with respect to the shares of Parent Common Stock subject to such Adjusted Options, and shall maintain the effectiveness of such registration statement and the current status of the prospectus or prospectuses contained therein, for so long as such Adjusted Options remain outstanding. Following the Effective Time, Parent shall use its reasonable best efforts to provide that holders of Adjusted Options do not experience delays in exercising and settling their Adjusted Options. (e) Parent shall take, and shall cause the Surviving Corporation and its Subsidiaries to take, the following actions: (i) waive any limitations regarding preexisting conditions and eligibility waiting periods under any health benefit plan maintained by any of them for the benefit of individuals who are employees of the Company and its Subsidiaries immediately prior to the Effective Time (the "EMPLOYEES") to the extent such preexisting condition or waiting period did not apply to the Employee under a comparable plan of the Company or its Subsidiary immediately prior to the Effective Time, (ii) provide each Employee with credit for any co-payments and deductibles paid prior to the Effective Time for the calendar year in which the Effective Time occurs, in satisfying any applicable deductible or out-of-pocket requirements under such health plans, and (iii) for eligibility, vesting and benefit accrual purposes (but not for purposes of benefit accruals under any defined benefit pension plan and not to the extent such crediting would result in a duplication of benefits) under all compensation and benefit plans and policies applicable to the Employees, treat all service by the Employees with the Company or any of its Subsidiaries and their predecessor entities before the Effective Time as service with Parent and its Subsidiaries. Parent shall cause the Surviving Corporation to honor all employment, retention and severance arrangements (including, without limitation, those set forth on Section 5.6(e) of the Company Disclosure Memorandum) and all obligations to current and former employees of the Company and its Subsidiaries thereunder. Parent shall take all actions necessary to cause the Surviving Corporation and its Subsidiaries to satisfy the obligations listed in Section 5.6(e) of the Company Disclosure Memorandum. (f) The Company shall terminate its Employee Stock Purchase Plan (the "ESPP") in accordance with its terms to take effect as of or immediately prior to the Effective Time. The offerings under the ESPP are currently suspended, and the Company shall not commence a new offering under its ESPP after the date of this Agreement. (g) The provisions of this Section 5.6 shall not create in any employee or former employee of the Company or any of its Subsidiaries any rights to employment or continued employment with Parent, the Surviving Corporation, the Company or any of their respective Subsidiaries.

Stock Options; Employee Benefits. (a) As of the Effective Time, (i) each outstanding option to purchase shares of Company Common Stock (a "STOCK OPTION") granted under any plan or arrangement providing for the grant of options to purchase shares of Company Common Stock to current or former officers, directors, employees or consultants of the Company or its Subsidiaries (the "COMPANY STOCK PLANS"), whether vested or unvested, shall be assumed by Parent and converted into an option (such option, an "ADJUSTED OPTION") to acquire, on the same terms and conditions as were applicable under the Stock Option, the number of shares of Parent Common Stock (rounded up to the nearest whole share) determined by multiplying the number of shares of Company Common Stock subject to such Stock Option by the Option Exchange Ratio, at a price per share of Parent Common Stock equal to (A) the aggregate exercise price for the shares of Company Common Stock otherwise purchasable pursuant to such Stock Option (assuming all conditions to the exercise of such Stock Option had then been met) divided by (B) the aggregate number of shares of Parent Common Stock deemed purchasable pursuant to such Stock OptionOption (each, as so adjusted, an "ADJUSTED OPTION"); provided, that, PROVIDED that such exercise price shall be rounded up to the nearest whole cent. In addition, cent and (ii) any and all repurchase rights under any Company Stock Plan held by the Company on the shares of Company Common Stock shall, to the extent permitted by Lawlaw, be assigned to Parent and shall be converted into repurchase rights held by Parent as the corresponding shares of Parent Common Stock. The Company represents that, prior to the Effective Time, it shall take the necessary and appropriate actions to evidence that the option treatment described in this Section 5.6(a) is the appropriate adjustment as authorized and permitted under the terms of the plans and agreements pursuant to which the Stock Options were granted. For