Common use of Stock Options Clause in Contracts

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1The Company hereby agrees to grant to the Executive an option to purchase 83,333 shares of common stock of the Company on the date hereof and on each anniversary of the date of this Agreement during the Term (each such grant, an “Option”); provided, that, the Executive is employed by the Company on each such date. At the Effective Time, each Option, whether or not vested, that has an The respective exercise price that is equal to or greater per share of each Option shall be no less than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product fair market value of the Xxxxxx'x Stock Value multiplied by the number of underlying shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange date the Option is granted. If the Option is granted on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, date of the Company shall take all reasonable and necessary actions Company’s initial public offering of its common stock pursuant to advise an effective registration statement filed with the holders of Options of their respective rights under this Agreement Securities Exchange Commission (including, without limitation, as contemplated by Section 7.13the “IPO”), the Optionsfair market value of the Company’s common stock shall be determined in good faith by the Board in compliance with Section 409A of the Internal Revue Code of 1986, as amended (the “Code”). If the Option is granted after the IPO, the respective fair market value of the Company’s common stock shall be determined based on the closing price on the trading day immediately before the grant date. Subject to accelerated vesting provisions set forth in Section 6 herein, each Option agreements shall vest as to twenty percent (20%) of the shares subject to such Option on the first anniversary of the grant of such Option and as to twenty percent (20%) of the shares subject to such Option on each anniversary thereafter, subject to the Executive’s continued employment with the Company on the relevant vesting dates. In all other respects, each Option shall be subject to the terms, definitions and provisions of the Company’s 2008 Stock Option Plan, as amended from time to time, and the respective Stock Option Plans, to facilitate stock option agreement by and between the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options Executive and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights Company (the holder of such Options had, or may have had, in respect of such Options“Option Agreement”).

Stock Options. 2.6.1. At a. Through the CytoTherapeutics, Inc. 1992 Equity Incentive Plan (the "Incentive Plan"), and subject to the terms and conditions of such Plan, you will be granted an option to acquire 200,000 shares of the common stock of the Company (the "Time-Based Option") at the fair market value of such shares on the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled andDate, as soon as reasonably practicable after determined by the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal Board. Subject to your continued employment by the Options Spread Value. For any holder of OptionsCompany, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between Time-Based Option will vest over forty-eight (48) months as follows: (i) the product one quarter of the Xxxxxx'x Stock Value multiplied by shares will vest on the number first anniversary of shares of Company Common Stock subject to such Options less the Effective Date and (ii) the aggregate exercise price with respect to such Optionsremaining shares shall vest at the rate of one forty-eighth (1/48) per month on the last day of each month during the ensuing thirty-six months. The "Xxxxxx'x Stock Value" Except as otherwise expressly provided herein, the Time-Based Option shall be equal governed by the terms of the Incentive Plan, as in effect from time to time. Any Change in Control will result in the accelerated vesting of the option to acquire 100% of such shares. A Change in Control shall mean any consolidation or merger in which the Company is not the surviving corporation, a transaction or series of related transactions that result in the acquisition of all of substantially all of the Company's outstanding Common Stock by a single person or entity or by a group of persons or entities acting in concert, or the sale or transfer of all or substantially all of the Company's assets. b. In addition to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time-Vested Option, the Company will grant you an option to acquire 100,000 shares of the common stock of the Company (athe "Performance-Based Option") shall take all reasonable steps necessary to make any amendments at fair market value of such shares on the Effective Date, as determined by the Board. The Performance-Based Options are subject to the terms of the Stock Performance-Based Incentive Option PlansAgreement, a copy of which is attached hereto as Schedule A, and to your execution of that Option Agreement. c. In addition to the foregoing options, you shall be eligible, at the end of any calendar year beginning with calendar year 1998, or as otherwise determined from time to time by the Board or the Compensation Committee of the Board, to receive additional options, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, amount and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender terms of any Options and such options to be determined by the receipt of consideration therefor Board or such Compensation Committee in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionstheir sole discretion.

Stock Options. 2.6.1. At Subject to Board approval and adoption of an equity incentive plan (the Effective Time“Plan”), each OptionEmployer shall grant to Employee incentive stock options (the “Options”) to purchase 81,564 shares (which option shares, whether or not vestedupon the second closing contemplated in the stock purchase agreement to be entered into on the date hereof by and among Employer and certain other investors, that has will represent approximately 6% of the outstanding equity of Employer on a fully diluted basis) of Employer’s common stock at an exercise price equal to US$9.00 per share (provided that the Board determines that such exercise price per share is equal to or greater than the Xxxxxx'x Stock Value fair market value of one share of Employer’s common stock on the effective date of grant), which Options shall be cancelledsubject to vesting. The Options shall vest and become exercisable over a four (4) year term as follows, without any payment or other consideration thereforprovided Employee remains continuously employed by Employer: one forty-eighth (1/48) of the Options issued in connection with such grant shall vest on the last day of each calendar month beginning with the calendar month in which such grant occurred until all such Options associated with such grant shall have vested. At the Effective Time, except as otherwise provided in Section 7.13, all other Unvested Options, whether or not vestedany unvested shares of common stock acquired upon exercise of any options (the “Option Shares”), shall be cancelled and, as soon as reasonably practicable after subject to repurchase by Employer at Employee’s cost upon the Effective Time, each holder termination of the Employment for any reason. The mechanics of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" repurchase shall be equal to, provided in the Plan and in the option agreement (the “Option Agreement”) entered into by Employer and Employee with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall Options and the Option Shares will be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments subject to the terms and conditions of the Stock Plan and the Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary which Employee will be required to obtain at the earliest practicable date all written consents (if necessary) from holders sign as a condition of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), receiving the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At The Company shall issue options to Executive to acquire shares of the Effective TimeCompany's common stock ("Shares"), each Option, whether or not vested, that has under the following terms and conditions: (1) Executive's existing options to acquire Forty Five Thousand Five Hundred (45,500) shares of Company common stock at an exercise price that is equal to or greater than the Xxxxxx'x Stock Value of $0.70 per share shall be cancelledextended in term such that they shall remain exercisable until June 30, without any payment or other consideration therefor2011. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, These options shall be cancelled and, considered vested as soon as reasonably practicable after of the Effective Time, each holder date of such Options shall receive in lieu execution of such Options an amount in cash, without interest, equal this Agreement (2) Pursuant to the Options Spread Value. For any holder of OptionsCompany's 2000 Stock Option Plan, the "Options Spread Value" Executive shall be equal to, with respect granted an option to such Options, the difference, if positive, between purchase Seventy Five Thousand (i75,000) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject company common stock at an exercise price of $1.50 per share. These options will vest in four equal installments of Eighteen Thousand Seven Hundred Fifty (18,750) shares on January 1, 2002, July 1, 2002, January 1, 2003, and July 1, 2003. Any unexercised options issued pursuant to such Options less this Section 3(c)(2) shall expire on June 30, 2011. (ii3) Executive may, at her or the Company's option, pay for all or any portion of the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be by delivering a combination of any or all of the following: (i) By delivering shares of the Company's common stock previously held by Executive which have a fair market value at the date of exercise equal to the closing aggregate exercise price of to be paid by Executive upon such exercise; (ii) By delivering a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Effective Time.Company the amount of sale or loan proceeds to pay the exercise price; or 2.6.2. Prior to the Effective Time, the Company (aiii) shall take By delivering a full recourse promissory note for all reasonable steps necessary to make any amendments to the terms or part of the Stock Option Plansaggregate exercise price, payable on such terms and bearing such interest rate as determined by the individual Option agreements Board (but in no event less than the minimum interest rate specified under the Internal Revenue Code at which no additional interest would be imputed and in no event more than the maximum interest rate allowed under applicable usury laws), which promissory note may be either secured or unsecured in such manner as the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) Board shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement approve (including, without limitation, as contemplated by Section 7.13a security interest in shares of the Company's stock), . (4) The Board will qualify the Options, options for an exemption from registration under the respective Option agreements applicable federal and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsapplicable state securities laws.

Stock Options. 2.6.1. At (i) On the Effective Timethird Nasdaq trading day following the Company’s release of earnings results for the quarterly period ended June 30, each 2008, the Company will grant Executive a stock option (an “Option”) to acquire 80,000 shares of the Company’s Class A Ordinary Shares, whether or not vested, that has $0.10 par value per share (“Shares”) at an exercise price that is per Share equal to or the greater than of (a) the Xxxxxx'x Stock Value fair market value per Share as of the date of grant and (b) 1.7 times the Company’s fully diluted book value per Share as of June 30, 2008, under such terms and conditions as provided for under the Company’s existing stock incentive plan (the “Plan”) which are not inconsistent with clauses (ii) and (iii) below. (ii) The Options described herein shall be cancelledgranted subject to the following terms and conditions: (A) the Options shall be granted under and subject to the Plan; (B) the exercise price per Share subject to the Options shall be equal to the greater of (1) the fair market value per Share as of the date of grant and (2) 1.7 times the Company’s fully diluted book value per Share as of the immediately proceeding quarter-end before grant; (C) the Options shall be vested 25% immediately and as to 25% of the Shares subject thereto on each of the first three anniversaries of the date of grant; provided, without any payment or other consideration therefor. At that, the Effective TimeOptions shall cease to vest upon Executive’s termination of employment with the Employer; (D) the Options shall be exercisable for the ten (10) year period following the date of grant; provided, that, except as otherwise provided in Section 7.13herein, all other Optionsupon Executive’s termination of employment with the Employer for any reason, any unvested portion of the Options shall automatically terminate and the vested portion of the Options shall remain exercisable for 90 days after Executive’s termination of employment with the Employer; and (E) the Options shall be evidenced by, and subject to, a stock option agreement whose terms and conditions are consistent with the terms hereof. (iii) The Options shall provide that upon a termination of employment by the Employer for Cause (as defined below), the Options (whether or not vested) shall terminate. Upon a termination of employment due to Executive’s death or Disability (as defined below), shall be cancelled andor for Family Reasons (as defined below), as soon as reasonably practicable after any unvested portion of the Effective Time, each holder of such Options shall receive in lieu terminate and any vested portion shall remain exercisable for the remainder of such Options an amount in cashits term (except that on a termination for Family Reasons, the vested portion shall terminate if the Executive becomes employed by a Competing Entity (as defined below)). Upon a termination of employment by the Employer without interestCause or by Executive for Good Reason (as defined below), equal or upon the expiration of the Employment Period where the Employer has failed to offer Executive continued employment, any unvested portion of the Options Spread Value. For any holder shall vest, and the Options (including the portion which becomes vested pursuant to this clause (iii)) shall remain exercisable for the remainder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Timetheir term. 2.6.2. Prior to (iv) On the Effective Timethird Nasdaq trading day following the Company’s release of earnings results for the quarterly periods ended on each of June 30, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans2009 and June 30, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time2010, the Company shall take all reasonable and necessary actions grant Executive an additional Option to advise the holders of acquire 80,000 Shares. All Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, granted pursuant to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 5(f)(iv) shall be subject to the same terms and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described conditions as provided in Section 2.6.1 5(f) (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsii) – (iii) above.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) Executive shall take all reasonable steps necessary be permitted to make participate in any amendments stock option and similar plans as adopted by the Company from time to time for the grant of stock options and other equity incentives to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at Company’s employees. On the Effective Time in accordance Date and on each anniversary thereafter during the term of this Agreement (subject to Executive’s continuous employment with Section 2.6.1. 2.6.3. At or prior to the Effective TimeCompany through each such anniversary), the Company shall take all reasonable and necessary actions grant Executive a stock option, which will be, to advise the holders extent possible under the $100,000 rule of Options Section 422(d) of their respective rights under this Agreement (including, without limitationthe Internal Revenue Code of 1986, as contemplated by Section 7.13amended (the “Code”), an “incentive stock option” (as defined in Section 422 of the Code), under the Company’s 2003 Stock Plan (the “Plan”) to purchase 250,000 shares of the Company’s common stock (as adjusted for stock splits and stock combinations that may occur after the date of this Agreement), which each such option shall have a per share exercise price equal to the fair market value of the Company’s common stock on the applicable date of grant (each an “Annual Option” and collectively, the “Annual Options”). Subject to the accelerated vesting provisions set forth herein, each Annual Option will vest as to 1/12th of the shares subject to such option each month following its date of grant, so that each Annual Option will be fully vested and exercisable one year from its grant date, subject to Executive’s continuous service to the Company through each relevant vesting date. Notwithstanding the above, in the event of a Change in Control (as defined in Section 8.1 below) of the Company prior to the granting of all Annual Options, then the securities underlying all of the then remaining yet unvested Annual Options shall be accelerated with respect to their vesting and shall be granted in their entirety to Executive. (b) On the Effective Date, the Company shall grant Executive a stock option, which will be, to the extent possible under the $100,000 rule of Section 422(d) of the Code, an “incentive stock option” (as defined in Section 422 of the Code), under the Plan to purchase 1,000,000 shares of the Company’s common stock, which such option shall have a per share exercise price equal to the fair market value of the Company’s common stock on the Effective Date (the “Performance Option” and together with the Annual Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such “Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13”). The surrender Performance Option shall vest upon the Company’s achievement of the following performance milestones, subject to Executive’s continuous employment with the Company through the date any such performance milestone is achieved: • 50,000 shares subject to the Performance Option will vest upon European approval of Orathecin; • 50,000 shares subject to the Performance Option will vest upon European approval of Decitabine; • 200,000 shares subject to the Performance Option will vest upon the securing of a significant corporate partner for one or more of the Company’s drugs or $25,000,000 in additional financing; • 200,000 shares subject to the Performance Option will vest upon the Company achieving annual gross sales of $30,000,000 or more; • 50,000 shares subject to the Performance Option will vest upon the acquisition from a third party of at least one Phase II or more advanced stage compound; • 100,000 shares subject to the Performance Option will vest upon completion of Phase III of a compound acquired during Executive’s tenure as the Company’s Chief Executive Officer during the term of this Agreement; • 100,000 shares subject to the Performance Option will vest upon FDA approval of a compound acquired by the Company during the term of this Agreement; and • 250,000 shares subject to the Performance Option will vest upon achievement of additional milestone(s) to be agreed upon with the Board. (c) Each Option shall have a term of ten (10) years from its date of grant, subject to earlier termination in connection with Executive’s termination of service to the Company as provided in the Option Agreements. The Options will be subject to the terms, definitions and provisions of the Plan and the receipt stock option agreements to be executed by and between Executive and the Company (the “Option Agreements”), all of consideration therefor in accordance with Section 2.6.1 shall be deemed a release which documents will have terms substantially identical to that of any Executive’s predecessor as Chief Executive Officer and all rights the holder of such Options had, or may have had, in respect of such Optionsare incorporated herein by reference.

Stock Options. 2.6.1(i) Subject to approval by the Board on or before the Grant Date, the Executive shall be granted a stock option (the “First Option”) to purchase an aggregate of One Million Five Hundred Thousand (1,500,000) shares of Common Stock, all of which shall be granted as an incentive stock option to the extent permissible under the Code, and the remainder of which shall be granted as a nonstatutory stock option. At The First Option shall be granted under the Effective TimePlan pursuant to the Company’s standard form of stock option agreement. The First Option shall vest (i) in equal 1/3 increments annually until fully vested and/or (ii) in full and become immediately exercisable upon a Change of Control of the Company (as such term is defined in the applicable stock option agreement). Except as expressly set forth herein, each Optionthe terms and conditions governing the First Option and the grant, whether or not vested, that has exercise and ownership of the First Option and the shares of Common Stock for which such First Option is exercisable shall be governed by the Plan and the applicable stock option agreement. The Executive shall be required to execute such stock option agreement as a condition precedent to the receipt of the First Option and the First Option shall have an exercise price that is equal to or greater than the Xxxxxx'x per share of Common Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder closing trading price of Optionsthe Common Stock on the Grant Date. (ii) Upon the one year anniversary of this Agreement, the "Options Spread Value" shall be equal to, with respect and subject to such Options, the difference, if positive, between (ia) the product approval by the Board on or before the Second Grant Date (as hereinafter defined) and (b) the prior affirmative vote of the Xxxxxx'x Stock Value multiplied by requisite number of stockholders of the Company to increase the total number of shares of Company Common Stock subject eligible for issuance under the Plan as of the date of this Agreement by Three Million Five Hundred Thousand (3,500,000) shares, the Executive shall be granted a stock option (the “Second Option”) to such Options less purchase an aggregate of One Million Five Hundred Thousand (1,500,000) shares of Common Stock, all of which shall be granted as an incentive stock option to the extent permissible under the Code, and the remainder of which shall be granted as a nonstatutory stock option. The Second Option shall be granted under the Plan pursuant to the Company’s standard form of stock option agreement. The Second Option shall vest (i) 1/3 upon the one year anniversary of the Second Grant Date and quarterly thereafter in equal increments over one year until fully vested and/or (ii) in full and become immediately exercisable upon a Change of Control of the aggregate Company (as such term is defined in the applicable stock option agreement). Except as expressly set forth herein, the terms and conditions governing the Second Option and the grant, exercise and ownership of the Second Option and the shares of Common Stock for which such Second Option is exercisable shall be governed by the Plan and the applicable stock option agreement. The Executive shall be required to execute such stock option agreement as a condition precedent to the receipt of the Second Option and the Second Option shall have an exercise price with respect to such Options. The "Xxxxxx'x per share of Common Stock Value" shall be equal to the closing trading price of a share of Company the Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms one year anniversary of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13the “Second Grant Date”), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At (a) On the Effective TimeEmployment Date, each Optionthe Company will enter into an incentive stock option agreement with Employee providing for the grant of incentive options effective on the Employment Date, whether under the Company's stock option plan (which plan, to be adopted or not vestedbefore the Employment Date by the Company's Board of Directors, that has and subject to subsequent shareholder approval, will, upon receipt of such shareholder approval, satisfy all conditions of Rule 16b-3 under the Securities Exchange Act of 1934 (the "Exchange Act"), to acquire 1,200,000 shares of Company common stock at an exercise price that is equal to the fair market value of the Company's common stock on the Employment Date (anticipated to be $0.375 per share, the fair market value on the date hereof). Such options shall become exercisable, in whole or greater than in part, in five equal cumulative annual installments commencing on April 30, 1996. Once exercisable, such options shall remain exercisable until expiration. In the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13event of termination of employment, all other Optionsoptions 6 exercisable on the date of termination shall remain exercisable for a period of three months following termination. The options shall expire ten years from the date of grant. The Company agrees to promptly register on Form S-8 under the Act, whether or all shares issuable pursuant to the options granted to Employee under this Section 13(a), but not vestedprior to achieving the Financing Goal. On each May 1 (provided Employee is then employed by the Company), the exercise date for the 240,000 shares included in the next annual installment, to become exercisable on the next May 1, shall be cancelled andaccelerated to the extent necessary for Employee to maintain, on a fully diluted basis, a 10% interest in the Company's common stock. No acceleration will be effected until Employee has obtained a 10% interest in the Company's common stock, on a fully diluted basis, the determination of which, as soon well as reasonably practicable any determination regarding the maintenance of Employee's 10% interest in the Company's common stock, shall be made as if all of Employee's outstanding options, to the extent exercisable, had been exercised. For purposes of the preceding sentence, if Employee has not obtained a 10% interest in the Company's common stock prior to the expiration of three years from the Employment Date then Employee will be deemed to have obtained such 10% interest in the Company's common stock at the expiration of three years from the Employment Date. (b) If after all 1,200,000 shares covered by the Effective Timeincentive stock option agreement referred to in Section 13(a) have become exercisable, Employee does not beneficially own (including shares issuable pursuant to then exercisable options) 10% or more of the Company's then outstanding common stock, on a fully diluted basis, then, so long as Employee remains employed by the Company, an additional incentive stock option agreement shall be entered into between the Company and Employee. Under such agreement, Employee, on each holder May 1 while Employee remains an employee of such Options the Company, shall receive in lieu an automatic grant of such Options an amount in cash, without interest, equal additional incentive options to acquire up to 240,000 shares of the Company's common stock to the Options Spread Value. For any holder extent necessary for Employee to obtain or maintain, on a fully diluted basis, beneficial ownership (including shares issuable pursuant to then exercisable options) of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product 10% of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate Company's common stock. The exercise price with respect to such Options. The "Xxxxxx'x Stock Value" of all options granted under this Section 13(b) shall be equal to the closing price of a share of Company Common Stock as reported fair market value on the American Stock Exchange date of automatic grant. The options shall be exercisable, in whole or in part, commencing on the Business Day immediately prior date of automatic grant and shall expire ten years after the date of automatic grant. In the event of termination of employment, all options exercisable on the date of termination shall remain exercisable for a period of three months following termination. The Company agrees to promptly register on Form S-8 under the Act all shares issuable pursuant to the Effective Time. 2.6.2options granted to Employee under this Section 13(b). Prior In the event incentive stock options cannot be granted under applicable law, Employee shall receive nonqualified options under the stock option plan referred to in Section 13(a). To the Effective Time, extent that it shall become apparent that there will be insufficient shares available under the Company (a) shall take all reasonable steps necessary stock option plan to make any amendments cover the Employee's options anticipated to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by be granted under this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time13(b), the Company shall take all reasonable adopt an amendment to the stock option plan providing for an increase in shares issuable thereunder and necessary actions submit such amendment to advise its shareholders for approval at the holders next annual or special shareholders' meeting. 7 In the event the Company shall receive gross cash proceeds of Options $10 million or more in connection with an underwritten public offering of their respective rights under this Agreement common stock (including, without limitation, as contemplated by Section 7.13the "Public Offering"), then no automatic grant shall be effected on the OptionsMay 1 following the closing of the Public Offering or at any time thereafter. (c) The purchase price of the shares of common stock issuable upon exercise of the options referred to in Sections 13(a) and 13(b) is payable in cash, an equivalent fair market value of common stock, by cashless exercise procedures, or a combination of the respective Option agreements foregoing. The purchase price and the respective Stock Option Plans, to facilitate the timely number of shares issuable upon exercise of such rights and obligations options are subject to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration adjustments in the manner described event that certain changes in Section 2.6.1 capitalization should occur. (except d) Upon the occurrence of a change of control, all outstanding options held by Employee, to the extent not exercisable, shall immediately become exercisable. A change in control shall mean the acquisition through any number of transactions by any individual or entity (any of which is herein referred to as otherwise contemplated by Section 7.13a "Person"). The surrender , or any two or more Persons acting as a partnership, syndicate, or other group for the purpose of acquiring or holding securities of the Company, and any Options and such Person(s) controlling, controlled by, or under common control with any such person(s), of the receipt of consideration therefor beneficial ownership, as determined in accordance with Section 2.6.1 shall be deemed a release Rule 13d-3 under the Exchange Act, directly or indirectly, in the aggregate at any point in time of any and all rights 50% or of either (i) the holder of such Options hadthen outstanding Company common stock, or may have had, (ii) the combined voting power of the then outstanding Company voting securities entitled to vote generally in respect the election of such Optionsdirectors.