purposes of this Agreement, the "OPTION EXCHANGE RATIO" shall equal the quotient of (i) Ten Dollars and Fifty Cents ($10.50) divided by (ii) the Parent Market Price. (b) In the case of The adjustments provided herein with respect to any Stock Options that are "incentive stock options" as defined in Section 422 of the Code, the exercise price, the number of shares of Parent Common Stock and the terms and conditions of such Stock Options Code shall be determined and are intended to be effected in accordance a manner which is consistent with Section 5.6(a) hereof, subject to such adjustments as are necessary to comply with the requirements of Section 424(a) of the Code. (c) Parent shall, prior to the Effective Time, take all action necessary so that, at the Effective Time, by virtue of the Merger and without the need of any further corporate action, Parent shall assume the Company Stock Plans with the result that all obligations of the Company under the Company Stock Plans with respect to Stock Options outstanding at the Effective Time, shall be obligations of Parent, and all Adjusted Options shall be exercisable, on the same terms as were applicable under the Stock Options, for shares of Parent Common Stock following the Effective Time, subject to this Section 5.6. (d) At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issue a sufficient number of shares of Parent Common Stock for delivery upon exercise of Adjusted Options. As soon as practicable after the Effective Time, Parent shall file a Registration Statement on Form S-1X-0, Fxxx Xxxx X-0 xx Xxrm or Form S-8 as the case may be (or any successor or other appropriate forms), with respect to the shares of Parent Common Stock subject to such Adjusted Options, and shall maintain the effectiveness of such registration statement and the current status of the prospectus or prospectuses contained therein, for so long as such Adjusted Options remain outstanding. Following the Effective Time, Parent shall use its reasonable best efforts to provide that holders of Adjusted Options do not experience delays in exercising and settling their Adjusted Options. (e) [Reserved] (f) Parent shall take, and shall cause the Surviving Corporation and its Subsidiaries to take, the following actions: (i) waive any limitations regarding preexisting pre-existing conditions and eligibility waiting periods under any health benefit plan maintained by any of them for the benefit of individuals who are employees of the Company and its Subsidiaries immediately prior to the Effective Time (the "EMPLOYEES") to the extent such preexisting pre-existing condition or waiting period did not 42 apply to the Employee under a comparable plan of the Company or its Subsidiary immediately prior to the Effective TimeTime (or the date the Employees become eligible to receive benefits under Parent's plans following the Continuation Period), (ii) provide each Employee with credit for any co-payments and deductibles paid prior to the Effective Time for the calendar year in which the Effective Time occursoccurs (or the date the Employees become eligible to receive benefits under Parent's plans following the Continuation Period), in satisfying any applicable deductible or out-of-pocket requirements under such health plans, and (iii) for eligibility, vesting and benefit accrual purposes (but not for purposes of benefit accruals under any defined benefit pension plan and not to the extent such crediting would result in a duplication of benefitsplan) under all compensation and benefit plans and policies applicable to the Employees, treat all service by the Employees with the Company or any of its Subsidiaries and their predecessor entities before the Effective Time as service with Parent and its Subsidiaries. Parent shall cause the Surviving Corporation to honor all employment, retention and severance arrangements (including, without limitation, those set forth on Section 5.6(e5.6(f) of the Company Disclosure MemorandumSchedule) and all obligations to current and former employees of the Company and its Subsidiaries thereunder. Parent shall take all actions necessary to cause the Surviving Corporation and its Subsidiaries to satisfy the obligations listed in Section 5.6(e5.6(f) of the Company Disclosure Memorandum. (fg) The Company shall terminate its Employee Stock Purchase Plan (the "ESPP") in accordance with its terms to take effect as of or immediately prior to the Effective Time. The offerings under the ESPP are currently suspended, and the Company shall not commence a new offering under its ESPP Employee Stock Purchase Plan after the date of this Agreement. (gh) The provisions of this Section 5.6 shall not create in any employee or former employee of the Company or any of its Subsidiaries any rights to employment or continued employment with Parent, the Surviving Corporation, the Company or any of their respective Subsidiaries.