Stock Options. 2.6.1In connection with the commencement of Employee's ------------- employment, the Board of Directors shall grant to Employee an option to purchase 420,000 shares of the Company's Common Stock (the "Shares"). At the Effective Time, each Option, whether or not vested, that has The option shall ------ be granted with an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Valuefair market value on the date of the grant. For any holder The option shall become exercisable during Employee's employment at the rate of Options, six forty-eighths (6/48) of the "Options Spread Value" Shares six (6) months after the Vesting Commencement Date and one-forty-eighth (1/48) of the Shares at the end of each calendar month thereafter. The Vesting Commencement Date shall be equal tothe date on which Employee commences his employment with the Company. Notwithstanding the above, with respect to such Options, in the difference, if positive, between event that (i) the product of the Xxxxxx'x Stock Value multiplied Employee's employment is terminated by the number of shares of Company Common Stock subject to such Options less or a successor other than for Cause (as defined in Section 6 below), or (ii) Employee's job duties, responsibilities and requirements are materially reduced or changed such that they are inconsistent with Employee's prior duties, responsibilities and requirements, in either case in connection with, or as a result of, a Change of Control (as defined in Section 8 below), one hundred percent (100%) of the aggregate exercise price with respect to option has not yet become exercisable shall become exercisable on the effective date of such Optionstermination, reduction or change. The "Xxxxxx'x Stock Value" shall option will be equal an incentive stock option to the closing price maximum extent allowed by the Internal Revenue Code of a share of Company Common Stock 1986, as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Timeamended, the Company (a) shall take all reasonable steps necessary to make any amendments and will be subject to the terms of the Company's 1995 Stock Plan and the Stock Option Plans, Agreement between Employee and the individual Option agreements or the Options that are necessary to give effect Company. Subject to the transactions contemplated by this Agreementdiscretion of the Company's Board of Directors, and (b) Employee shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than be eligible to receive consideration additional grants of stock options from time to time in the manner described in Section 2.6.1 (except future, on such terms and subject to such conditions as otherwise contemplated by Section 7.13). The surrender the Board of Directors shall determine as of the date of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsgrant.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable Within ninety (90) days after the Effective Timeeffective date of this Second Amendment RedPrairie Holding, each holder Inc., a Delaware corporation (“Holding”), will grant the Executive a stock option (the “Option”) under Holding’s 2005 Stock Incentive Plan (the “Plan”) to purchase 74,576 shares of such Options shall receive in lieu of such Options an amount in cash, without interest, Holding common stock at a price per share equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price fair market value of a share of Company Common Stock common stock as reported determined by the Board on the American Stock Exchange effective date of grant (the actual date of grant of the Option is referred to herein as the “Grant Date”). The Option will vest with respect to twenty-five percent (25%) of the shares subject to the Option on the Business Day first anniversary of the effective date of this Second Amendment. The remaining seventy-five percent (75%) of the shares subject to the Option will vest in thirty-six (36) substantially equal monthly installments thereafter. In each case, the vesting of the Option is subject to the Executive’s continued employment by the Company through the respective vesting date. Further, if a Change in Control Event (as such term is defined in the Plan) occurs while you are still employed by the Company and, immediately prior to such Change in Control Event the Option is outstanding and not otherwise fully vested, you will be deemed to be fully vested in such Option immediately prior to the Effective Time. 2.6.2Change in Control Event. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms The maximum term of the Stock Option Planswill be ten (10) years, subject to earlier termination upon the individual termination of the Executive’s employment with the Company, a Change in Control and similar events as set forth in the Plan and the standard form of award agreement used to evidence employee stock option grants under the Plan. The Option agreements or shall not be an “incentive stock option” under Section 422 of the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitationInternal Revenue Code, as contemplated by Section 7.13), amended (the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13“Code”). The surrender of any Options Option shall be granted under and subject to the Plan, and shall be subject to such further terms and conditions as set forth in a written stock option agreement (in the standard form used to evidence employee stock option grants under the Plan) to be entered into by Holding and the receipt Executive to evidence the Option. The Company has provided a copy of consideration therefor the Plan and such standard form of employee stock option agreement to the Executive in accordance connection with Section 2.6.1 shall be deemed a release the execution of any and all rights the holder of such Options had, or may have had, in respect of such Optionsthis Second Amendment.

Stock Options. 2.6.1(a) A STOCK OPTION for a total of Six Hundred Thousand (250,000) shares Of Stock of PowerChannel Holdings, Inc is hereby granted to Executive. (b) The exercise price as determined by the Board of Directors of the Company is One and 00/100 Dollars ($1.00) per share. (c) One-quarter of the share options will vest six months from the date hereof and one quarter shall vest twelve months from the date hereof. At One quarter will vest eighteen months from the Effective Timedate hereof with the remainder vesting twenty four months from the date hereof. This Option may be exercised within ten (10) years from the date of its grant. (d) This Option may not be exercised if the issuance of shares of Stock of the Company upon such exercise would constitute a violation of any applicable Federal or State securities or other law or valid regulation. The Executive, each as a condition to the exercise of this Option, whether shall represent to the Company that the shares of Stock of the Company that the Executive acquires under this Option are being acquired by the Executive for investment and not with a present view to distribution or resale, unless counsel for the Company is then of the opinion that such a representation is not vestedrequired under the securities Act of 1933 or any other applicable law, that has an exercise price that is equal to regulation, or greater rule of any governmental agency. (e) This Option may not be transferred in any manner other than by will or the Xxxxxx'x Stock Value laws of descent and distribution, and may be exercised during the lifetime of the Executive only by the Executive. The terms of this Option shall be cancelledbinding upon the executors, without any payment administrators, heirs, successors, and assigns of the Optionee. (f) In the event of a merger, consolidation, reorganization, stock dividend, stock split, or other consideration therefor. At change in corporate structure or capitalization affecting the Effective Timecommon shares of Company, except as otherwise provided in Section 7.13, all other Options, whether or not vested, an appropriate adjustment shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive made in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares available to Executive and in the number, kind, exercise price, etc., of Company Common Stock shares subject to such Options less options granted hereunder. (iig) In the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price event of a share Change of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms control of the Stock Option PlansCompany, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) all options granted hereunder shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1immediately vest. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At the Effective TimeThe Company will grant Employee options to purchase 10,000 BioTime common shares, each Optionno par value, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x under BioTime’s Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, Option Plan (the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between Option"). (i) the product The exercise price of the Xxxxxx'x Stock Value multiplied Option will be the last closing price of the Company’s (or Related Company’s) common shares immediately prior to approval of this grant by the Compensation Committee of the Company’s Board of Directors. The Option will vest (and thereby become exercisable) as follows: 1/48th of the number of shares of each option grant will vest at the end of each full month of employment. Vesting will depend on Employee's continued employment with the Company Common through the applicable vesting date. The unvested portion of the Option shall not be exercisable. The Option will not be transferable by Employee during Employee’s lifetime, except as provided in the Stock subject to such Options less Option Agreement. (ii) The vested portion of the aggregate exercise price with respect Option shall expire on the earliest of (A) seven (7) years from the date of grants, (B) three months after Employee ceases to such Options. The "Xxxxxx'x Stock Value" be an employee of the Company for any reason other than Employee's death or Disability (as defined below), or (C) one year after Employee ceases to be an employee of the Company due to her death or Disability; provided that if Employee dies during the three month period described in clause (B) of this paragraph, the expiration date of the vested portion of the Option shall be equal to one year after the closing price date of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Timeher death. 2.6.2. Prior to the Effective Time, the Company (aiii) shall take all reasonable steps necessary to make any amendments The Option will be subject to the terms and conditions of the BioTime’s 2002 Stock Option Plan (the "Plan") and a Stock Option Agreement consistent with the Plan. (iv) The Company will also grant Employee an option to purchase 400,000 of the Company's common shares, no par value, (the "OncoCyte Option"). (v) The exercise price of these Options is 75 cents, the fair market value of the Company's common shares on the effective date of the grant, as determined by the Board of Directors. The effective date of the grant will be the date on which this Agreement is effective. The Option will vest (and thereby become exercisable) as follows: 1/48th of the number of shares will vest at the end of each full month of employment. Vesting will depend on Employee's continued employment with the Company through the applicable vesting date. The unvested portion of the Option shall not be exercisable. The Option will not be transferable by Employee during her lifetime, except as provided in the Stock Option PlansAgreement. (vi) The vested portion of the Option shall expire on the earliest of (A) seven (7) years from the date of grant, (B) three months after Employee ceases to be an employee of the Company for any reason other than Employee's death or Disability (as defined below), or (C) one year after Employee ceases to be an employee of the Company due to her death or Disability; provided that if Employee dies during the three month period described in clause (B) of this paragraph, the individual expiration date of the vested portion of the Option agreements or shall be one year after the Options that are necessary to give effect date of her death. (vii) The Option will be subject to the transactions contemplated by this Agreement, terms and (b) shall take reasonable steps necessary to obtain at conditions of the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Company’s Stock Option Plans, to facilitate Plan (the timely exercise of such rights "Plan") and obligations to effectuate a Stock Option Agreement consistent with the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsPlan.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product As of the Xxxxxx'x Stock Value multiplied by the number of Effective Date, Executive will be granted nonstatutory stock options to purchase 3,500,000 shares of Company Common Stock subject to such Options less (ii) the aggregate common stock at a per share exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a per share of Company Common Stock as reported on the American Stock Exchange Nasdaq National Market (“Nasdaq”) for the common stock of the Company on the Business Day immediately prior Effective Date (the “Initial Option”). The Initial Option will be granted under and subject to the Effective Time. 2.6.2. Prior terms, definitions and provisions of the Company’s 2003 Stock Plan, as amended (the “2003 Plan”) and will be scheduled to vest at a rate of 25% on each anniversary of the Effective Time, grant over four (4) years assuming Executive’s continued employment with the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by on each scheduled vesting date. Except as provided in this Agreement, the Initial Option will be subject to the Company’s standard terms and conditions for options granted under the 2003 Plan. (bii) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders As of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3Date, Executive will be granted nonstatutory stock options to purchase 8,500,000 shares of Company common stock (the “Stand-Alone Grant”). At or prior Two million five hundred thousand (2,500,000) shares of Company common stock subject to the Effective Time, Stand-Alone Grant will be granted with a per share exercise price equal to the closing price per share on the Nasdaq for the common stock of the Company shall take all reasonable and necessary actions on the Effective Date. Three million (3,000,000) shares of Company common stock subject to advise the holders Stand-Alone Grant will be granted with a per share exercise price equal to five (5) dollars. Three million (3,000,000) shares of Options Company common stock subject to the Stand-Alone Grant will be granted with a per share exercise price equal to six (6) dollars. The Stand-Alone Grant will be granted under a non-stockholder approved arrangement outside of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, any Company equity plan. Subject to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 Agreement, the terms and Section 7.13conditions of the Stand-Alone Grant will be identical to those of the Initial Option (except that they will not be granted under a Company equity plan) and will be scheduled to vest at a rate of 25% on each anniversary of the grant over four (4) years assuming Executive’s continued employment with the Company on each scheduled vesting date. (iii) As of the Effective Date, Executive will be granted 500,000 shares of restricted stock (the “Restricted Stock Grant”). From The Restricted Stock Grant will be granted under and subject to the terms, definitions and provisions of the Company’s 2003 Plan, and will vest if and only if the Company achieves profitability (as defined) in two (2) of the first five (5) quarters commencing after the Effective TimeDate and during the Employment Term. If and when the Restricted Stock Grant vests, no holder Executive agrees not to sell or otherwise dispose of Options the shares subject to the Restricted Stock Grant for a period of one (1) year from the date such shares vest, except that Executive may sell or otherwise dispose of that number of shares sufficient to cover any tax withholding obligations as determined by the Company. If the Company does not achieve profitability in two (2) of the first five (5) quarters commencing after the Effective Date, the Restricted Stock Grant will not vest and will expire. For purposes of the Restricted Stock Grant, “profitability” means net income before income tax, as reported publicly by the Company under GAAP, excluding amortization and/or write-down of intangibles, in-process research and development and major one-time items and the effects of changes in accounting principles, at the discretion of the Committee. For these purposes, restructuring charges in excess of $2,000,000 per quarter, gains/losses from assets sales, litigation gains/losses (including legal fees) and other income or loss in excess of $2,000,000 (an absolute amount) per quarter in total and stock option and stock awards under FAS 123R in excess of $4,000,000 per quarter shall have any rights be excluded from the determination of “profitability” for the purpose of this paragraph. Except as provided in respect of such Optionsthis Agreement, other than the Restricted Stock Grant will be subject to receive consideration the Company’s standard terms and conditions for restricted stock granted under the 2003 Plan. (iv) The Company will use its commercially reasonable best efforts to register all shares covered by the Initial Option, the Stand-Alone Option, and the Restricted Stock Grant on Form S-8 as soon as administratively practicable following the Effective Date. (v) It is expected that the Initial Option Grant, the Stand-Alone Grant and the Restricted Stock Grant will be granted in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender lieu of any Options and additional individualized equity grants for a four (4) year period commencing upon the receipt Effective Date, except that should the Company significantly over perform, additional equity grants may be made at the discretion of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsCommittee.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as (a) As soon as reasonably practicable after the Effective Timedate of this Agreement, each holder the Board shall approve the grant to the Executive of a stock option (the “Option”) to purchase 2,154,276 shares (the “Option Shares”) of the Company’s common stock (“Common Stock”), representing three and one-half percent (3.5%) of the capital stock of the Company determined on a fully-diluted basis (including all then outstanding options and warrants), such Options shall receive in lieu of such Options an amount in cash, without interest, Option to be exercisable at a per share exercise price equal to the Options Spread Value. For any holder fair market value per share of Optionsthe Common Stock on the grant date of the Option, as determined by the "Options Spread Value" shall be equal toBoard, all of the foregoing as more particularly provided in the agreement with respect to the Option to be entered into between the Company and the Executive in form and substance acceptable to the Board. The number of Option Shares shall be subject to increase from time to time in the event that the Company issues any additional shares of its Series B Preferred Stock (the “Series B Preferred”) at any time during the six (6) month period following the Effective Date, such Optionsthat, after giving effect to any such additional issuance of Series B Preferred, the differencenumber of Option Shares continues to represent three and one-half percent (3.5%) of the capital stock of the Company determined on a fully-diluted basis (including all then outstanding options and warrants), such adjustment to be more particularly provided in the above referenced option agreement. Subject to the provisions set forth in paragraph (c) below that provide for the acceleration of the vesting of the Option, the Option shall vest twenty-five percent (25%) on the anniversary of the Effective Date and monthly thereafter until the Option has become fully vested and exercisable with respect to all of the Option Shares. (b) The Executive shall be entitled to earn additional grants of stock options based on the following milestones, if positiveany, between achieved by the Company, as follows: (i) If the product of Company executes a strategic partnership agreement (the Xxxxxx'x Stock Value multiplied “Milestone 1 Partnership Agreement”), on such terms and conditions as are approved by the Board, within eighteen (18) months following the Effective Date, a stock option (the “Milestone 1 Option”) to purchase that number of shares of Company Common Stock subject (the “Milestone 1 Option Shares”) equal to one percent (1%) of the capital stock of the Company determined on a fully-diluted basis (including all then outstanding options and warrants), which shall be measured on the date of the execution of such Options less Board-approved Milestone 1 Partnership Agreement, all of the foregoing as more particularly provided in the agreement with respect to the Milestone 1 Option, to be entered into between the Company and the Executive in form and substance acceptable to the Board. The Milestone 1 Option will be exercisable at a per share exercise price equal to the fair market value per share of the Common Stock on the grant date of the Milestone 1 Option, as determined by the Board, the foregoing to be more particularly provided in the above referenced option agreement. Subject to the provisions set forth in paragraph (c) below that provide for the acceleration of the vesting of the Milestone 1 Option, the Milestone 1 Option shall vest twenty-five percent (25%) on the anniversary of the date of grant and monthly thereafter until the Milestone 1 Option has become fully vested and exercisable with respect to all of the Milestone 1 Option Shares; and (ii) If the aggregate exercise price Company (A) assuming the Company has executed the Milestone 1 Partnership Agreement, executes a second, separate strategic partnership agreement (the “Milestone 2 Partnership Agreement”), on such terms and conditions as are approved by the Board, or (B) following the completion in full of the Company’s Series B Preferred financing (the “Series B Preferred Financing”), consummates an equity financing with minimum gross proceeds of at least $50 million to the Company (a “Qualified Equity Financing”) with a valuation equal to at least two times (2x) the post-money valuation of the Company after giving effect to the consummation of the Series B Preferred Financing, which Milestone 2 Partnership Agreement is executed or Qualified Equity Financing occurs within two (2) years following the Effective Date, a stock option (the “Milestone 2 Option”) to purchase that number of shares of Common Stock (the “Milestone 2 Option Shares”) equal to one percent (1%) of the capital stock of the Company determined on a fully-diluted basis (including all outstanding options and warrants), which shall be measured on the date of the execution of such Board-approved Milestone 2 Partnership Agreement or the consummation of such Qualified Equity Financing, as applicable, all of the foregoing as more particularly provided in the agreement with respect to such Optionsthe Milestone 2 Option to be entered into between the Company and the Executive in form and substance acceptable to the Board. The "Xxxxxx'x Stock Value" shall Milestone 2 Option will be exercisable at a per share exercise price equal to the closing price fair market value per share of the Common Stock on the grant date of the Milestone 2 Option, as determined by the Board, the foregoing to be more particularly provided in the above referenced option agreement. Subject to the provisions set forth in paragraph (c) below that provide for the acceleration of the vesting of the Milestone 2 Option, the Milestone 2 Option shall vest twenty-five percent (25%) on the anniversary of the date of grant and monthly thereafter until the Milestone 2 Option has become fully vested and exercisable with respect to all of the Milestone 2 Option Shares. (c) In the event of a share Change in Control (as defined in the Company’s 2012 Equity Incentive Plan, as may be amended or modified from time to time (the “Plan”)), so long as the Executive agrees to remain employed by the Company (or any of Company Common Stock its affiliates or the successor in such Change in Control) for a period of six (6) months following the consummation of the Change in Control, then each of the Option, the Milestone 1 Option, and the Milestone 2 Option, if any, that shall then be issued and outstanding and not fully vested and exercisable for all of the respective Option Shares, the Milestone 1 Options Shares or the Milestone 2 Option Shares, as reported on the American Stock Exchange on the Business Day applicable, immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation consummation of such holders' Options at Change in Control, shall automatically accelerate and become vested and exercisable, effective simultaneously with the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise consummation of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights Change in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsControl.

Stock Options. 2.6.1(i) The Executive shall be eligible to participate in a new Stock Option Plan (the "Plan") to be established by the Company subject to stockholder approval at the next convened annual general meeting of the Company's stockholders. At In the Effective Timeevent the Plan is approved by the stockholders, each Optionthe Executive shall receive grants of options thereunder as provided in subsection 5(c)(ii) hereof and at such other times as consideration shall be given by the Board or such committee to the grants of stock options generally to senior executive officers of the Company. If the Plan shall not be approved by the stockholders or if the Plan is approved by the stockholders but shall subsequently be terminated or if no options remain available for grant thereunder, whether or not vestedthe Executive shall be entitled to participate in such other incentive program as the Company may substitute for the Plan for its senior executive officers. (ii) Subject to approval of the Plan by the stockholders and in connection with the employment of the Executive by the Company, that has the Company will issue to the Executive 275,000 stock options at an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelledof $2.50 per share, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments pursuant to the terms and conditions of the Plan and a Stock Option Agreement to be executed between the Company and the Executive following approval of the Plan (the "Stock Option Agreement"). The stock options will have a term of 10 years. The stock options will have a three year vesting schedule with one-third of such options becoming exercisable at the end each of the first, second and third years of the Stock Option Plans, Agreement and will become fully vested and non-forfeitable in the individual Option agreements or event of a change of control of the Options that are necessary Company. In the event of any termination of Executive's employment with the Company pursuant to give effect to the transactions contemplated by this Agreement, : (i) any non-vested options shall be cancelled and shall be of no further force or affect; and (bii) any vested options shall take reasonable steps necessary to obtain at the earliest practicable date all written consents be cancelled and shall be of no further force or affect if not exercised by Executive within ninety (if necessary90) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender days of any Options and termination of Executive's employment with the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsCompany.

Stock Options. 2.6.1The Company shall establish an incentive stock option plan for the executives, employees and directors of the Company (the "Plan"). At The participants in the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value Plan shall be cancelledentitled to purchase, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal pursuant to the Options Spread Value. For any holder options to be granted thereunder (which may be "incentive stock options" within the meaning of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (iSection 422(b) the product of the Xxxxxx'x Stock Value multiplied by the Internal Revenue Code, or non-incentive stock options) an aggregate number of shares of Company the Company's common stock, one-third cent par value (the "Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The Stock"Xxxxxx'x Stock Value" ), as shall be equal to approximately 20% of the closing price total number of a share shares of Company Common Stock which shall be issued and outstanding upon consummation of the stock purchase agreement dated of as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective TimeMay 3, 1999 between the Company and the Executive (a) shall take all reasonable steps necessary to make any amendments to the terms of "post-agreement issued and outstanding shares"). As soon as practically possible after the Stock Option Plans, Plan has been authorized by the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective TimeCompany's shareholders, the Company shall take all reasonable register the Common Stock to be issued upon exercise of the options to be granted thereunder for sale by the Company, and necessary actions for resale by holders thereof, pursuant to advise the holders Securities Act of Options 1933, as amended. The Executive, together with the Company's new President, Xxxxxx X. Xxxxxx, and such other executives as shall be hired by the Company during the term of their respective rights under this Agreement (includingupon the advice of Xx. Xxxxxx, without limitationshall be entitled to purchase, pursuant to the options to be granted under the Plan an aggregate number of shares of Common Stock as shall be equal to 10% of the total number of post-agreement issued and outstanding shares. The exercise price for each of such options shall be $1.00 per share or the fair market value of the Common Stock on the date of grant thereof, whichever shall be greater. The vesting of such options shall occur at the rate of 25% per annum at the end of each Review Period during the Employment Period, and the exercise of all vested options shall be conditioned upon the achievement of a set of pre-determined earnings, revenue and other performance targets to be formulated by the Board or the committee administering the Plan. The term of such options shall be the 51 month period commencing on the date of commencement of the Employment Period. The Plan and such options shall provide that, upon the death, disability or termination of employment of the Executive other than "for cause," all options which shall then have vested, or which would have vested if such event had occurred on the last day of the then current Review Period, shall be exercisable by the Executive, or by the person or persons to whom such options shall pass by will or by the laws of descent and distribution, as contemplated by Section 7.13)the case may be, during the Optionssix month period following the date of occurrence of such event, provided, that, all applicable conditions to the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights options shall have been satisfied on or before the date of exercise thereof. Each option granted pursuant to the Plan shall also contain such other terms, limitations and obligations conditions as the Board or the committee administering the Plan shall deem appropriate pursuant to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsPlan.

Stock Options. 2.6.1. At (i) Promptly following the Effective Timedate the Executive commences employment hereunder, each Optionthe Company shall grant to the Executive an option to purchase Thirty-Seven Thousand, whether or not vested, that has Five Hundred (37,500) shares of the common stock of Holdings at an exercise price that is equal of Thirty Dollars and Forty-One Cents ($30.41) per share, as determined by Xxxxxxxx Xxxxx (the “Option”). The Option and the shares which are subject to or greater than the Xxxxxx'x Stock Value Option shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal subject to the Options Spread Value. For any holder terms and conditions, including vesting and forfeiture provisions, of Optionsthe PTHR Holdings, Inc. 2005 Stock Option Plan, the "Options Spread Value" shall Amended and Restated Stockholders Agreement of Holdings dated as of January 11, 2006 between Holdings and its stockholders and a stock option certificate, copies of which have been provided to the Executive, and each as may be equal to, with respect amended from time to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less time. (ii) In addition to granting the aggregate exercise price with respect Executive the right to such Options. The "Xxxxxx'x Stock Value" shall be equal to purchase common stock of Holdings under Section 4(b)(ii) hereof and granting him the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective TimeOption, the Company shall offer the Executive the opportunity to purchase on July 1, 2006 or as soon thereafter as is practical, Sixteen Thousand, Four Hundred and Forty-Two (a16,442) shall take all reasonable steps necessary to make any amendments to the terms shares of the Stock Option Planscommon stock of Holdings at a price per share of Thirty Dollars and Forty-One Cents ($30.41), as determined by Xxxxxxxx Xxxxx, which shares, if the individual Option agreements or the Options that are necessary Executive exercises his right to give effect purchase them, may not be sold prior to the transactions contemplated by this AgreementSeptember 4, and 2007. (biii) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time Except as provided in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable 4(b)(ii) and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13Sections 4(c)(i) and 4(c)(ii), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options Executive shall have any rights in respect of such Options, other than not be eligible to receive consideration in the manner described in Section 2.6.1 (any other stock options, restricted stock or other equity of Holdings, whether under an equity incentive plan or otherwise, except as otherwise contemplated expressly authorized for him individually by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options hadBoard, or may have hada delegated committee thereof properly charged with the authority to administer such plan, in respect of its discretion. Prior to issuing the Option or any other equity to the Executive, Holdings may require that the Executive provide such Optionsrepresentations regarding the Executive’s sophistication and investment intent and other such matters as Holdings reasonably may request.

Stock Options. 2.6.1. At the Effective Time, each Option, whether (a) Each option or not vested, that has an exercise price that is equal right to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of purchase shares of Company Common Stock subject to such Options less (iieach a “Company Stock Option”) under the aggregate exercise price Company’s 2006 Incentive Compensation Plan (the “2006 Plan”), the Company’s 1998 Incentive Compensation Plan (the “1998 Plan”), the Company’s 1995 Non-Employee Directors’ Stock Option Plan (the “1995 Plan”), the Company’s 1988 Non-Qualified Stock Option Plan (the “1988 Plan”), and the Company’s 1986 Stock Option Plan (the “1986 Plan”, together with respect to such Options. The "Xxxxxx'x the 2006 Plan, the 1998 Plan, the 1995 Plan, and the 1988 Plan, the “Company Stock Value" shall be equal Plans”), whether vested or unvested, that is outstanding immediately prior to the closing price Effective Time shall, as of a the Effective Time, become fully vested and each holder of an outstanding option under the Company Stock Plans immediately before the Effective Time shall receive, at the Effective Time, an amount of cash (without interest) for each share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior underlying such option equal to the Effective Timeexcess, if any, of (i) the Merger Consideration over (ii) the exercise price per share of such option, and such option shall thereafter be cancelled and of no further force and effect. 2.6.2. (b) [INTENTIONALLY OMITTED] (c) Prior to the Effective Time, the Board of Directors of the Company (aor, if appropriate, any committee thereof administering the Company Stock Plans) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of adopt such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, resolutions as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations may be required to effectuate the provisions of Sections 2.03(a) and 2.03(d). (d) Following the date hereof, participants in the ESPP may not increase their payroll deductions or purchase elections under the ESPP from those in effect on the date of this Section 2.6 and Section 7.13Agreement. From and after Each participant’s outstanding right to purchase shares of Company Common Stock under the Company’s ESPP shall terminate on the day immediately prior to the day on which the Effective TimeTime occurs, no holder of Options shall have any rights in respect provided that all amounts allocated to each participant’s account under the ESPP as of such Options, other than date shall thereupon be used to receive consideration in purchase from the manner described in Section 2.6.1 (except Company whole shares of Company Common Stock at the applicable price determined under the terms of the ESPP for the then outstanding offering periods using such date as otherwise contemplated by Section 7.13). The surrender of any Options the final purchase date for each such offering period and the receipt ESPP shall terminate immediately following such purchases of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsCompany Common Stock.

Stock Options. 2.6.1. At Executive will receive as of the Effective Time, each Option, whether or not vested, that has Commencement Date the grant to Executive of (i) an exercise incentive stock option qualified as such pursuant to the Internal Revenue Code to purchase from the Company 330,000 shares of the company's common stock at a price that is equal to or greater than fair market value per share at the Xxxxxx'x Stock Value date of grant, which shall be cancelled, without any payment or other consideration therefor$0.21 per share. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, Such options shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal granted pursuant to the Options Spread Value. For any holder of Options, Company's existing stock option plan (the "Options Spread Value" Plan") and shall be equal to, evidenced by an appropriate option agreement. This option will become exercisable with respect to such Optionsone-sixtieth (1/60) of the total number of shares an each successive monthly anniversary of the Commencement Date until all shares covered thereby have become exercisable, provided that in the difference, if positive, between event that the Executive's employment by the Company is terminated without cause pursuant to Section 9(d) hereof or is terminated as a result of the Executive's death or disability (i) within the product first twelve months after the Commencement Date, this option will accelerate and become immediately exercisable with respect to an additional one-fifth (1/5) of the Xxxxxx'x Stock Value multiplied by the total number of shares of Company Common Stock subject to such Options less this option and (ii) at or subsequent to twelve months after the aggregate exercise price Commencement Date, this option will accelerate and become immediately exercisable with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal the greater of (A) an additional one-fifth (1/5) of the total number of shares subject to this option and (B) 40% of the closing price then-unvested shares subject to this option, and provided further, that in the event that, as the result of a share any sale of the Company's equity securities, merger, consolidation, sale of assets, or proxy contest, the persons who were directors of the Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to such transaction shall not constitute a majority of the Effective Time. 2.6.2. Prior to the Effective Time, Board of Directors of the Company (aor of the board of directors of any successor to or assign of the Company) shall take all reasonable steps necessary to make any amendments immediately after the next election of directors of the Company (or such successor or assign) following such transaction, this option will accelerate and become immediately exercisable with respect to the terms total number of shares subject to this option. Once the Stock Option Plansoption becomes exercisable with respect to a number of shares, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.option will remain so

Stock Options. 2.6.1. At Subject to the Effective Time, each Option, whether absolute authority of the Stock Option Committee of the Board of Directors of the Company from time to time to grant (or not vestedto grant) to eligible individuals options to purchase common stock of the Company ("Options"), it is the intention of the Company and the expectation of the Executive that has while the Executive is employed hereunder, the Executive will receive Options annually, on the following terms and conditions (and any Options so granted shall be subject to the following terms and conditions, which shall govern any conflicts in the terms hereof with any terms and conditions in any stock option agreement): (a) Target awards will be in an exercise price that is amount (plus or minus 25%) equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder 150% of such Options shall receive in lieu Executive's salary; (b) For purposes of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by determining the number of shares of Company Common Stock subject to a given Option grant, the value of such Option shall be determined using the Black-Scholes valuation method, or another generally recognized valuation method which is being used uniformly by the Company for its senior executives; (c) The exercise price per share of the Options shall be the fair market value of the common stock on the date of grant, and the Options shall expire on the tenth anniversary of the date of grant; and (d) The Options shall vest ratably on the first three anniversaries of the date of grant; provided, however, that all such Options less and all other options to purchase Common Shares then held by the Executive which are not then vested (ii) in the aggregate exercise price with respect being referred to herein as "Accelerated Options") shall become fully vested and immediately exercisable during the remaining original term of each such Options. Accelerated Option, upon the occurrence of any of the following events ("Acceleration Events"): Executive's Retirement (as defined herein), death, Disability, a Change in Control (as defined herein), and termination of Executive's employment by the Company without Cause or by the Executive for Good Reason; and (e) The "Xxxxxx'x Stock Value" Options shall be equal granted on such other terms and conditions as are generally made applicable to Options granted to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms other senior executives of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1Company. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At The Executive will be granted stock options for a minimum of 10,000 unregistered, restricted shares of Common Stock of Bancorp on each of December 31, 2000, December 31, 2001, December 31, 2002, and October 16, 2003 (said latter date to be extended to December 31, 2003 in the Effective Timeevent of the Executive remains employed by the Bank after October 16, each Option2003), whether or not vested, that has an exercise exercisable for a period of ten (10) years from the date of grant and exercisable at a price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Valuefair market value of such shares on each such date of grant, all as determined by and subject to the terms of a stock option plan to be approved by the Board of Directors and the shareholders of the Bancorp. For In the event that any holder of Optionsfuture stock options are granted to any other employees or directors containing terms or conditions more favorable than the aforesaid options granted to the Executive, or any existing and outstanding options are modified to include any such more favorable provisions, the "Options Spread Value" Executive shall have the right to have the terms and conditions of his stock options modified to incorporate such more favorable terms. In the event that the Board determines, in its reasonable discretion, that any of the aforesaid stock options for the Executive cannot be equal to, with respect to such Optionsgranted, the differenceExecutive shall have the right to receive, if positiveas additional compensation, between within 30 days of the Determination Date (i) as defined below), an amount equal to the product of (A) the Xxxxxx'x Stock Value multiplied by difference between (1) the number market value of shares a share of Company Common Stock subject of Bancorp underlying such option had it been available on the date of the scheduled award (such market value to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the average of the closing price of a share of Company the Common Stock of Bancorp as reported on by the American NASDAQ Stock Exchange on Market Inc. for the Business Day immediately ten (10) trading days prior to the Effective Time. 2.6.2respective December 31) and (2) the market value of a share of Common Stock of Bancorp on the date chosen by the Executive during the ten year period after the date of the scheduled award (the date chosen by the Executive, the "Determination Date"), multiplied by (B) the number of shares of Common Stock of Bancorp which would have been covered by such option had it been granted. Prior The Determination Date shall be the date immediately preceding the date on which a written notice is received by the Bank via overnight mail service and the applicable market value shall be the closing price of the shares of Bancorp on the Determination Date. Alternatively, the Executive may hand-deliver such a written notice to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms Chairman of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders Board of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and Bancorp after the Effective Time, no holder closing of Options the NASDAQ market on any date during said period stipulating that such date shall have any rights be the Determination Date in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13)aforesaid procedure. The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 aforesaid cash amount shall be deemed a release of any and all rights payable to the holder of such Options had, or may have had, Executive only in respect of option shares which otherwise have been fully vested as of any Determination Date. In the event the Employment Period is terminated for cause (as defined herein), or is otherwise terminated by the Executive or by reason of Executive's death or disability, the Executive shall forfeit the right to exercise any of the aforesaid options, provided, however, that in the event of a termination based upon a Change of Control (as hereinafter defined), or a termination other than for cause or by reason of the Executive's death or disability, all granted but unvested options will be deemed to fully vest at the time of such Optionstermination.