Stock Options; Employee Benefits. (a) As of At the Effective Time, the Parent shall assume the Compete, Inc. Employees' Stock Option Plan (the "Company Stock Option Plan") and, subject to the adjustments provided below with respect to the Company Accelerated Options, the Parent shall assume all outstanding options granted pursuant to the Company Stock Option Plan and each such assumed option shall become and represent an option (an "Adjusted Option") (i) each outstanding option to purchase shares of Company Common Stock (a "STOCK OPTION") granted under any plan or arrangement providing for the grant of options to purchase shares of Company Common Stock to current or former officers, directors, employees or consultants of the Company or its Subsidiaries (the "COMPANY STOCK PLANS"), whether vested or unvested, shall be assumed by Parent and converted into an option (such option, an "ADJUSTED OPTION") to acquire, on the same terms and conditions as were applicable under the Stock Option, the number of shares of Parent Common Stock (rounded up to the nearest whole share) determined by multiplying (A) the number of shares of Parent Common Stock to be issued upon conversion of one share of Company Common Stock pursuant to Section 1.05(a) of this Agreement (assuming the use of the Cash Per Share Price and the Note Per Share Price to purchase Parent Common Stock (valued at the Effective Time calculated in the manner described in Section 1.05(d)) by (B) the number of shares of Company Common Stock subject to such Stock Option by assumed option immediately prior to the Option Exchange Ratio, Effective Time and (ii) at a an exercise price per share of Parent Common Company Stock equal to determined by dividing (AX) the aggregate exercise price for the shares of Company Common Stock otherwise purchasable pursuant subject to such Stock Option (assuming all conditions assumed option immediately prior to the exercise of such Stock Option had then been met) divided Effective Time by (BY) the aggregate number of shares of Parent Common Stock deemed purchasable pursuant subject to such Stock Option; provided, that, such exercise price shall be rounded up Adjusted Option at the Effective Time and rounding the resulting quotient down to the nearest whole cent. In addition; provided, any and all repurchase rights under any Company Stock Plan held by the Company on the shares of Company Common Stock shallhowever, to the extent permitted by Law, be assigned to Parent and shall be converted into repurchase rights held by Parent as the corresponding shares of Parent Common Stock. The Company represents that, prior to the Effective Time, it shall take the necessary and appropriate actions to evidence that the adjustments with respect to any such assumed option treatment described in this Section 5.6(a) that is the appropriate adjustment as authorized and permitted under the terms of the plans and agreements pursuant to which the Stock Options were granted. For purposes of this Agreement, the "OPTION EXCHANGE RATIO" shall equal the quotient of (i) Ten Dollars and Fifty Cents ($10.50) divided by (ii) the Parent Market Price. (b) In the case of any Stock Options that are an "incentive stock optionsoption" (as defined in Section 422 of the Code, the exercise price, the number of shares of Parent Common Stock and the terms and conditions of such Stock Options ) shall be determined effected in accordance with Section 5.6(a) hereof, subject to such adjustments as are necessary to comply a manner consistent with the requirements of Section 424(a) of the Code. Each Adjusted Option shall continue to be governed by the Company Stock Option Plan and shall continue to be evidenced by the stock option agreement evidencing the grant of the predecessor assumed option and the Company Stock Option Plan and each such agreement shall be deemed amended to reflect the assumption of that plan by the Parent, the substitution of Parent Common Stock for Company Common Stock, and the revised exercise price determined pursuant to this Section 6.12. Notwithstanding anything herein to the contrary, the Parent shall not be obligated hereunder to assume the Company Stock Option Plan to the extent that there are options outstanding to purchase more than 448,349 shares of Company Common Stock immediately prior to the Closing Date subject to increase by agreement between Parent and the Company in addition to the Company Accelerated Options. (b) At the Effective Time, the Parent shall, subject to the adjustments provided below with respect to the Company Accelerated Options, assume the non-qualified stock option granted to Xxxxxxxx Xxxxxxx of Company Common Stock pursuant to that certain Agreement dated March 9, 1998, by and between the Company and Xxxxxxxx Xxxxxxx (the "Xxxxxxx Option") and subject to Section 6.12 (c) Parent shall, prior the Xxxxxxx Option shall become and represent an option to the Effective Time, take all action necessary so that, at the Effective Time, by virtue of the Merger and without the need of any further corporate action, Parent shall assume the Company Stock Plans with the result that all obligations of the Company under the Company Stock Plans with respect to Stock Options outstanding at the Effective Time, shall be obligations