Stock Options. 2.6.1. At (a) The Executive will receive an option to purchase 100,000 shares of the Effective Time, each Option, whether or not vested, that has Company's Common Stock under the Company's 2000 Equity Incentive Plan (the "Plan") at an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing sale price of a share of Company the Company's Common Stock as reported on the American Stock Exchange Nasdaq National Market on the Business Day immediately prior to date approved by the Effective Time. 2.6.2Compensation Committee of the Board of Directors. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments Such option will be subject to the terms and conditions of the Stock Option Plans, Plan and will vest in accordance with the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and Company's standard vesting schedule. (b) shall take reasonable steps necessary If and when the Company's 2001 Broad Based Equity Incentive Plan (the "Broad Based Plan") is adopted by the Board of Directors, the Executive will receive an option to obtain purchase 250,000 shares of the Company's Common Stock under the Broad Based Plan at an exercise price equal to the earliest practicable date all written consents (if necessary) from holders then current fair market value of Options the Company's Common Stock as reported on the Nasdaq National Market. Such option will be subject to effect terms and conditions of the cancellation of such holders' Options at the Effective Time Broad Based Plan and will vest in accordance with Section 2.6.1the Company's standard vesting schedule. 2.6.3. At or prior to (c) If the Effective TimeBroad Based Plan is not adopted by the Board of Directors, then at the next annual meeting of the Company's stockholders the Company shall seek approval from the Company's stockholders for an increase in the number of shares reserved under the plan of at least 250,000 shares; upon such approval, the Company shall take all reasonable grant Executive an option to purchase 250,000 shares of the Company's Common Stock under the Plan with an exercise price equal to the then current fair market value as reported on the NASDAQ National Market and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options option shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor vest in accordance with Section 2.6.1 the Company's standard vesting schedule, provided however, that the Vesting Commencement Date for such option shall be deemed a release the date hereof; (d) If the Broad Based Plan is not adopted by the Board of any the Directors and all rights the holder stockholders of the Company do not approve an increase in the Plan as set forth in Section 8(c) hereof, the Executive will be entitled to receive (i) two (2) additional grants under the Plan of 125,000 shares of the Company's Common Stock each to occur on December 17, 2002 and December 17, 2003 with exercise prices equal to the then current fair market values as reported on the NASDAQ National Market on such Options haddates and such options shall vest in accordance with the Company's standard vesting schedule, provided however, that the Vesting Commencement Date of each such option shall be the date hereof; or (ii) such other alternative compensation that the Executive and the Company may have had, in respect of such Optionsagree upon.

Stock Options. 2.6.1The Company has reserved 620,105 shares of Company Common Stock for issuance under the Company Option Plan, of which options with respect to 198,810 shares are outstanding as of the date of this Agreement. At Part 2.3(b) of the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal toDisclosure Schedule accurately sets forth, with respect to such Options, each Company Option that is outstanding as of the difference, if positive, between date of this Agreement: (i) the product name of the Xxxxxx'x holder of such Company Option; (ii) the total number of shares of Company Common Stock Value multiplied by that are subject to such Company Option and the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to which such Options. The "Xxxxxx'x Stock Value" Company Option is immediately exercisable; (iii) the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option and whether the vesting of such Company Option shall be subject to any acceleration in connection with the Merger or any of the other transactions contemplated by this Agreement; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; and (vi) whether such Company Option is an “incentive stock option” as defined in Section 422 of the Code. Each grant of a Company Option was duly authorized no later than the date on which the grant of such Company Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the board of directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, each such grant was made in accordance with the terms of the applicable compensation plan or arrangement of the Company and all other applicable Legal Requirements, the per share exercise price of each Company Option was equal to the closing price fair market value of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, applicable Grant Date and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of each such holders' Options at the Effective Time grant was properly accounted for in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration GAAP in the manner described in Section 2.6.1 financial statements (except as otherwise contemplated by Section 7.13). The surrender including the related notes) of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.the

Stock Options. 2.6.1. At On the Effective TimeCommencement Date (or, each Optionif later, whether or not vestedthe date on which the fair market value of the Company’s common stock is determined under the terms of the Impsat Fiber Networks, that has an exercise price that is equal to or greater than Inc. 2003 Stock Incentive Plan (the Xxxxxx'x Stock Value shall be cancelled“2003 Long Term Incentive Plan”), without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal and subject to the Options Spread Value. For any holder approval of Optionsthe Compensation Committee, the "Options Spread Value" shall be equal toExecutive shall, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments pursuant to the terms of the Stock 2003 Long Term Incentive Plan, be granted an option, which is not an incentive option under Section 422 of the Internal Revenue Code (the “Option”), for 154,350 shares of the Company’s common stock. The exercise price per share for each of the Option Plansshares shall be U.S.$15.00 (or, if greater, the individual Option agreements or fair market value of the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitationstock, as contemplated by Section 7.13)determined under the 2003 Long Term Incentive Plan, on the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise date of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13grant). The surrender term of any Options the Option will be eight years from the date of the Option’s grant. Subject to Section 6.6 hereof, the Option shall vest in four installments: One-quarter of the Option shares shall vest on the Commencement Date; one-quarter of the Option shares shall vest on the first anniversary of the Commencement Date; one-quarter of the Option shares shall vest on the second anniversary of the Commencement Date; and the receipt final one-quarter of consideration therefor the Option shares shall vest on the third anniversary of the Commencement Date, but, in accordance each case, only if the Executive is still employed with Section 2.6.1 the Company on such respective date. The grant to the Executive of the Option shall be deemed a release without prejudice to any other share options which may be granted to the Executive in the future under any plan adopted by the Company. The grant of any and all rights the holder of such Options had, or may have hadOption shall, in respect all events, be subject to the terms and conditions of such Optionsthe 2003 Long Term Incentive Plan, and shall be effectuated by a non-statutory stock option agreement between the Company and the Executive entered into pursuant to the 2003 Long Term Incentive Plan.

Stock Options. 2.6.1. At So long as this Agreement remains in full force and effect, and subject to approval by the Effective TimeBoard, each Option, whether or not vested, that has the Employee will be granted the right and option to purchase up to One Hundred Thirty Five Thousand Five Hundred Eighty (135,580) shares (the “Shares”) of the Common Capital Stock of the Company (the “Stock”) at an exercise price that based upon the fair market value of the Common Stock on the date the grant is equal approved by the Board. The options granted herein shall vest in accordance with the following schedule: Thirty Three Thousand Eight Hundred Ninety Eight (33,898) options shall vest on November 13, 2019, and thereafter, an additional Two Thousand Four Hundred Twenty One (2,421) options shall vest monthly with the first monthly vesting occurring on December 13, 2019 and on the 13th day of each month thereafter occurring during the Employment Term. As a condition precedent to or greater than this grant, the Xxxxxx'x Employee shall execute and deliver the Company’s standard form Incentive Stock Value Option Agreement and the grant shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms and conditions of the Incentive Stock Option PlansAgreement and the Company’s Stock Option and Restricted Stock Plan. At such time as the parties agree to increase the Employee’s time commitment to forty (40) hours, the individual Option agreements or Employee will be granted the Options that are necessary right and option to give effect purchase up to an additional One Hundred Thirty Five Thousand Five Hundred Eighty (135,580) Shares of the transactions contemplated Common Capital Stock of the Company at an exercise price based upon the fair market value of the Common Stock on the date the grant is approved by this Agreement, and (b) the Board. The additional options granted herein shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time vest in accordance with Section 2.6.1. 2.6.3the following schedule: Thirty Three Thousand Eight Hundred Ninety Eight (33,898) options shall vest six (6) months from the date that the Employee commenced working as a full time employee, and thereafter, an additional Two Thousand Four Hundred Twenty One (2,421) options shall vest monthly with the first monthly vesting occurring on the applicable monthly date of the seventh (7th) month following the Employee becoming a full time employee and on the like monthly anniversary date thereafter occurring during the Employment Term. At or prior As a condition precedent to this grant, the Employee shall execute and deliver the Company’s standard form Incentive Stock Option Agreement and the grant shall be subject to the Effective Time, terms and conditions of the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Incentive Stock Option Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Company’s Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsRestricted Stock Plan.

Stock Options. 2.6.1In addition to the Base Salary and bonus provided to the Executive pursuant to Article 4, the Executive shall receive a minimum of 75,000 options for the purchase of Russxxx Xxxporation common stock annually, which amount may be increased at the Board's discretion based on the Executive's performance. At The exercise price for these options shall equal the average of the high and low of the stock price on the day the grant is made. Such options shall have a term of ten years and one-third of the total options given in any year shall vest in each of the three years following the grant of the options. Provided, however, that in 1998 the Executive shall be granted 125,000 options on the Effective TimeDate for the purchase of Russxxx Xxxporation common stock (the "1998 Options"). The exercise price for the 1998 Options shall be the average price of the stock on the Effective Date. If the Executive's employment is terminated for any reason other than For Cause, each Optionall options granted under this Article 5 shall immediately become vested and shall be exercisable at the Executive's option for a period of three (3) years from the date of termination; if the Executive's employment is terminated For Cause, whether or all options granted under this Article 5 that are not vestedvested as of the Termination Date shall lapse and be forfeited to the Company. Provided, however, that has if the Russxxx xxxreholders do not approve the necessary amendment to the Russxxx Xxxck Option Plan at their April, 1998 meeting allowing an exercise price increase in the number of options that is equal may be granted annually to or greater than any one employee any options previously granted hereunder in excess of the Xxxxxx'x Stock Value limit shall lapse and be cancelledforfeited to the Company and the Executive shall receive: (i) 50,000 shares of restricted stock of Russxxx xxx cash in the amount of $1,282,727 for the value of 50,000 options (determined pursuant to Exhibit A), without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of his 1998 Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less ; and (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price 50,000 shares of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms restricted stock in lieu of the Stock Option Plans, the individual Option agreements or the Options that are necessary 75,000 stock options to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date be granted in all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights subsequent years under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsArticle 5.

Stock Options. 2.6.1. At As soon as practicable following Executive’s commencement of employment, and subject to approval of the Effective TimeBoard (or an authorized committee thereof), each Optionthe Executive shall receive a stock option to purchase ten percent (10%) of the shares of common stock of the Company (calculated on a fully diluted basis as of such grant date, whether assuming the exercise and conversion of all exercisable or not vestedconvertible securities, that has and including any shares reserved for issuance pursuant to an equity incentive plans or other arrangements) at an exercise price per share equal to the fair market value of such shares on the date of grant as reasonably determined by the Board in good faith (the “Initial Stock Option”). The Initial Stock Option will vest and become exercisable with respect to fifty percent (50%) of the total number of shares on the date that is equal six (6) months from the date of grant or, if earlier, the date that is nine (9) months after October 19, 2011. The other fifty percent (50%) (the “Remaining Shares”) shall vest monthly on the first day of each month, commencing on January 1, 2012, at a rate of 1/36th of the total number of Remaining Shares per month. Vesting will be subject to continued employment on each vesting date and acceleration as set forth in Sections 5 and 6 below. In addition, following each time that the Company issues shares of capital stock or greater than securities convertible into shares of capital stock until such time as the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable Company has raised an aggregate of $10,000,000 after the Effective Time, each holder Date through the sale of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Optionssecurities, the "Options Spread Value" Company shall be equal toissue to Executive, with respect subject to such Options, the difference, if positive, between (i) the product approval of the Xxxxxx'x Stock Value multiplied by Board (or an authorized committee thereof), an additional stock option grant (each, an “Additional Option”), such that the total number of shares of Company Common Stock common stock subject to such the Initial Stock Option and all Additional Options less held by Executive shall be ten percent (ii10%) of the aggregate fully diluted capitalization of the Company, calculated as set forth above. The exercise price with respect per share of each Additional Option shall be the fair market value of such shares on the date of grant. Each Additional Option shall vest and be subject to such Optionsacceleration according to the same vesting schedule as the Initial Stock Option. The "Xxxxxx'x Initial Stock Value" Option and each Additional Option shall be equal to granted under the closing price of a share of Company Common Company’s 2011 Stock as reported on Incentive Plan (the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time“2011 Plan”), the Company (a) shall take all reasonable steps necessary to make or any amendments successor plan thereto, and pursuant to the terms of the Company’s then standard form stock option agreement approved by the Board. Collectively, the Initial Stock Option Plans, the individual and each Additional Option agreements or the Options that are necessary referred to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective “Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.”

Stock Options. 2.6.1. At Subject of approval by the Effective TimeHoldings Board, each Executive shall be granted an option (the “Option”) to purchase a total of 1,725,000 shares of common stock of Holdings pursuant to the Educate, whether or not vestedInc. 2003 Omnibus Stock Incentive Plan (the “Plan”), that has an with a per share exercise price that is equal to $2.97. The Option shall vest as to 1/36 of the shares subject to the Option at the end of each full month following the date of grant. In the event of a “Change of Control” of the Company, the Option shall vest in full and become and remain immediately exercisable at such time as will permit him to exercise the Option in connection with the Change of Control and, if not therein exercised, shall remain outstanding and exercisable for the longer of two (2) years (six (6) months in the event the Change of Control occurs at any time following any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act of 1933, as amended, (“IPO”)) or greater than the Xxxxxx'x Stock Value duration provided in the Plan, but in no event shall such Option be exercisable following the expiration date. Except as otherwise provided, the Option shall be cancelledsubject to the terms and conditions of the Plan and the form of option agreement approved by the Board. The Executive may immediately or in the future transfer or direct the Company to provide directly, without any payment the Executive’s vested and unvested Option to Sterling Partners I, L.P. (the “Options Transferee”). In the event the Executive elects to transfer or other consideration therefor. At direct the Effective TimeCompany to provide directly, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal Executive’s vested and unvested Option to the Options Spread Value. For any holder of OptionsTransferee, the "Options Spread Value" Executive agrees that the Company shall be equal to, under no obligation to any additional registration obligations with respect to such Options, the difference, if positive, between (i) the product shares issuable upon exercise of the Xxxxxx'x Stock Value multiplied Option by the number of shares of Company Common Stock subject Options Transferee. The parties agree that the compensation described in this Section 3.5 may actually be provided through options or restricted stock as the parties may mutually agree and that all references throughout this Agreement to such Options less (ii) “options” will be deemed to refer to the aggregate eventual compensation arrangement under this section, and that any references to share numbers or exercise price prices with respect to such Options. The "Xxxxxx'x Stock Value" options shall be equal not apply to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior restricted stock unless specifically agreed to the Effective Timeby both parties. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At (i) On the Effective TimeDate, each Optionin accordance with the approval of the Compensation Committee of the Board, whether or not vestedthe Executive shall be granted non-qualified stock options (the "Options") to purchase 1,600,000 shares of common stock, that has an par value $.01 per share, of the Company (the "Common Stock"). The exercise price that is equal to or greater than of the Xxxxxx'x Stock Value Options shall be cancelledthe fair market value of the Common Stock on the date of grant, without any payment or other consideration therefor. At the Options shall have a term of 10 years and one-fifth of the Options shall become exercisable on each of the first five anniversaries of the Effective TimeDate. If the Executive's employment is terminated pursuant to Section 4(a) or 4(b) hereof, except as otherwise provided in Section 7.13, all other Options, whether or not vested, any Options then unexercisable shall immediately become exercisable and may thereafter be cancelled and, as soon as reasonably practicable after exercised until and including the Effective Time, each holder earlier to occur of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product date which is two years following the termination of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less employment or (ii) the aggregate exercise price with respect expiration date of the term of the Options. If the Executive's employment is terminated pursuant to such Section 4(d) or 4(f) hereof, one-half of any Options then unexercisable shall immediately become exercisable and may thereafter be exercised until and including the earlier to occur of (i) the date which is two years following the termination of employment or (ii) the expiration date of the term of the Options. The "Xxxxxx'x Stock Value" Options shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments subject to the terms and provisions of the Company's 2000 Incentive Stock Option Plan and the Award Notice of Stock Option Grant ("Award Notice") and the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), "Option Agreement") relating to the Options, the respective Option agreements which Award Notice and the respective Stock Option PlansAgreement shall be in the form attached hereto as Exhibit A. (ii) Beginning with the 2002 fiscal year, subject to facilitate the timely exercise approval of such rights and obligations the Compensation Committee of the Board, the Executive shall be granted annually non-qualified stock options to effectuate purchase 150,000 shares of Common Stock (subject to adjustment in the provisions event of this Section 2.6 and Section 7.13. From and after the Effective Timea stock split, no holder stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of Options shall have shares, liquidation, spin-off or other similar change in capitalization or event, or any rights in respect distribution to holders of such Options, Common Stock other than a regular cash dividend), each such option to receive consideration in the manner described have terms substantially similar to those set forth in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options3(d)(i) hereof.

Stock Options. 2.6.1(a) The Company has previously granted to Executive various stock options to purchase shares of the Company’s common stock (the “Shares”), pursuant to the Company’s 2000 Stock Plan (the “Plan”). At As a result of the Effective Timeforegoing grants, each Option, whether or not vested, vesting that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal occurred thereunder to the Options Spread Value. For any holder date of Optionsthis Agreement, and vesting accelerations approved by the Board on March 28, 2006, the "Options Spread Value" shall be equal tooptions currently held by Executive are as follows: 8-22-05 ISO 72,000 $ 5.00 22,500 Vested 16,500 on 8-22 of 2007, with respect to such Options, the difference, if positive, between 2008 and 2009 8-22-15 (ib) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal In addition to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Timeforegoing outstanding options, the Company (a) shall take all reasonable steps necessary has also agreed to make any amendments grant to Executive the additional stock options described on Exhibit A hereto, pursuant to the terms of the 2000 Stock Option PlansPlan, and in each case subject to satisfaction of the individual Option agreements or respective milestones specified on Exhibit A and Executive’s being employed hereunder at the Options time the Board determines that are necessary to give effect such milestone has been satisfied. Such additional options shall be exercisable at a price equal to the transactions contemplated fair market value of the Company’s common stock as determined by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of Board on such holders' Options at the Effective Time in accordance with Section 2.6.1date. 2.6.3. At or prior to (c) If the Effective TimeCompany’s common stock is registered under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”), the Company shall take use its good faith efforts to register under the Securities Act of 1933 on Form S-8 (or any successor form) all reasonable common stock issued and/or issuable under the 2000 Stock Plan, including the Shares subject to the options described above and necessary actions all other stock options granted or awarded to advise the holders of Options of their respective rights Executive under this Agreement (including, without limitation, or otherwise under the 2000 Stock Plan; and shall use its good faith efforts to qualify such common stock for sale under such state securities or ‘blue sky’ laws as contemplated by Section 7.13), the Options, Company shall determine are required to issue the respective Option agreements shares of common stock under the 2000 Stock Plan and for the respective Stock Option Plans, to facilitate the timely exercise resale of such rights and obligations to effectuate shares by the provisions of this Section 2.6 and Section 7.13. From and after recipients thereof, provided that the Effective Time, no holder of Options Company shall have no obligation to qualify such stock in any rights particular jurisdiction in respect which the Company would be required to execute a general consent to service of process in effecting such Optionsqualification, other than unless the Company is already subject to receive consideration service in the manner described in Section 2.6.1 (such jurisdiction and except as otherwise contemplated may be required by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsSecurities Act.

Stock Options. 2.6.1. At (i) The Company hereby grants Executive stock options to purchase approximately 2,675,000 shares of Common Stock (representing 3% of the fully diluted in-force option, warrant and equity shares of the Company), for a purchase price of $1.20 per share, which options shall expire on the tenth anniversary of the Effective TimeDate hereof (subject to earlier termination of such options as provided in this Section 4.c. This grant of options is subject to ----------- any requisite shareholder approval which shall be obtained by the Company on or prior to September 1, 1999. The stock options to be received by Executive shall vest and become exercisable in four increments as follows: 25% of such option shares on the Effective Date, 25% of such option shares each Optionon the first, second and third anniversary of the Effective Date hereof (each annual period ending on an anniversary of the Effective Date hereof being referred to herein as an "Option Year") of this Agreement. Except as specifically provided in this Section 4.c, once options become exercisable, such options shall remain ----------- exercisable through the expiration date and may be exercised whether or not vestedthe Executive's employment with the Company has terminated. Such options shall be incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986 to the extent of the maximum number of such options which may so qualify. In the event of a public offering of the Company' securities, Executive agrees that has an he will execute the same form of agreement not to sell securities ("Lock-Up Agreement") executed by the other executives of the Company as required by the Company's underwriters. In the event of a stock split, reverse split, stock dividend, recapitalization or other reclassification in the Company's common stock, the exercise price that is equal of any options granted pursuant to or greater than the Xxxxxx'x Stock Value this Agreement shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options adjusted appropriately to an amount in cash, without interest, equal that bears the same relationship to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect exercise price in effect immediately prior to such Optionsaction as the total number of shares of common stock (or shares of any security into which such common shares have been reclassified, the differencesubdivided, if positivesplit or otherwise changed) outstanding immediately after such action; in such event, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject for which an option is exercisable shall be adjusted to such Options less (ii) a number obtained by dividing the aggregate exercise price with respect in effect prior to adjustment thereof by the new exercise price after such Optionsadjustment. The "Xxxxxx'x Stock Value" Such adjustments shall be equal made successively when any event described above occurs. As used in this agreement, "Company" includes any parent entity which at any time owns HOB Entertainment, Inc. or operates the business theretofore operated by HOB Entertainment, Inc. and its Affiliates. On the tenth (10th) day following the termination of the Executive's employment pursuant to Section 5.c (By the closing price Company for Cause), all options ----------- granted hereunder (including options which are then exercisable) shall terminate. In the event of a share the termination of the Executive's employment by the Executive, all options not exercisable upon such termination shall lapse and terminate. In the event that the Executive's employment terminates pursuant to Section 5.a (Death), Section 5.b (Disability) or Section 5.d (By the Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time----------- ----------- ----------- Other than for Cause), then in such event, the Company (a) shall take all reasonable steps necessary to make any amendments to Options granted under Section 4.c ----------- which would become exercisable at the terms end of the Stock Option PlansYear in which such termination occurs shall immediately vest and become exercisable and all other options shall lapse and terminate. Upon a Change of Control as herein defined, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by all options granted under this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, options which are not then exercisable at the time of such Change of Control shall immediately become exercisable. For the purposes hereof Change of Control is defined as contemplated follows: (i) any sale, merger, consolidation, issuance of shares (excluding a public offering of shares), or other transaction (each a "Transaction") as a result of which at least 51 % the voting power of the Company (or any parent entity of the Company) is not held, directly or indirectly, by persons or entities who held at least 51% of the voting power before such Transaction; (ii) a sale or other disposition of all or a substantial part of the Company's assets, whether in one transaction or a series of related transactions; (iii) any person or entity or group of persons or entities (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder) acquires the power, through ownership of securities or otherwise, to elect a majority of the Company's or any parent entity's board of directors (or similar governing body) (such power being called "voting power"); other than groups formed by existing Stockholders of the Company on the date hereof, or (iv) individuals who on the date hereof constitute the Company's board of directors and any new director (other than a director designated by a person or entity who has entered into an agreement to effect a transaction described in clause (i) or (ii) above) whose nomination and/or election to the board was approved by a vote of at least a majority of the directors then still in office who either were directors on the date hereof or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Company's or such parent's board of directors. Notwithstanding the foregoing, any changes in ownership, voting or otherwise resulting from the proposed UCI transaction shall not constitute a Change of Control. (ii) The Executive agrees to become a party to the Company's Amended and Restated Stockholders Agreement, dated as of July 31, 1998, and execute a joinder thereto as required by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise 20 of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsagreement.

Stock Options. 2.6.1. At On or before the Effective Timedate of this Agreement, each Option, whether or not vested, that has Company’s Compensation Committee shall grant Executive two options (the “Options”) to purchase an aggregate of 200,000 shares of Company’s common stock (the “Stock”) at an exercise price that per share of $19, which price is equal to or greater than the Xxxxxx'x fair market value of the Stock Value shall on the date hereof and will be cancelled, without any payment equal to or other consideration thereforgreater than the fair market value of the Stock on the date of grant by the Compensation Committee. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such The Options shall receive in lieu vest 20% per year on each anniversary of such Options an amount in cash, without interest, equal to the Options Spread Valueactual grant date for five years. For any holder of Of the 200,000 Options, the "first 100,000 Options Spread Value" (the “Plan Option”) shall be equal to, subject to and granted in accordance with respect the terms and conditions of Company’s 1996 Stock Option Plan in effect as of the Effective Date (the “Plan”). Because Section 3(c) of the Plan currently limits the amount of stock options that can be granted to such Optionsany one person to 100,000 shares in any 365 day period, the difference, if positive, between second 100,000 Options (ithe “Special Option”) will be subject to and granted in accordance with the product terms and conditions of a new stock option plan (the Xxxxxx'x Stock Value multiplied “Special Plan”) that will be adopted by the number Board of shares Directors for the purpose of granting the Special Option and certain other stock options which Company Common Stock subject has agreed to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall issue but which cannot be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to granted under the terms of the Stock Plan. The terms and conditions governing options granted under the Special Plan shall be substantially identical to those governing options granted under the Plan. Company agrees to submit the Special Plan and the Special Option Plansto its shareholders for approval at its next annual or special meeting of shareholders, which is currently expected to occur on or about June 15, 2006, and to register the shares of common stock underlying the Special Plan with the Securities and Exchange Commission on Form S-8. If for any reason the Special Plan or the Special Option is disapproved by the shareholders or is not approved within thirty (30) days of the date of the next annual or special meeting of Company’s shareholders, then the grant of the Special Option shall be cancelled and of no further effect. If the Special Option is so cancelled, Executive shall have the right to receive from Company payment in cash of $950,000 (the “Cash Option Payment”) as liquidated damages on account of Company’s failure to provide the Special Option to Executive. The Cash Option Payment shall be paid by Company on the first business day after the thirty (30) day period following the shareholders meeting if the Special Option has not been approved by Company’s shareholders by that time, provided, however, that the Company may with Executive’s consent (such consent not to be unreasonably withheld) extend by a reasonable period of time the period within which the Company may seek to obtain the required shareholder approval. The Cash Option Payment is an agreement for liquidated damages between the parties on account of the breach of the Agreement by Company resulting from Company’s failure to deliver the Special Option as agreed and does not purport to represent the fair value of the Special Option; rather, the individual Cash Option agreements or Payment has been determined by arms length negotiations between Company and Executive, considering, among other factors, the importance of the Options that are necessary to give effect Executive’s decision to accept Company’s offer of employment in December of 2005, Executive’s determination to accept the transactions contemplated by other terms of this Agreement, including its term, minimum salary and (b) benefits payable upon termination, Executive’s assessment of Company’s future prospects, and hence its stock price, during the ten year term of the Special Option if Executive remains employed by Company for that entire period of time and in consideration of Executive’s waiver of his right to declare a breach of this Agreement for the Company’s failure to provide the Special Options. Accordingly, and considering the difficulty in ascertaining damages for a breach of Company’s obligation to provide the Special Option, the parties agree that the Cash Option Payment will constitute liquidated damages for such breach and that Executive’s receipt of the Cash Option Payment shall take reasonable steps necessary to obtain at be a complete waiver of any claims or rights of Executive resulting from such breach, irrespective of the earliest practicable date all written consents (if necessary) from holders of Options to effect value placed on the cancellation of such holders' Options at the Effective Time Special Option in accordance with Section 2.6.1. 2.6.3. At or prior other contexts, including but not limited to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration value used in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.Company’s financial statements pursuant to FAS 123R.

Stock Options. 2.6.1The Board will promptly grant Executive a stock option to purchase one million two hundred thousand (1,200,000) shares of the Company's common stock. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value The option grant shall be cancelledgoverned by the Company's 2001 Stock Option Plan, without and shall be subject to the terms and conditions of such plan and the Company's standard Stock Option Agreement that Executive shall execute (the "Stock Option Agreement"), which shall include the Company's standard vesting provisions (which provide that, among other things, the option shall vest during the Employment Period over a period of four (4) years, with twenty-five percent (25%) of the option vesting upon the first anniversary of the Start Date, and the remainder of the option vesting in equal monthly installments over the remaining three (3) years). To the extent that there is any payment conflict between this Agreement and the Stock Option Agreement, the terms of this Agreement shall control. The Stock Option Agreement evidencing the stock option granted pursuant to this Agreement, or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vestedan addendum thereto, shall be cancelled andcontain provisions such that in the event of a Change of Control (as defined in Exhibit A hereto) of the Company, as soon as reasonably practicable after Executive shall vest in fifty percent (50%) of the Effective Time, each holder previously unvested portion of such Options shall receive in lieu of such Options an amount in cash, without interest, equal the option granted pursuant to the Options Spread Valuethis Agreement. For any holder of OptionsThereafter, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product remaining portion of the Xxxxxx'x Stock Value multiplied by option shall vest in accordance with the normal vesting schedule based on Executive's continued service (i.e., on each subsequent vesting date, Executive will vest in 50% of the number of shares that would have vested on that date absent the accelerated vesting which occurred due to a Change in Control). At least once during each fiscal year, the Board will consider granting Executive an option or options to purchase shares of Company Common Stock subject to such Options less (ii) the aggregate Company's common stock at a per share exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to no more than the closing price fair market value of a share the common stock of the Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (agrant date(s) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13option(s). The surrender number, terms and conditions of any Options options granted to Executive will be determined at the discretion of the Board, but the Board generally will seek to grant options to Executive in an amount and on the receipt of consideration therefor in accordance with Section 2.6.1 shall be terms and conditions that are performance based and deemed a release of any and competitive, all rights as determined by the holder of such Options had, or may have had, in respect of such OptionsBoard.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as As soon as reasonably practicable after the Effective Timedate first written above, Holdings shall grant to Officer a stock option in respect of 200,000 shares of the Holdings' common stock, such option to become exercisable as to 66,667 shares, 66,666 shares and 66,667 shares on each holder of the first three (3) anniversaries of the date of grant. Beginning with the 1997 Fiscal Year and in respect of each of the following Fiscal Years during the term of this Agreement, Holdings may also grant to Officer stock options for such Options shall receive number of shares of Holdings' common stock as the Compensation Committee in lieu its sole discretion determines, taking into account Officer's and Holdings' performance and the competitive practices then prevailing regarding the granting of such Options an amount in cash, without interest, equal stock options. Subject to the Options Spread Value. For any holder of Optionsforegoing, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by it is anticipated that the number of shares in respect of Company Common Stock subject to such Options less (ii) each annual stock option grant shall be between 100,000 and 150,000, with the aggregate exercise price with respect to such Optionsannual grant normally targeted at 125,000 shares for "good performance," as determined by the Compensation Committee. The "Xxxxxx'x Stock Value" stock options described in this Section 4(c) in respect of a Fiscal Year shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain granted at the earliest practicable date all written consents (if necessary) from holders of Options same time as Holdings grants stock options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights its other senior executives in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13)Fiscal Year. The surrender of any Options and the receipt of consideration therefor All stock options granted in accordance with this Section 2.6.1 4(c): (i) shall be deemed a release of any and all rights the holder of such Options hadgranted pursuant to Holdings' current stock option plan, or such other stock option plan or plans as may be or come into effect during the term of this Agreement, (ii) shall have hada per share exercise price equal to the fair market value (as defined in the current Plan or such other plan or plans) of the common stock at the time of grant, (iii) shall become exercisable in respect three equal installments on each of the first three anniversaries of the date of grant, (iv) shall become immediately and fully exercisable in the event of a Change in Control (as defined in Appendix B) or in the event that Officer's employment is terminated due to death or Disability or by Employer other than for Cause (as defined in Section 5(c)), and (v) shall be subject to such Optionsother reasonable and consistent terms and conditions as may be determined by the Compensation Committee and set forth in the agreement evidencing the award.

Stock Options. 2.6.1. At As of the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than close of business on the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between date hereof: (i) 6,158,804 shares of Company Common Stock are subject to issuance pursuant to outstanding options to purchase Company Common Stock under the product Company Stock Option Plans (as defined in Section 2.12) (the "COMPANY OPTIONS") (less any such shares issued since December 31, 2002 upon the exercise of Company Options); (ii) 1,986,066 shares of Company Common Stock are available for future issuance under the Company Stock Option Plans, (iii) 825,000 shares of Company Common Stock are reserved for future issuance under the 2002 Company Employee Stock Purchase Plan and no further shares of Company Common Stock will be issued under the 1997 Company Employee Stock Purchase Plan, and (iv) no shares of Company Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase Company Common Stock issued pursuant to the Contracts (as defined in Section 2.14) or instruments listed on Section 2.2(b) of the Xxxxxx'x Stock Value multiplied by -8- Company Disclosure Letter (the number of "OTHER OPTIONS"). The Company has provided Parent information describing option activity through December 31, 2002. All shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, issuance under the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Company Purchase Plans and the Other Options, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and non-assessable and not subject to any preemptive rights. There are no commitments or agreements of any character to which the Company is bound obligating the Company to accelerate the vesting of any Company Option agreements as a result of the Merger (whether alone or upon the Options that occurrence of any additional or subsequent events). There are necessary to give effect no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1Company. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1Subject to the approval of the Board of Directors or the Marchex 2003 Stock Incentive Plan Administrator, Executive will be granted an option to purchase three hundred fifty thousand (350,000) shares of the common stock of Marchex, subject to the terms and conditions of the Marchex 2003 Stock Incentive Plan, (“Option 1”). At Options granted pursuant to Option 1 shall be designated as indicated on Exhibit A-1 as either incentive stock options (“ISO”) meeting the Effective Timerequirements of Section 422 of the Internal Revenue Code of 1986, each Optionas amended (the “Code”), whether or non-qualified options (“NQ”) which are not vested, that has an intended to meet the requirements of such Section 422 of the Code. Options granted pursuant to Option 1 shall vest according to the schedule indicated on Exhibit A-1. The exercise price that is equal to or greater than the Xxxxxx'x Stock Value of Option 1 shall be cancelled, without any payment or other consideration thereforthree dollars ($3.00) per share. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal Subject to the Options Spread Value. For any holder approval of Optionsthe Board of Directors or the Marchex 2003 Stock Incentive Plan Administrator, Executive will also be granted an option to purchase one hundred thousand (100,000) shares of Marchex’s common stock, subject to the "Options Spread Value" shall be equal to, with respect to such Options, terms and conditions of the difference, if positive, between Marchex 2003 Stock Incentive Plan (“Option 2”) and effective upon the earliest of (i) the product first anniversary of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less Effective Date and (ii) the aggregate closing of Marchex’s initial public offering. Options granted pursuant to Option 2 shall be designated as NQ and shall vest according to the schedule attached as Exhibit A-2. The exercise price of Option 2 shall be the fair market value of such common stock at the time the option is granted or the price per share equal to the price per share offered and sold to the public pursuant to an effective registration statement prepared in accordance with the Securities Act of 1933, as amended, as determined by the Board. In the event that either (i) Xxxxxxx X. Xxxxxxxx ceases to be a Marchex employee for any reason or (ii) a Change in Control (as defined below) occurs while Executive is employed by Marchex, all options or other equity awards held by Executive with respect to such OptionsMarchex common stock shall become fully vested. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions For purposes of this Section 2.6 and Section 7.13. From and after the Effective Timesubsection, no holder of Options shall have any rights a “Change in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 Control” shall be deemed to have occurred upon the acquisition of beneficial ownership of greater than fifty percent (50%) of the combined voting power of the then-outstanding shares of Marchex common stock entitled to vote generally in the election of directors by any individual, entity or group, but excluding for this purpose any such acquisition by Marchex or any corporation controlled by Marchex. With respect to any grants of capital stock, which shall include grants of options to purchase shares of capital stock of Marchex, received by Executive from Marchex, Executive agrees that the investigation of the tax consequences of such a release grant of capital stock or options and the implementation of a plan to provide for such consequences are solely the responsibility of Executive. Marchex shall have no responsibility, legal, financial or otherwise, with regards to any tax consequences of any and all rights the holder of such Options had, stock or may have had, in respect of such Optionsoptions granted by Marchex to Executive.