of Parent, and all Adjusted Options shall be exercisable, on the same terms as were applicable under the Stock Options, for shares of Parent Common Stock following the Effective Time, subject to this Section 5.6. (d) At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issue purchase a sufficient number of shares of Parent Common Stock for delivery upon at a per share exercise of Adjusted Options. As soon price determined in the same manner as practicable after the Effective Time, Parent shall file a Registration Statement on Form S-1, Fxxx X-0 xx Xxrm S-8 as the case may be (or any successor or other appropriate forms), determined with respect to the shares of Parent Common Stock subject an Adjusted Option pursuant to such Adjusted Options, and shall maintain the effectiveness of such registration statement and the current status of the prospectus or prospectuses contained therein, for so long as such Adjusted Options remain outstanding. Following the Effective Time, Parent shall use its reasonable best efforts to provide that holders of Adjusted Options do not experience delays in exercising and settling their Adjusted OptionsSection 6.12(a). (e) Parent shall take, and shall cause the Surviving Corporation and its Subsidiaries to take, the following actions: (i) waive any limitations regarding preexisting conditions and eligibility waiting periods under any health benefit plan maintained by any of them for the benefit of individuals who are employees of the Company and its Subsidiaries immediately prior to the Effective Time (the "EMPLOYEES") to the extent such preexisting condition or waiting period did not apply to the Employee under a comparable plan of the Company or its Subsidiary immediately prior to the Effective Time, (ii) provide each Employee with credit for any co-payments and deductibles paid prior to the Effective Time for the calendar year in which the Effective Time occurs, in satisfying any applicable deductible or out-of-pocket requirements under such health plans, and (iii) for eligibility, vesting and benefit accrual purposes (but not for purposes of benefit accruals under any defined benefit pension plan and not to the extent such crediting would result in a duplication of benefits) under all compensation and benefit plans and policies applicable to the Employees, treat all service by the Employees with the Company or any of its Subsidiaries and their predecessor entities before the Effective Time as service with Parent and its Subsidiaries. Parent shall cause the Surviving Corporation to honor all employment, retention and severance arrangements (including, without limitation, those set forth on Section 5.6(e) of the Company Disclosure Memorandum) and all obligations to current and former employees of the Company and its Subsidiaries thereunder. Parent shall take all actions necessary to cause the Surviving Corporation and its Subsidiaries to satisfy the obligations listed in Section 5.6(e) of the Company Disclosure Memorandum. (f) The Company shall terminate its Employee Stock Purchase Plan (the "ESPP") in accordance with its terms to take effect as of or immediately prior to the Effective Time. The offerings under the ESPP are currently suspended, and the Company shall not commence a new offering under its ESPP after the date of this Agreement. (g) The provisions of this Section 5.6 shall not create in any employee or former employee of the Company or any of its Subsidiaries any rights to employment or continued employment with Parent, the Surviving Corporation, the Company or any of their respective Subsidiaries.

Stock Options; Employee Benefits. (a) As of the Effective Time, (i) each outstanding option to purchase shares of Company Common Stock (a "STOCK OPTION") granted under any plan or ------------ arrangement providing for the grant of options to purchase shares of Company Common Stock to current or former officers, directors, employees or consultants of the Company or its Subsidiaries (the "COMPANY STOCK PLANS"), whether vested ------------------- or unvested, shall be assumed by Parent and converted into an option (such option, an "ADJUSTED OPTION") to acquire, on the same terms and conditions as were applicable under the Stock Option, the number of shares of Parent Common Stock (rounded up to the nearest whole share) determined by multiplying the number of shares of Company Common Stock subject to such Stock Option by the Option Exchange Ratio, at a price per share of Parent Common Stock equal to (A) the aggregate exercise price for the shares of Company Common Stock otherwise purchasable pursuant to such Stock Option (assuming all conditions to the exercise of such Stock Option had then been met) divided by (B) the aggregate number of shares of Parent Common Stock deemed purchasable pursuant to such Stock OptionOption (each, as so adjusted, an "ADJUSTED -------- OPTION"); provided, that, PROVIDED that such exercise price shall be rounded up to the nearest ------ whole cent. In addition, cent and (ii) any and all repurchase rights under any Company Stock Plan held by the Company on the shares of Company Common Stock shall, to the extent permitted by Lawlaw, be assigned to Parent and shall be converted into repurchase rights held by Parent as the corresponding shares