Stock Options. 2.6.1. At (a) As an incentive for the Effective TimeExecutive’s future performance in improving shareholder value, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value Company shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal grant to the Options Spread Value. For any holder Executive options to purchase one hundred fifty thousand (150,000) shares of Optionsthe Company’s common stock, $0.01 par value per share (the "Options Spread Value" shall be equal to“Stock”), with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to options being valued at the closing price of a share of Company Common the Stock as reported on the American effective date of the Original Agreement. The Company shall also grant to the Executive options to purchase a minimum of forty-six thousand six hundred sixty-seven (46,667) shares of Stock Exchange on each of the first, second, and third anniversaries of the Original Agreement. The Executive may participate in future awards of options to purchase Stock or restricted shares in a manner consistent with any stock option plan or restricted share plan adopted by the Company for its senior corporate officers. Option or restricted share grants subsequent to the foregoing initial three-year period shall be based upon targets adopted annually by the Board of Directors, which targets may be derived from budgets generated by the Company’s management, and the determination as to the amount of such options or restricted shares, if any, shall be at the sole discretion of the Board of Directors. (b) The options or restricted shares provided in subparagraph (a) of this Section 3.3 shall be evidenced by a stock option agreement or restricted share agreement (“Stock Agreement”) between the Executive and the Company, which Stock Agreement shall provide for a vesting schedule of four (4) years, in equal parts, of the options or restricted shares granted thereunder. Notwithstanding any provisions now or hereafter existing under any stock incentive plan of the Company, all options or restricted shares granted to the Executive shall vest in full immediately upon the Termination Date except for termination of employment pursuant to Section 6.3 or Section 6.5 hereof, and the Executive (or his estate or legal representative, if applicable) shall thereafter have twelve (12) months from the Termination Date to exercise such options, if applicable. (c) Notwithstanding any provisions now or hereafter existing under any stock option plan or restricted share plan of the Company, in the event of a Change in Control (as hereinafter defined), all options or restricted shares provided to the Executive pursuant to Section 3.3(a) of the Original Agreement or any Stock Agreement shall be granted and shall immediately fully vest as of the date of such Change in Control with such options or restricted shares being valued at the closing price of the Company’s common stock on the Business Day immediately day prior to the Effective Timeday of the Change in Control. 2.6.2. Prior to the Effective Time, the Company (ad) shall take all reasonable steps necessary to make any amendments to the terms For purposes of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time a “Change in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 Control” shall be deemed to exist if: (i) a release person, as defined in Sections 13(d) and 14(d) of any the Securities Exchange Act of 1934 (other than the Executive or a group including the Executive), either (A) acquires twenty percent (20%) or more of the combined voting power of the outstanding securities of the Company having the right to vote in elections of directors and all rights such acquisition shall not have been approved within sixty (60) days following such acquisition by a majority of the holder of such Options hadContinuing Directors (as hereinafter defined) then in office, or may have had(B) acquires fifty percent (50%) or more of the combined voting power of the outstanding securities of the Company having a right to vote in elections of directors; or (ii) Continuing Directors shall for any reason cease to constitute a majority of the Board of Directors of the Company; or (iii) the Company disposes of all or substantially all of the business of the Company to a party or parties other than a subsidiary or other affiliate of the Company pursuant to a partial or complete liquidation of the Company, sale of assets (including stock of a subsidiary of the Company) or otherwise; or (iv) the Board of Directors approves the Company’s consolidation or merger with or into any other person (other than a wholly-owned subsidiary of the Company), or any other person’s consolidation or merger with or into the Company, which results in respect all or part of such Optionsthe outstanding shares of Stock being changed in any way or converted into or exchanged for stock or other securities or cash or any other property. (e) For purposes of this Agreement, the term “Continuing Director” shall mean a member of the Board of Directors who either was a member of the Board of Directors on the date hereof or who subsequently became a Director of the Company and whose election, or nomination for election, was approved by a vote of at least two-thirds (2/3) of the Continuing Directors then in office.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) In addition to the product foregoing compensation, Employee is hereby granted non-qualified options under the Company's Amended 1994 Stock Option Plan (the "Plan") to purchase up to 150,000 shares of the Xxxxxx'x common stock of the Company upon the following terms and conditions (such options are referred to herein as the "Stock Value multiplied by Options"). Subject to the number vesting requirements set forth herein, the Stock Options shall be exercisable as to each tranche of shares through the day immediately preceding the fifth (5th) anniversary of Company Common Stock subject to the vesting date for such Options less (ii) the aggregate tranche. The exercise price with respect to such Options. The "Xxxxxx'x of the Stock Value" shall Options will be equal to 85% of the closing last reported sale price of a share of Company Common Stock as reported the common stock on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective TimeJanuary 2, 1998, the Company (a) shall take all reasonable steps necessary to make any amendments date of grant as determined pursuant to the terms of the Plan. The Stock Option PlansOptions will vest on an "earn out" basis, that is 37,500 Stock Options will vest after completion of Employee's first year of employment with the individual Option agreements or Company (December __, 1998), 37,500 Stock Options will vest after completion of Employee's second year of employment with the Company (December ___, 1999), 37,500 Stock Options that are necessary to give effect to will vest after completion of Employee's third year of employment with the transactions contemplated by this AgreementCompany (December __, 2000), and 37,500 Stock Options will vest after completion of Employee's fourth year of employment with the Company (b) December __, 2001). The Stock Options shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or not vest if, prior to the relevant vesting date, Employee voluntarily leaves the Company's employ or if Employee is terminated, except as set forth in paragraph 12. (ii) In addition to the issuance of the Initial Stock Options as provided above, Employee is hereby granted additional non-qualified options under the Plan to purchase an aggregate of 50,000 shares of common stock (the "Performance Stock Options"), at 85% of the last reported sale price of the common stock on January 2, 1998. The Performance Stock Options immediately shall vest and become exercisable, at such time as Employee has met the management business objectives (which are to be reasonably determined by the designated Officer within sixty (60) days of the Effective TimeDate), provided that Employee is then employed by the Company. Once vested, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Performance Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect be exercisable for a term of such Optionsfive years from the date of vesting. The Stock Options shall not vest if, other than prior to receive consideration in the manner described in Section 2.6.1 (relevant vesting date, Employee voluntarily leaves the Company's employ or if Employee is terminated, except as otherwise contemplated set forth in paragraph 12. (iii) With respect to amendments to the Plan, and with respect to future stock option plans or programs to be participated in by Section 7.13). The surrender senior officers or key employees of any Options the Company or its successor companies, Employee shall participate in an equitable manner, consistent with the participation of other senior managers and key employees of the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsCompany.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product The Company has granted to you non-qualified stock options to purchase an aggregate of 84,000 shares of the Xxxxxx'x Company's common stock, par value $.001 per share (the "Common Stock") pursuant to a Stock Value Option Agreement (the "Existing Stock Option"). The shares subject to the Existing Stock Option shall vest on the one year anniversary of your date of employment with the Company; provided, however, that if your employment is terminated prior to the one year anniversary of your date of employment with the Company by the Company without Cause, then there nonetheless shall be vested a number of options representing 7,000 shares multiplied by the number of shares full months of service by you (defined as each 30-day anniversary of the commencement of your employment); provided, further, that (i) if your employment is terminated prior to the one year anniversary of your date of employment with the Company Common Stock subject to such Options less by the Company without Cause but after January 31, 2002, and (ii) you have provided reasonable cooperation in transition matters with the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal new Vice President, Marketing, any remaining unvested shares subject to the closing price Existing Stock Option as of the date of the termination of your employment shall continue to vest at a share rate of 7,000 shares per month on each monthly anniversary of your date of employment with the Company until all of the shares subject to the Existing Stock Option are vested. (ii) The Company will grant to you additional non-qualified stock options to purchase an aggregate of 21,000 shares of the Company's Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, Company's 2000 Equity Participation Plan (the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13"New Option"). The surrender exercise price of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 New Option shall be deemed a release $1.38 (representing the actual closing price on October 11, 2001, the date approved by the Board of any Directors), and all rights 100% of the holder of such Options hadshares subject to the New Option shall vest completely on July 31, 2002 if (A) you are still employed as the Vice President, Marketing on July 31, 2002, or may if (B) your employment with the Company is terminated by the Company without Cause prior to such date, or if (C) the Company has hired a permanent Vice President, Marketing prior to such date and you have hadprovided reasonable cooperation in transition matters with the new Vice President, in respect Marketing. Notwithstanding the foregoing, 100% of the shares subject to the New Stock Option will vest on January 1, 2004, if you are still serving as Vice President, Marketing on such Optionsdate. (iii) Once vested, these options shall be exercisable for a period of five years from the date of grant, regardless of whether your employment with the Company is earlier terminated. In the event that your employment with the Company is terminated for any Cause, all unvested options shall be cancelled.

Stock Options. 2.6.1Subject to the adoption by the Board of Directors of a stock option plan (the "Plan") for the Company and the approval of such Plan by the Company's shareholders, the Company shall grant to Executive an option (the "Option") to purchase 250,000 shares of the Company's Class A common stock, par value $.01 per share. At The Company agrees to use reasonable efforts to have the Effective Time, each Option, whether or not vested, that has an Plan adopted and approved within six (6) months following the date of this Agreement. The exercise price that is shall, at the election of the Company, be an amount equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between either (i) the product closing market price of the Xxxxxx'x Stock Value multiplied by Company's Class A common stock on the number date of shares of Company Common Stock subject to such Options less the grant, or (ii) such other price which is no less favorable than that granted to similarly situated executives of the aggregate exercise price with respect to such OptionsCompany, but in no event less than Seven Dollars ($7.00) per share. The "Xxxxxx'x Stock Value" Option shall vest in accordance with the terms of the Plan. The other terms and conditions of the Option shall be equal set forth in a stock option agreement (the "Stock Option Agreement") in the form customarily utilized by the Company for the grant of options to similarly situated executives. Notwithstanding the closing price foregoing, the following shall apply: (a) All shares covered by the Option shall immediately vest and become exercisable upon the occurrence of a share Change in Control (as defined in Section 4.4 below) of Company Common Stock the Company. (b) Upon the occurrence of a Termination Without Cause (as reported on defined in Section 4.2 below) or a Termination With Good Reason (as defined in Section 4.3 below), the American Stock Exchange on shares covered by the Business Day immediately Option shall vest and become exercisable in accordance with the following schedule: (i) If the termination takes place during the initial twelve (12) months of the Term, then twenty-five percent (25%) of the shares covered by the Option shall be deemed vested. All unvested shares shall terminate. (ii) If the termination takes place after the expiration of the initial twelve (12) months of the Term, but prior to the Effective Timeexpiration of the thirty-sixth (36th) month of the Term, then fifty percent (50%) of the shares covered by the Option shall be deemed vested. All unvested shares shall terminate. 2.6.2. Prior to (iii) If the Effective Timetermination takes place at any point thereafter (i.e., after the Company expiration of the initial thirty-six (a36) shall take all reasonable steps necessary to make any amendments months of the Term), then the greater of (A) seventy-five percent (75%) of the shares covered by the Option or (B) such amount as otherwise would be deemed vested pursuant to the terms of the Stock Plan, shall be deemed vested. All unvested shares shall terminate. (c) In the event that Executive incurs a termination of employment pursuant to (i) a Termination Without Cause, (ii) a Termination With Good Reason, (iii) a Termination Upon Change in Control (as defined in Section 4.4 below), or (iv) the termination by the Company of Executive's employment for any reason during the At-Will Period, then any portion of the Option Plans, that has become vested on or before the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement termination (including, without limitation, any portion that becomes exercisable due to such termination) shall remain exercisable for twenty-four (24) months following the date of such termination. (d) In the event that (i) Executive incurs a Termination With Cause (as contemplated by defined in Section 7.134.1 below), (ii) Executive incurs a termination for death or Disability (as defined in Section 4.5 below), (iii) Executive resigns without "Good Reason" prior to the Optionsexpiration of the Term, or (iv) Executive resigns for any reason during the respective At-Will Period, then any portion of the Option agreements and that has become vested on or before the respective Stock Option Plans, to facilitate the timely exercise date of such rights and obligations termination (including, without limitation, any portion that becomes exercisable due to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options such termination) shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor be exercisable in accordance with Section 2.6.1 the terms of the Plan. (e) Notwithstanding anything else to the contrary provided herein, the Option shall be deemed a release of any and all rights terminate on the holder of such Options hadexpiration date provided in the Stock Option Agreement, or may have had, in respect of such Optionsif not already expired.

Stock Options. 2.6.1Effective as of the date of this Agreement, the Employee will be granted a stock option (the “Option”) to purchase 2,063,000shares of the Company’s common stock. At The per-share exercise priceof 1,031,500 shares will be equal to 110% of the Effective Time, each Option, whether or not vested, that has an Fair Market Value of one share of the Company’s common stock as of the date of this Agreement. The per-share exercise price that is of the remaining 1,031,500 shares will be equalto 120% of the Fair Market Valueof one shareof the Company’s common stock as of the date of this Agreement. TheOption will vest in equal quarterly installments over a four-year period commencing on the Commencement Date, subject to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except acceleration as otherwise provided set forth in Section 7.13, all other Options, whether or not vested, shall 5. The Option will be cancelled and, as soon as reasonably practicable after an incentive stock option under the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal Code to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied extent permitted by the Code. The number of shares of Company Common Stock common stock subject to the Option shall be adjusted as follows: (i) In the event that, on or before August 31, 2004, the Company sells additional shares of common stock or preferred stock convertible into common stock, in a private placement transaction arranged by Xxxx Xxxxx Xxxx Xxxxxx (the total number of shares of common stock issued or issuable in connection with such Options less transaction to be known as the "Additional Shares"), the number of Option Shares shall be increased in an amount equal to 1.25% of the Additional Shares. The per-share exercise price of one-half of the additional Option Shares will be equal to 110% of the Fair Market Value of one share of the Company's common stock as of the date of the closing of the sale of the Additional Shares. The per-share exercise price of the remaining one-half of the additional Option Shares will be equal to 120% of the Fair Market Value of one share of the Company's common stock as of the date of the closing of the sale of the Additional Shares. (ii) In the aggregate exercise price with respect event that, on or before December 31, 2004, the Company repurchases any of its outstanding shares of common stock (the "Repurchased Shares"), the number of Option Shares, as adjusted pursuant to such Options. The "Xxxxxx'x Stock Value" Section 2(c)(i) hereof, shall be reduced in an amount equal to the closing price sum of a share 1.25% of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior Repurchased Shares. Such reduction shall be applied first to the Effective Time. 2.6.2. Prior additional Options Shares issuable pursuant to Section 2(c)(i) hereof and second to the Effective Time, the Company (aoriginal Option Shares issuable pursuant to Section 2(c) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, hereof and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have hadshall, in respect each case, reduce the number of such OptionsOption Shares exercisable at 110% of Fair Market Value and 120% of Fair Market Value in equal amounts.

Stock Options. 2.6.1(i) Thirty (30) trading days following the Commencement Date, the Board or the compensation committee of the Board shall cause the Company to grant Executive a stock option to acquire 21,250 shares of the Company's common stock which is intended to represent 1.0% of the issued and outstanding shares of the Company's common stock on a fully diluted basis (calculated without giving effect to the grant contemplated hereunder) as of the date of grant (the "Option"). At To the Effective Timeextent necessary to carry out the intended terms of this paragraph (c)(i), each the Option shall be adjusted as is necessary to take into account any change in the common stock of the Company in a manner consistent with adjustments made to other option holders and/or shareholders of the Company generally. In addition, in the event that a rights offering of the Company's common stock is made by the Company to its shareholders, Executive shall be entitled to an additional option grant to acquire 1.0% of the shares of common stock issued pursuant to such offering on the first $30,000,000 raised (the "Additional Option, whether or not vested, that has "). The Additional Option shall be granted under substantial similar terms as those set forth herein and with an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, per share equal to the Options Spread Valuefair market value per share of the common stock upon the date of grant. For any holder of Options, The Additional Option shall vest (or be vested) at the "Options Spread Value" same time (and in the same proportion) as the Option (if partially unvested) or shall be equal to, with respect to such Options, fully vested if the difference, if positive, between Option is fully vested. (ii) The Option described in paragraph (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock above shall be granted subject to such Options less the following terms and conditions: (iiA) except as provided below, the Option shall be granted under and subject to the Company's stock option plan; (B) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" per share of each Option shall be equal to the greater of the (1) the last reported sales price of a share of the common stock on the day which is the thirtieth (30th) trading date following the Commencement Date or (2) the average closing price of a share of Company Common Stock common stock for the ten (10) day trading period ending on the date which is the thirtieth (30th) trading date following the Commencement Date, in either case, as reported on such principal trading market for the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective TimeCompany's common stock where quotes are readily available; provided, that, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms exercise price of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed adjusted at least monthly, but not below zero, by an increase of 0.8333% per month (less all dividends and distributions (including non-cash distributions) made to common shareholders on a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.per share basis)

Stock Options. 2.6.1. At As of the Effective TimeTermination Date, each Option, whether or not vested, that has an exercise price that is equal Executive’s options to or greater than purchase shares of the Xxxxxx'x Stock Value Company’s common stock shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, have vested with respect to such Options441,527 shares, as set forth on Exhibit A (collectively, the difference, if positive, between (i“Vested Stock Options”) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments pursuant to the terms of the Company’s 2002 Equity Incentive Plan, as amended (the “Plan”), and the option agreements entered into to evidence such stock options (each such agreement an “Original Option Agreement”). Each Original Option Agreement evidencing Executive’s Vested Stock Option PlansOptions shall be hereby amended collectively as follows: (i) The Vested Stock Options shall remain exercisable until the earliest of (a) the third anniversary of the Termination Date, (b) the individual Option agreements closing of a Change in Control (as defined in the Plan) of the Company or (c) the later of (A) the six month anniversary of expiration of any “lock-up” or similar transfer restriction imposed on the shares of any common stock underlying the Vested Stock Options that are necessary to give effect in connection with the initial public offering (the “IPO”) of any class of equity securities of the Company and (B) the twelve month anniversary of the IPO. This extended exercisability shall not result in the imposition of any taxes on Executive under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). (ii) In the event of a Change in Control (as defined in the Plan) Executive shall be given notice by the Company of such Change in Control not later than the earlier of (i) three days following the execution of a definitive agreement which if consummated would constitute such Change in Control or (ii) thirty days prior to the transactions contemplated by consummation of such Change in Control; provided that Executive agrees to sign an agreement with the Company to keep such Change in Control transaction confidential prior to the consummation of such Change in Control. (iii) Executive acknowledges that upon the execution of this Agreement, each unexercised “incentive stock option” within the meaning of Section 422 of the Code shall be deemed modified for the purposes of Section 424 of the Code and, to the extent the exercise price thereof is lower than the fair market value of the Company’s common stock as of the date this Agreement is executed, such option shall no longer qualify as an incentive stock option and Executive will lose the potentially favorable tax treatment associated with such option. (biv) shall take reasonable steps necessary If Executive desires to obtain at exercise any Vested Stock Options, Executive must follow the procedures set forth in Executive’s Original Option Agreements, including payment of the exercise price and any withholding obligations. If by the earliest practicable date all written consents (if necessaryspecified above in this Section 3(c)(i) from holders the Company has not received a duly executed notice of Options to effect the cancellation of such holders' Options at the Effective Time exercise and remuneration in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective TimeExecutive’s Original Option Agreements, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Executive’s Vested Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect automatically terminate and be of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsno further effect.

Stock Options. 2.6.1. At As performance-based incentive compensation to the Effective TimeExecutive in connection with his services to be rendered hereunder, each Optionthe Company agrees as follows: (a) Subject to the approval by the stockholders of the Company of the Company's 1995 Stock Option Plan (the "1995 Stock Option Plan"), whether or not vested, that the Company has granted to the Executive: (i) Options (the "350 Options") to acquire Three Hundred Fifty Thousand (350,000) shares of the Common Stock of the Company at an exercise price that is equal of $5.00 per share, which are fully vested as of the date of grant and exercisable at any time prior to or greater than July 1, 2005. The 350 Options have been granted pursuant to the Xxxxxx'x Company's 1995 Stock Value shall be cancelled, without any payment or other consideration therefor. At Option Plan and pursuant to an agreement substantially in the Effective Time, except form attached hereto as otherwise provided in Section 7.13, all other Exhibit A. (ii) Options (the "150 Options, whether or not vested, shall be cancelled " and, as soon as reasonably practicable after together with the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of 350 Options, the "Options") to acquire One Hundred Fifty Thousand (150,000) shares of the Common Stock of the Company at an exercise price of $5.00 per share, with such options to vest on the first date occurring on or after July 1, 1996 but prior to July 1, 1999 on which the fair market value (as defined in the form of agreement attached hereto as Exhibit B) of the Common Stock of the Company shall equal at least $9.50. The 150 Options Spread Value" shall be equal togranted pursuant to the Company's 1995 Stock Option Plan and pursuant to an agreement substantially in the form attached hereto as Exhibit B. The 150 Options shall also vest as set forth in Section 5(e) upon the occurrence of certain events and will be subject to the other terms set forth in Section 5(e). The Executive understands that the Company has terminated the Stock Grant Plan adopted by the Board on September 27, 1993 (the "1993 Stock Grant Plan"), and the Executive consents to the termination of the 1993 Stock Grant Plan and waives, releases and relinquishes any right he may have to receive any Common Stock of the Company pursuant to such Plan. (b) For each annual period commencing July 1, 1995, the Executive shall be eligible to participate in a stock option plan for the Company's executives providing for the granting of stock options under the 1995 Stock Option Plan. The performance goals for the grant of such options will be based on objective criteria mutually negotiated and agreed upon in good faith in advance by the Executive and the Board. The Executive's aggregate annual bonus determined in accordance with this Section 3(b) is referred to herein as the "Annual Stock Option Grant." (c) The Company agrees that it will use its best efforts to comply with the requirements of Rule 16b-3 promulgated pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), as such rule shall be in effect from time to time, or with any successor provision to said rule("Rule 16b-3") such that in the event the Executive shall become subject to Section 16 (or a successor provision) of the 1934 Act with respect to shares of the Company's capital stock, the Executive shall be afforded the benefits of Rule 16b-3 with respect to such Optionsrestricted stock or options, including without limitation providing for the difference, if positive, between (i) the product grant of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject restricted stock or options pursuant to such Options less (ii) the aggregate exercise price stock plans which comply with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to Rule 16b-3 and permit the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions options contemplated by this Agreement. (d) The Company agrees, so long as the Company shall be subject to the reporting requirements of Section 13 or 15(d) (or any successor provision) of the 1934 Act (referred to herein as "1934 Act Registration"), it shall use its best efforts to cause to remain effective a registration statement on Form S-8 (or a successor form) within ninety (90) days of the date such 1934 Act Registration-becomes effective, and (b) shall take reasonable steps necessary to obtain at maintain the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation effectiveness of such holders' Options at registration statement, such that any restricted stock or options (including but not limited to the Effective Time Options) granted to the Executive and the purchase of shares by the Executive upon the exercise of any such options shall be registered under the Securities Act of 1933, as amended or any successor provision, and so long as he is an affiliate of the Company or if he shall have exercised any of such options in accordance with Section 2.6.1. 2.6.3. At whole or in part prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders effectiveness of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Planssuch registration statement, to facilitate provide for and maintain the timely exercise effectiveness of such rights and obligations to effectuate a corresponding resale prospectus on Form S-3 providing for the provisions resale by the Executive of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, shares so granted or may have had, in respect of such Optionspurchased.

Stock Options. 2.6.1PGIC has anticipated that the hiring of a President and CEO would likely result in the granting of stock options equal to 4% of the Company’s issued and outstanding shares of PGIC’s common stock. At Due to the Effective Timeanticipated end date of employees employment with PGIC by April 30, each Option2009 (a seven month period), whether or not vested, that has PGIC hereby grants to Employee options to purchase 58,333 shares of PGIC Common Stock (the “Options”) with an exercise price that as of the Board of Director’s meeting held October 9, 2008, which grant is equal to or greater than 4% of the Xxxxxx'x Stock Value issued and outstanding common shares of PGIC at a ratio of 7/48. The options shall be cancelled, without any payment or other consideration thereforissued under PGIC’s Stock Equity Incentive Plan (“Plan”). At The Options are subject to the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, terms and conditions of the Plan. The stock option agreement (“Stock Option Agreement”) memorializing this grant shall contain the following: (1) The Options shall be cancelled anddesignated as Incentive Options. (2) Monthly, as soon as reasonably practicable after 1/7th of the Effective Time, each holder of such Option Shares shall become eligible for purchase by Employee. (3) The Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between terminate on (i) the product of expiration date specified in the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less Option Agreements or (ii) such earlier date as termination may occur according to the aggregate exercise price terms and conditions of the Plan and/or the Stock Option Agreements. Upon termination of this Agreement for any reason, Employee and/or his successors and assigns shall have only such rights with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock Option as reported on are specified in the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective TimePlan, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option PlansAgreements, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and shall not be entitled to any compensation in any form for the loss of any other right with respect thereto. (b4) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of All Options to effect acquire common stock of PGIC granted to Employee during the cancellation Term of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement shall become 100% vested (including, without limitation, i) upon any “Change in Control” as contemplated by defined in Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise 19 below; (ii) if PGIC or any successor or assignee of such rights and obligations to effectuate the provisions of PGIC should terminate this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, Agreement other than for Cause or deliver a Non-renewal Notice to receive consideration Employee pursuant to Section 1 above; (iii) if Employee should terminate this Agreement for Good Reason as permitted in the manner Section 6(c) below; or (iv) upon Employee’s death or permanent disability as described in Section 2.6.1 6(e) below; provided, however, that in the case of (except as otherwise contemplated by Section 7.13ii). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 , (iii) or (iv) above, such vesting shall be deemed a conditioned on Employee (or Employee’s estate) furnishing to PGIC an effective waiver and release of claims (a form of which is attached hereto as Exhibit A). (5) Employee shall have not less than 90 days to exercise any and all rights options which are vested as of the holder effective date of such Options hadtermination of his employment with PGIC, or may have had, in respect regardless of such Optionsthe reason therefor.

Stock Options. 2.6.1In addition to and not in lieu of any compensation set forth elsewhere in this Agreement, Executive shall be granted options (the "Options") to purchase PHC Stock (the "Option Securities") under the terms and conditions of the PHC stock incentive plan in effect from time to time (the "Option Plan"), and according to a Stock Option Agreement authorized under the Option Plan. At Upon the Effective Timeeffective date of this Agreement, each OptionExecutive shall receive options to purchase 20,000 shares of Option Securities. During the term hereof, whether or Executive shall be granted options to purchase additional shares of Option Securities based on annual profits of the named operations as follows: (a) Adjusted EBITDA of PHC awards to Executive an Pivotal Business: option to purchase: in excess of $800,000 10,000 additional shares of PHC Stock (b) Adjusted EBITDA of all PHC awards to Executive an PHC PHC divisions, option to purchase: subsidiaries and affiliates engaged in the Business (including but not vestedlimited to the Company, that has an exercise Pivotal and PPR) In excess of $800,000 20,000 additional shares of PHC but less than $1,200,000 Stock In excess of $1,200,000 50,000 additional shares of PHC Stock (c) The number of shares of the Option Securities into which the Options are exercisable shall be adjusted based on stock splits, dividends, recapitalizations and other events as set forth in the Option Agreement and the Option Plan. All Options issued to Executive shall be exercisable at a price that is equal to or greater than the Xxxxxx'x Closing Stock Value shall be cancelledPrice (as defined in the Purchase Agreement), without any payment or subject to adjustment based on stock splits, dividends, recapitalizations and other consideration thereforsimilar events all in accordance with normal business practices. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder All of such Options shall receive in lieu be for a term of at least five (5) years from the date of issuance, and all of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day vest immediately prior to the Effective Timeupon issuance. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1Executive shall be entitled to a grant of 125,000 options to purchase the common stock of Group, at the fair market value of said stock on the date of grant, vesting over a four year period, subject to the terms and conditions set forth in Group's stock option plan and the accompanying stock option agreement. At Notwithstanding anything to the Effective Timecontrary in the Group stock option plan or the accompanying stock option agreement, each Optionthe options will fully vest immediately and become immediately exercisable upon a Change of Control, whether or not vestedwhich means: (I) individuals who, on the date hereof, are members of the Board of Directors of Group (the "Incumbent Directors") cease for any reason to constitute at least a majority of the Board; provided, that has an exercise price that any new director who is equal to or greater than approved by a vote of at least a majority of the Xxxxxx'x Stock Value Incumbent Directors shall be cancelledtreated as an Incumbent Director; (II) the stockholders of Group approve a merger, without consolidation, statutory share exchange or any payment manner of corporate transaction in which Employer is not the surviving corporation or other consideration thereforentity or more than 50% of the value of Group is affected by a merger or acquisition; provided, however, that such approval shall not be a Change in Control if immediately following such transaction, Fredric D. Rosen is the highest ranking officer of xxx xxxxxxxxx xxxxxx; or (III) the stockholders of Group approve a plan of complete liquidation or dissolution or a sale of all or substantially all of the assets. At In the Effective Timeevent of a Change of Control, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall Executive may elect to receive in lieu cancellation of such Options his outstanding and unexercised stock options, a cash payment in an amount in cash, without interest, equal to the Options Spread Value. For any holder difference between the exercise price of Optionssuch stock options and (A) in the event the Change of Control is the result of a tender offer or exchange offer for the common stock, the "Options Spread Value" shall be equal to, with respect to such Options, final offer price per share paid for the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value common stock multiplied by the number of shares of Company common stock covered by such stock options, or (B) in the event the Change of Control is the result of any other occurrence, the aggregate value of the Common Stock subject to covered by such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitationstock options, as contemplated reasonably determined by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of Compensation Committee at such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionstime.

Stock Options. 2.6.1(a) Upon the execution of this Agreement, the Company shall grant to the Executive options (the "Initial Options") to purchase up to 55,000 shares of common stock (the "Common Stock") of the Company under (and therefore subject to all terms and conditions of) the World Fuel Services Corporation 1996 Employee Stock Option Plan and the 2001 Omnibus Plan, and any successor plan thereto, and all rules of regulation of the Securities and Exchange Commission applicable to stock option plans then in effect. At The option price per share for the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value Initial Options shall be cancelled$11.90. Those Initial Options that are incentive Stock Options (as described below) become exercisable at the rate of one-third per year commencing on the first anniversary of the date of grant, without any payment or other consideration thereforand those Initial Options that are non-qualified stock options become exercisable in full on the second anniversary of the date of grant. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal In addition to the Options Spread Value. For any holder of Initial Options, the "Options Spread Value" Executive shall be equal toeligible to receive additional option grants under the 2001 Omnibus Plan in such number and on such terms and conditions as shall be determined by the Board or the Compensation Committee of the Board. The options granted to the Executive shall be incentive stock options, with respect within the meaning of Section 422(b) of the Internal Revenue Code of 1986 as amended (the "Code"), to the extent that such Optionsoptions do not exceed the limitations imposed by Section 422(d) of the Code, and the difference, if positive, between balance of the options granted to the Executive shall be non-qualified stock options. (b) The Initial Options shall become fully vested immediately in the event that: (i) the product a Change of Control of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less as defined in Section 3.1 hereof occurs, or (ii) the aggregate exercise price Executive terminates his employment with respect to such Optionsthe Company for Good Reason, as defined in Section 3.4 hereof, or (iii) the Company terminates the Executive's employment with the Company, other than for Cause, as defined in Section 3.2 hereof. The "Xxxxxx'x Stock Value" shall be equal to In the closing price event the Executive's employment terminates for any of a share the reasons set forth in subsections (ii) or (iii) of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Timethis Section 2.3, the Company Executive may exercise all vested rights under the Initial Options at any time after vesting and until the earlier of: (a1) shall take all reasonable steps necessary to make any amendments to the terms of date that is two (2) years after the Stock Option Plans, date on which the individual Option agreements or Executive's employment terminates for the Options that are necessary to give effect to the transactions contemplated by this Agreementreasons provided above, and (b2) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect Expiration Date for the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, options as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration defined in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsapplicable option agreement.

Stock Options. 2.6.1Subject to the approval of the Company’s Board of Directors (the “Board”) or the Company’s Compensation Committee, the Company shall grant you a stock option covering 546,000 shares of the Company’s common stock (the “Option”), which represents approximately 4% of the Company’s outstanding shares as of June 14, 2008. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value The Option shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, granted as soon as reasonably practicable reasonable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, date you commence full-time employment. The exercise price per share will be equal to the Options Spread Valuefair market value per share on the date the Option is granted, as determined by the Board in good faith compliance with applicable guidance in order to avoid having the Option be treated as deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended. For any holder There is no guarantee that the Internal Revenue Service will agree with this value. You should consult with your own tax advisor concerning the tax risks associated with accepting an option to purchase the Company’s common stock. The term of Options, the "Options Spread Value" Option shall be 10 years, subject to earlier expiration in the event of the termination of your Continuous Service Status (as defined in the Company’s 2007 Stock Plan (the “Plan”)) to the Company. The shares underlying the Option shall vest and become exercisable at the rate of: (i) 12.5% of the total number of shares underlying the Option after the first 6 months of your Continuous Service Status; (ii) 21.875% of the total number of shares underlying the Option after the first 12 months of your Continuous Service Status and (iii) the remaining shares underlying the Option in equal to, with respect to such Options, monthly installments over the differencefollowing three years of your Continuous Service Status. Notwithstanding the above, if positivethe Company experiences a Corporate Transaction that constitutes a Triggering Event (as those terms are defined in the Plan) during your Continuous Service Status, between and (A) terminates your employment for any reason other than Cause (as defined in the Plan), death or Disability (as defined in the Plan) at any time following the consummation of the Corporate Transaction, you will vest effective as of and contingent upon your termination in the lesser of: (i) the product number of remaining unvested shares subject to the Option as of the Xxxxxx'x Stock Value multiplied by date of your termination; or (ii) 50% of the total number of shares subject to the Option; or (B) the successor corporation does not assume or substitute an equivalent option or right for your Option in connection with the Triggering Event, you will vest, effective as of and contingent upon the Triggering Event, in the lesser of: (i) the number of remaining unvested shares of Company Common Stock subject to such Options less the Option as of the date of the Triggering Event or (ii) 25% of the aggregate exercise price with respect total number of shares subject to such Optionsthe Option. The "Xxxxxx'x Stock Value" Option will be an incentive stock option to the maximum extent allowed by the tax code and shall be equal subject to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the other terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration conditions set forth in the manner described Plan and in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender the Company’s standard form of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsstock option agreement.

Stock Options. 2.6.1The Executive shall be granted two stock options effective December 10, 1997, to purchase shares of common stock of the Company under the Input/Output, Inc. 1990 Stock Option Plan (the "Option Plan"). At Both option grants will be evidenced by standard stock option agreements. The first grant will provide for an option to purchase 500,000 shares of stock under the Effective TimeOption Plan, each Option, whether or not vested, that has having an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Valuefair market value of the stock on the date of grant. For any holder This option will vest in equal annual installments over a four-year period beginning on the date of Optionsgrant. This option will have a term of ten years and will otherwise be subject to the standard terms and conditions of the Option Plan; provided, however, that the "Options Spread Value" option agreement shall be equal to, with respect to such Options, the difference, if positive, between expressly provide that (i) upon the product Company's termination of the Xxxxxx'x Stock Value multiplied by the number Executive's employment for any reason other than for "Cause" (as defined in SECTION 5(c) of this Agreement), (A) all unvested installments of shares under such option shall thereupon automatically accelerate and become fully vested, and (B) the option shall be exercisable from the date of Company Common Stock subject to such Options less termination of employment through that date which is the first anniversary date of such date of termination, and (ii) upon the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price occurrence of a share "change of Company Common Stock control" (as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to defined under the terms of the Stock Option PlansPlan as of the date hereof), all unvested installments of shares under such option shall thereupon automatically accelerate and become fully vested. The second stock option grant will provide for an option to purchase 100,000 shares of common stock under the Option Plan. This grant will be 100% vested on December 10, 1998, but will be exercisable commencing upon that date only if the fair market value per share of the common stock is at least equal to 120% of the exercise price (i.e., the individual Option agreements or New York Stock Exchange closing price of the Options that are necessary to give effect to common stock on December 10, 1997). For the transactions contemplated by this Agreementpurpose of determining whether the option becomes exercisable beginning on December 10, and (b) shall take reasonable steps necessary to obtain at 1998, "fair market value" will be based on the earliest practicable date all written consents (if necessary) from holders average closing price per share of Options to effect the cancellation of such holders' Options at common stock on the Effective Time in accordance with Section 2.6.1. 2.6.3. At or 30 consecutive trading days prior to December 10, 1998. If such "fair market value" of the Effective Timestock on December 10, 1998 is not equal to at least 120% of the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under exercise price, then this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsoption will terminate.

Stock Options. 2.6.1. At (i) The Company has reserved 12,141,357 shares of Company Common Stock for issuance under the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled andCompany Incentive Plans, as soon to which Company Options to purchase an aggregate of 9,492,275 shares of Company Common Stock are outstanding as reasonably practicable after of the Effective Timedate of this Agreement, each holder and Company Options to purchase an aggregate of such Options shall receive in lieu 857,667 shares of such Options an amount in cash, without interest, equal to Company Common Stock remain available for future grants. Part 2.3(b)(i) of the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal toDisclosure Schedule accurately sets forth, with respect to such Options, each Company Option that is outstanding as of the difference, if positive, between date of this Agreement: (iA) the product name of the Xxxxxx'x holder of such Company Option; (B) the total number of shares of Company Common Stock Value multiplied by that are subject to such Company Option and the number of shares of Company Common Stock subject with respect to which such Options less Company Option is immediately exercisable; (C) the date on which such Company Option was granted and the term of such Company Option if other than ten (10) years; (D) the vesting schedule for such Company Option (including the extent to which it will become accelerated as a result of the Merger or any of the other transactions contemplated by this Agreement, whether alone or in connection with any other event) and the status of such Company Option as fully vested, partially vested or unvested; (E) the exercise price per share of Company Common Stock purchasable under such Company Option; and (F) whether such Company Option is intended to be an “incentive stock option” as defined in Section 422 of the Code. Each Company Option is exempt from Section 409A of the Code, and each grant of a Company Option was duly authorized no later than the date on which the grant of such Company Option was by its terms to be effective (the “Option Grant Date”). (ii) Each grant of a Company Option has been authorized by all necessary corporate action, including, as applicable, approval by the aggregate board of directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents. Each award agreement governing the grant of a Company Option was duly executed and delivered by each party thereto and is in full force and effect. Each grant of a Company Option was made under a Company Incentive Plan in accordance with the terms of the Company Incentive Plan under which such Company Option was made and all applicable Legal Requirements. The per-share exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be of each Company Option was equal to or greater than the closing price fair market value of a share of Company Common Stock as reported on the American applicable Option Grant Date, as determined in accordance with Section 409A of the Code. The grant of each such Company Option was properly accounted for in accordance with GAAP in the consolidated financial statements (including the related notes) of the Company. All Company Options with respect to shares of Company Common Stock Exchange that were ever issued by the Company ceased to vest on the Business Day immediately date on which the holder thereof ceased to be an employee of, or a consultant to, any Acquired Company. Each exercise of a Company Option complied with the terms of the Company Incentive Plan pursuant to which such Company Option was granted, all Contracts applicable to such Company Option and all Legal Requirements. The Company has Made Available to Parent accurate and complete copies of all Company Incentive Plans and each form of agreement used thereunder. No Company Options have terms or provisions that differ from or are inconsistent in any material respect with such form agreements. Except as provided in Section 1.6, from and after the Effective Time, no individual who held a Company Option at any time prior to the Effective Time. 2.6.2Time will have any rights with respect to such Company Option. Prior to the Effective Time, The treatment of the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior 1.6 is permitted under the applicable Company Incentive Plan, all Contracts applicable to the Effective Time, the such Company shall take Options and all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13Legal Requirements. From and after the Effective Time, no holder of Options shall a Company Option will have any rights in with respect of such Options, to any Company Option other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise rights contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options1.6.