of Parent Common Stock. The Company represents that, prior to the Effective Time, it shall take the necessary and appropriate actions to evidence that the option treatment described in this Section 5.6(a) is the appropriate adjustment as authorized and permitted under the terms of the plans and agreements pursuant to which the Stock Options were granted. For purposes of this Agreement, the "OPTION EXCHANGE RATIO" shall equal the quotient of (i) Ten Dollars and Fifty Cents ($10.50) divided by (ii) the Parent Market Price. (b) In the case of The adjustments provided herein with respect to any Stock Options that are "incentive stock options" as defined in Section 422 of the Code, the exercise price, the number of shares of Parent Common Stock and the terms and conditions of such Stock Options Code shall be determined and are intended to be effected in accordance a manner which is consistent with Section 5.6(a) hereof, subject to such adjustments as are necessary to comply with the requirements of Section 424(a) of the Code. (c) Parent shall, prior to the Effective Time, take all action necessary so that, at the Effective Time, by virtue of the Merger and without the need of any further corporate action, Parent shall assume the Company Stock Plans with the result that all obligations of the Company under the Company Stock Plans with respect to Stock Options outstanding at the Effective Time, shall be obligations of Parent, and all Adjusted Options shall be exercisable, on the same terms as were applicable under the Stock Options, for shares of Parent Common Stock following the Effective Time, subject to this Section 5.6. (d) At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issue a sufficient number of shares of Parent Common Stock for delivery upon exercise of Adjusted Options. As soon as practicable after the Effective Time, Parent shall file a Registration Statement on Form S-1X-0, Fxxx Xxxx X-0 xx Xxrm or Form S-8 as the case may be (or any successor or other appropriate forms), with respect to the shares of Parent Common Stock subject to such Adjusted Options, and shall maintain the effectiveness of such registration statement and the current status of the prospectus or prospectuses contained therein, for so long as such Adjusted Options remain outstanding. Following the Effective Time, Parent shall use its reasonable best efforts to provide that holders of Adjusted Options do not experience delays in exercising and settling their Adjusted Options. (e) [Reserved] (f) Parent shall take, and shall cause the Surviving Corporation and its Subsidiaries to take, the following actions: (i) waive any limitations regarding preexisting pre-existing conditions and eligibility waiting periods under any health benefit plan maintained by any of them for the benefit of individuals who are employees of the Company and its Subsidiaries immediately prior to the Effective Time (the "EMPLOYEES") to the extent such preexisting pre-existing condition or waiting period did not --------- apply to the Employee under a comparable plan of the Company or its Subsidiary immediately prior to the Effective TimeTime (or the date the Employees become eligible to receive benefits under Parent's plans following the Continuation Period), (ii) provide each Employee with credit for any co-payments and deductibles paid prior to the Effective Time for the calendar year in which the 42 Effective Time occursoccurs (or the date the Employees become eligible to receive benefits under Parent's plans following the Continuation Period), in satisfying any applicable deductible or out-of-pocket requirements under such health plans, and (iii) for eligibility, vesting and benefit accrual purposes (but not for purposes of benefit accruals under any defined benefit pension plan and not to the extent such crediting would result in a duplication of benefitsplan) under all compensation and benefit plans and policies applicable to the Employees, treat all service by the Employees with the Company or any of its Subsidiaries and their predecessor entities before the Effective Time as service with Parent and its Subsidiaries. Parent shall cause the Surviving Corporation to honor all employment, retention and severance arrangements (including, without limitation, those set forth on Section 5.6(e5.6(f) of the Company Disclosure MemorandumSchedule) and all obligations to current and former employees of the Company and its Subsidiaries thereunder. Parent shall take all actions necessary to cause the Surviving Corporation and its Subsidiaries to satisfy the obligations listed in Section 5.6(e5.6(f) of the Company Disclosure Memorandum. (fg) The Company shall terminate its Employee Stock Purchase Plan (the "ESPP") in accordance with its terms to take effect as of or immediately prior to the Effective Time. The offerings under the ESPP are currently suspended, and the Company shall not commence a new offering under its ESPP Employee Stock Purchase Plan after the date of this Agreement. (gh) The provisions of this Section 5.6 shall not create in any employee or former employee of the Company or any of its Subsidiaries any rights to employment or continued employment with Parent, the Surviving Corporation, the Company or any of their respective Subsidiaries.