Stock Options. 2.6.1. At (a) On the Effective Timedate hereof, each Optionthe Company shall issue to Dr. ------------- Went a stock option exercisable for 25,000 shares of common stock of the Company (the "Common Stock"), whether or not vested, that has at an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, per share equal to the Options Spread Valuefair market value of the Common Stock on the date hereof, determined in accordance with the Company's 1997 Employee, Director and Consultant Stock Option Plan. For any holder The option shall become fully vested and immediately exercisable for all of Optionsthe Common Stock thereunder on June 30, 2000 and shall terminate on June 30, 2002. On the date hereof, the "Options Spread Value" Company shall execute and deliver a stock option agreement, in the form of Exhibit B attached hereto, evidencing the issuance of the foregoing --------- option. (b) On January 4, 1999, or as soon thereafter as practicable, but in no event after January 10, 1999, Dr. Went and/or the Trusts shall be equal toallowed to immediately exercise in full the option to purchase 83,000 shares of Common Stock under the Non-Qualified Stock Option Agreement between the Company and Dr. Went, with respect dated December 28, 1993 (the "1993 Stock Option"). In addition, the Company shall pay to such Optionsoptionees $83,000.00 to enable them to exercise such options. Accordingly, at the time of exercise, the difference$83,000.00 payment will be deemed to have been received from the Company and, if positiveimmediately thereafter, between to have been paid to the Company in order to exercise the 1993 Stock Option. Within three days of such exercise, the Company shall issue to Dr. Went and/or the Trusts an aggregate of 83,000 shares of Common Stock. The Company shall make an additional payment (the "Gross-Up Payment") in an amount equal to the sum of (i) the product federal and state income tax liability imposed on receipt of the Xxxxxx'x $83,000.00 payment and the exercise of the 1993 Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less Options, and (ii) the aggregate exercise price with respect to such Optionsfederal and state income tax liability imposed on receipt of the Gross-Up Payment. The "Xxxxxx'x Stock Value" Gross-Up Payment shall be equal calculated assuming that Dr. Went is taxable at the combined federal and state income tax rate of 45.0%. The Company shall pay any withholding taxes imposed on any such payments as required and shall treat such paid withholding taxes as an interest-free advance to Dr. Went, to be recovered from the closing price Gross-Up Payment. The Gross-Up Payment shall be paid not later than December 31, 1999. An example of a share the calculation of Company the Gross-Up Payment is set forth on Exhibit C hereof. --------- (c) Exhibit D attached hereto sets forth certain information regarding --------- all other options to purchase Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2currently held by Dr. Went. Prior to the Effective Time, the Company (a) Such options shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time remain in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.effect

Stock Options. 2.6.1. At No later than February 9, 2001, the Effective Time, each Option, whether or not vested, that has Company will grant ------------- to the Executive an option to purchase 300,000 shares of common stock of the Company with an exercise price that is equal to or greater of $1.375 per share (the "First Option"). No later than March 26, 2001, the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal Company will also grant to the Options Spread Value. For any holder Executive an additional option to purchase 100,000 shares of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product common stock of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate with an exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be per share equal to the closing price per share of the Company's common stock on the day before the grant date (the "Second Option"). The Fist Options shall be an incentive stock option to the maximum extent permitted by law. The First Option will be vested as to 150,000 shares of stock as of the date of grant of the First Option. The Second Option will be vested as to 50,000 shares of stock as of the date of grant of the Second Option. The remaining unvested portion of the First Option and the remaining unvested portion of the Second Option will vest on the earliest of the following dates: (i) December 31, 2001, provided that the Executive continues to provide service to the Company on that date; (ii) the date of a share Change in Control; or (iii) the Executive's Termination Date, if the Executive's employment is terminated due to a termination by the Company without Cause, the Executive quitting for Good Reason, the Executive dying, or the Execution becoming subject to a Disability. All vested options will remain exercisable for a period of at least one year after the Executive's Termination Date; provided, however, that if the Executive's employment is terminated by the Company Common Stock as reported for Cause, all vested options shall terminate and cease to be exercisable on the American Stock Exchange on the Business Day immediately prior Termination Date. All shares to be issued to the Effective Time. 2.6.2Executive will be registered on Form S-8. Prior The Company will arrange to allow the Effective TimeExecutive to exercise all or a portion of the stock option on a cashless basis through a broker. In addition, the Company (a) shall take all reasonable steps necessary will allow the Executive to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely satisfy his minimum tax withholding liability upon exercise of such rights and obligations stock options by electing to effectuate reduce the provisions number of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder shares he receives by a number of Options shall have any rights in respect of such Options, other than shares with an aggregate fair market value equal to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsrequired tax withholding liability.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give Immediately after giving effect to the transactions contemplated by the Merger Agreement, the Executive shall be granted an option to purchase shares of the common stock of IPC (the "Option") pursuant to the IPC Information Systems, Inc. Stock Option Plan. The terms of the Option shall be set forth on the Option Grant Certificate (the "Certificate") attached on Exhibit A hereto, which Certificate is hereby incorporated by reference into this Agreement, and . (b) If, prior to the second anniversary of the Closings, (i) IPC distributes the common stock of the Company that it holds to the stockholders of IPC, or (ii) there is an initial public offering or private offering of the Company's common stock (other than a private sale of control of the Company to single person or group of persons not involving a public offering), then, effective upon such distribution or public offering, the Company shall take reasonable steps necessary grant to obtain the Executive a fully vested and immediately exercisable option to purchase 3% of the shares of Company common stock then outstanding (determined on a fully diluted basis after giving effect to such distribution or offering), provided that the Executive is an employee of the Company on the date of such grant, or prior thereto, terminated employment under circumstances described in Section 5.2(b). The terms of such option shall provide that, at the earliest practicable date all written consents (if necessary) from holders of Options to effect time following the cancellation of such holders' Options at time that the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior Company becomes subject to the Effective Timereporting requirements pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company shall take all reasonable and such action as may be necessary actions to advise so that the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely shares acquired upon exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Optionsoption may be resold without restriction, other than to receive consideration in securities law restrictions imposed by reason of the manner described in Section 2.6.1 (except Executive's status as otherwise contemplated by Section 7.13)an "affiliate" within the meaning of the Securities Act of 1933. The surrender exercise price of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 such option shall be deemed a release not more than the fair market value of any the Company common stock at the date of grant. In addition, the Company shall grant options with respect to an additional 2% of the shares of Company common stock then outstanding, which options shall be granted to such employees of the Company and all rights in such amounts and on such terms as shall be determined by the holder of such Options had, or may have had, Company in respect of such Optionsconsultation with the Executive.

Stock Options. 2.6.1(a) You were previously granted an option to purchase 1,300,000 shares of the Company’s common stock (the “Standard Grant”) pursuant to the Company’s 2000 Omnibus Equity Incentive Plan (the “Plan”) on April 6, 2006. At the Effective TimeIn addition, on such date you were granted two additional stock options, each Optionfor 200,000 shares of the Company’s common stock (the “First Additional Grant” and the “Second Additional Grant,” respectively. The terms of those grants are set forth in the applicable stock option agreements evidencing those grants; for the avoidance of doubt, whether or not vestedas of the date of this letter, that the price threshold for exercisability of the First Additional Grant has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value been met. You have received subsequent equity compensation awards (“Follow-On Grants”), and shall be cancelledeligible in the future to receive additional equity compensation awards from time to time in the Compensation Committee’s sole discretion, without any payment taking into account performance, overall compensation and such other considerations as the Compensation Committee may deem relevant. (b) Notwithstanding anything in this agreement, the Plan or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal applicable stock option agreements to the Options Spread Value. For any holder contrary, if the Company is subject to a “Change of OptionsControl” (for purposes of this Section 6, the "Options Spread Value" term “Change of Control” shall be equal to, with respect have the meaning assigned to such Optionsterm in the Plan) before your employment with the Company terminates and you are subject to an Involuntary Termination (as defined in this Offer Letter) within 12 months on or after that Change of Control, the differencethen your Standard Grant, if positiveFirst Additional Grant, between (i) the product Second Additional Grant, and all Follow-On Grants will each become 100% vested and exercisable as to all of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less options upon such Involuntary Termination (ii) the aggregate exercise price with respect to such Optionsas defined in this Offer Letter). The "Xxxxxx'x Stock Value" Such consideration shall be equal in addition to any cash payments to which you may be entitled under the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Timesection entitled Severance Pay below. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At Effective as of the Effective Timenext monthly grant date under the Company’s equity compensation policy following the Commencement Date, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value Company shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal grant to the Options Spread Value. For any holder Executive options to purchase six hundred thousand (600,000) shares of Class D Common Stock (the “Options, ,” and the "Options Spread Value" shall be equal to, with respect to shares of Class D Common Stock obtainable upon exercise of such Options, the difference“Option Shares”). Notwithstanding the foregoing, if positiveExecutive agrees that the Options grant may be deferred until the month following the next monthly grant (or to successive months) if, between (i) in the product Compensation Committee’s sole discretion, such a deferral is deemed necessary to comply with ixxxxxx xxxxxxx rules and regulations. Except as set forth in this Section 5.10, all terms and conditions of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (iiand such Option Shares) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to set forth in the closing price of a share of Company’s equity compensation plan and such documentation as the Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Timemay prescribe. 2.6.2. Prior to the Effective Time, the Company (a) The price payable by the Executive for each Option Share shall take be the Fair Market Value of each Option Share on the date of grant as set forth in the option agreement. (b) The Options to purchase Option Shares shall vest in accordance with the following schedule: Vesting Date Vested Percentage of Options to Purchase Option Shares April 15, 2009 33 1/3 % April 15, 2010 66 2/3 % April 15, 2011 100 % (c) Notwithstanding any other provision contained herein, upon a Change of Control, all reasonable steps necessary of the Executive’s Options shall become fully and immediately exercisable. (d) Upon termination of the Executive’s employment hereunder, any then unexercisable Option shall expire and be immediately forfeited. The Executive’s right to make exercise any amendments to exercisable Option following termination of her employment shall be governed in accordance with the terms of the Stock Company’s equity compensation plan; provided, however, that if the Executive’s employment terminates for any reason other than her death or Disability, any exercisable Option Plans, shall not also expire and be forfeited until the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and ninetieth (b90th) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents day following such termination. (if necessarye) from holders of All unexercised Options to effect acquire Option Shares shall expire on the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options tenth anniversary of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise dates of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsgrant.

Stock Options. 2.6.1. At Employee shall be granted options (the Effective Time"Options") to purchase from the Company all or any part of a total of 250,000 shares of the Company's Common Stock, each Optionpar value $.001 per share, whether or not vested, that has at an exercise price that is equal to or greater than above the Xxxxxx'x closing price of the Company's Common stock on the date of grant (the "Date of Grant") of the Options. One half of the option shares will be issued as an "incentive stock option" and one half will be issued as a "non-qualified stock option" within the meaning of Section 422 of the Internal Revenue Code. The Options will expire on the day prior to the tenth (10th) anniversary of the Date of Grant, or such earlier date as may be provided in the 1997 Stock Value Compensation Plan (the "Plan"). Subject to the provisions of Plan, the Options may be exercised as follows; on the date that is six (6) months from the Date of Grant, twenty-five percent (25.000%) of the options granted shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, and thereafter beginning on the first day of the seventh month after the Date of Grant, one thirty-sixth (1/36) of the remaining portion shall vest on the first day of each month, from month to month, until fully vested. In addition to the foregoing stock option grant, Employee will be eligible to participate in the Company's stock option plan and therefore be eligible for an annual grant of additional stock options, if any, that are awarded to all of the Company's employees. If Employee is terminated "without cause" under Section 6(d) above, then the effect of the termination of the Employee's employment on such options shall be cancelled and, as soon as reasonably practicable after determined by the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product terms of the Xxxxxx'x Stock Value multiplied by Plan and the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect option agreement related to such Options. The If Employee is terminated "Xxxxxx'x Stock Valuefor cause" under Section 6(c) above, then the Options shall be equal to terminated. In the closing price event of a share "Change of Company Common Stock Control" as reported on defined in the American Stock Exchange on Plan or the Business Day immediately prior to issuance of 33% of the Effective Time. 2.6.2. Prior to the Effective Time, outstanding shares of the Company while this Agreement remains in effect, then the Options issued and outstanding to Employee shall immediately vest (a) shall take all reasonable steps necessary to make 100%), and the Employee may exercise his options at any amendments to time during the terms original term of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreementoption agreement (as defined therein), and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders such termination of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), shall not cause termination or expiration of the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At Subject to approval by the Effective TimeBoard, each Optionthe Company anticipates granting Executive options to purchase an aggregate of approximately 401,936 shares of the Company’s common stock, whether or not vestedwhich represents approximately 2.5% of the shares outstanding as of the close of the Qualified Series A financing, that has with an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, per share equal to the Options Spread Valuefair market value per share determined by the Board as of the date of grant (the “Option”). For any holder The Option will be issued pursuant to the Company’s 2018 Equity Incentive Plan (the “Plan”) and a stock option agreement, and will include both time-based and milestone vesting as follows: (A) the time-based vesting portion of Optionsthe Option will apply to 160,775 shares of the Company’s common stock (“Tenure Option”), which will have a four-year vesting schedule, under which 25% of the "Options Spread Value" shall be equal toshares subject to the Tenure Option will vest 12 months after the vesting commencement date, with respect and 1/48th of the shares subject to such Optionsthe Tenure Option will vest at the end of each month thereafter; and (B) the milestone-based portion of the Option will apply to 241,161 shares of the Company’s common stock (the “Milestone Option”), subject to Employee remaining a Service Provider, as defined by the differencePlan, if positiveas of the date of vesting of the applicable portion of the Milestone Option, between (i) the product 60,290 shares of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock Company’s common stock subject to such Options less the Milestone Option (~15% of the option grant) will vest on the date six (6) months after the completion of an IPO, (ii) 90,435 shares of the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal Company’s common stock subject to the closing price Milestone Option (~22.5% of the option grant) will vest vest upon the initiation of a share Phase I trial of Company Common Stock as reported on the American Stock Exchange on Company’s gamma-delta (γδ) T cell immunotherapy program in combination with a checkpoint inhibitor therapy for the Business Day immediately prior treatment of glioblastoma, and (iii) 90,435 shares of the Company’s common stock subject to the Effective Time. 2.6.2. Prior Milestone Option (~22.5% of the option grant) will vest upon the initiation of a Phase I trial of the Company’s gamma-delta (y8) T cell immunotherapy for an indication other than those that have been submitted to the Effective TimeFood and Drug Administration as of the date of this Agreement (which, for the Company avoidance of doubt, are (a) shall take all reasonable steps necessary to make any amendments to the terms treatment of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, leukemia and lymphoma patients undergoing haploidentical stem cell transplantation and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13glioblastoma). The surrender No right to any common stock or any portion of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 Option shall be deemed a release to be earned or accrued until such time that vesting occurs, nor does this gxxxx xxxxxx any right to continued vesting of any and all rights the holder of such Options had, Option or may have had, in respect of such Optionsemployment with the Company.

Stock Options. 2.6.1. At the close of business on the Effective TimeDate of the Reorganization, the Holding Company will assume all of the Bank's rights and obligations under the Mission National Bank 1999 Stock Option Plan (the "Stock Option Plan") and under each Optionoutstanding stock option agreement evidencing an option (whether an incentive stock option or a nonstatutory stock option) previously granted under the Stock Option Plan. The Stock Option Plan shall become the "MNB Holdings Corporation Stock Option Plan" and by virtue of such assumption, whether all rights of an optionee with respect to the common stock of the Bank shall become the same right with respect to the common stock of the Holding Company, on a one-for-one basis. Each such option, subject to such modifications as may be appropriate or not vestedrequired, that has an exercise and subject to the requirements of the Securities Act of 1933, as amended, and the California Corporate Securities Law of 1968, shall constitute a continuation of the option, substituting the Holding Company for the Bank. The option vesting period and price that is equal to or greater than the Xxxxxx'x Stock Value per share of Holding Company common stock at which such option may be exercised shall be cancelledthe same vesting period and price as were applicable to the purchase of Bank common stock, without any payment or and all other consideration therefor. At terms and conditions applicable to the Effective Timeoption shall, except as may be otherwise provided in Section 7.13herein, all other Optionsbe unchanged. Each option granted pursuant to the Stock Option Plan, whether or not vestedfrom and after the close of business on the Effective Date of the Reorganization, shall be cancelled and, as soon as reasonably practicable constitute an option granted by the Holding Company and outstanding pursuant to the MNB Holdings Corporation Stock Option Plan. Promptly after the Effective TimeDate of the Reorganization, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal the Holding Company will prepare and file with the Securities and Exchange Commission a registration statement on Form S-8 under and pursuant to the Options Spread Value. For any holder Securities Act of Options1933, as amended, for the "Options Spread Value" shall be equal to, with respect to such Options, purpose of registering the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the maximum number of shares of the common stock of the Holding Company Common Stock subject to such Options less (ii) which the aggregate exercise price with respect holders of options granted and outstanding, or to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Timegranted and outstanding, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of under the Stock Option Plans, the individual Option agreements Plan or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective MNB Holdings Corporation Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall Plan may be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsentitled.

Stock Options. 2.6.1. At During the Effective TimeEmployment Period, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value Executive shall be cancelled, without any payment or other consideration therefor. At eligible for the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled andgrant of options under the Company’s 2002 Incentive Stock Option Plan, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, amended commensurate with respect to such Options, the difference, if positive, between other senior executives. (i) The Company shall use its reasonable best efforts to cause to be granted to the product of the Xxxxxx'x Stock Value multiplied by the number of Executive an option to purchase 100,000 shares of Company Common Stock subject to such Options less common stock (iithe “Option”) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments pursuant to the terms of the Company’s 2002 Incentive Stock Option PlansPlan, as amended (the “Plan”). Consistent with the Plan, the individual Option agreements or the Options that are necessary to give effect will have a 10-year term and an exercise price equal to the transactions contemplated fair market value of the Company’s common stock at the time of the grant. The Option will become vested with respect to 25% of the shares subject to the Option on each anniversary of the date hereof as long as the Executive remains employed by the Company. Notwithstanding the foregoing, the granting of the Option, and the terms thereof, shall be subject to approval by the Compensation Committee of the Board. (ii) Notwithstanding the provisions of Section 3(c)(i) above, if, prior to the last day of the Noncompetition Period (as defined in Section 6(b)), the Executive breaches any of the provisions of Sections 6, 7 or 8 of this AgreementAgreement or is terminated for Cause, then (i) the Executive’s Option shall immediately terminate, and (bii) the Executive shall take reasonable steps necessary promptly pay to obtain at the earliest practicable date all written consents Company an amount of cash equal to the Gain Realized (if necessaryas defined below) from holders on any shares acquired through the exercise of Options the Option (the “Option Shares”) during the Restricted Period (as defined below). For purposes of this Section 4(c)(ii), “Restricted Period” shall refer to effect the cancellation period of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or time commencing 90 days prior to the Effective Time, effective date of termination of the Company Executive’s employment and ending on the last day of the Noncompetition Period; and “Gain Realized” shall take all reasonable equal the difference between (x) the fair market value of the Option Shares on the date the Option is granted and necessary actions to advise (y) the holders greater of Options the fair market value of their respective rights under this Agreement the Option Shares (including, without limitation, as contemplated by Section 7.13), A) on the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise date of acquisition of such rights and obligations to effectuate Option Shares or (B) on the first date any of the provisions of Section 6, 7 or 8 of this Section 2.6 and Section 7.13. From and after Agreement were breached or the Effective Time, no holder effective date of Options shall have any rights in respect termination of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and Executive’s employment if the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsExecutive was terminated for Cause.

Stock Options. 2.6.1(a) The company has previously granted to Executive various stock options to purchase shares of the Company’s common stock (the “Shares”), pursuant to the Company’s 2000 Stock Plan (the “Plan”). At As a result of the Effective Timeforegoing grants, each Option, whether or not vested, and vesting that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal occurred thereunder to the Options Spread Value. For any holder date of Optionsthis Agreement, the "Options Spread Value" shall be equal tooptions currently held by Executive are as follows: Grant Tax No. of Exercise Vesting Vesting Expiration Date Character Shares Price Status Schedule Date 4-27-05 ISO 90,000 $ 5.00 29,250 Vested 20,250 on 4-27 of 2007, with respect to such Options2008 and 2009 4-27-15 5-16-06 ISO 36,000 $ 8.33 None Vested 9,000 on 5-16 of 2007, the difference2008, if positive, between 2009 and 2010 5-16-16 (ib) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal In addition to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Timeforegoing outstanding options, the Company (a) shall take all reasonable steps necessary has also agreed to make any amendments grant to Executive the additional stock options described on Exhibit A hereto, pursuant to the terms of the 2000 Stock Option PlansPlan, and in each case subject to satisfaction of the individual Option agreements or respective milestones specified on Exhibit A and Executive’s being employed hereunder at the Options time the Board determines that are necessary to give effect such milestone has been satisfied. Such additional options shall be exercisable at a price equal to the transactions contemplated fair market value of the Company’s common stock as determined by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of Board on such holders' Options at the Effective Time in accordance with Section 2.6.1date. 2.6.3. At or prior to (c) If the Effective TimeCompany’s common stock is registered under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”), the Company shall take use its good faith efforts to register under the Securities Act of 1933 on Form S-8 (or any successor form) all reasonable common stock issued and/or issuable under the 2000 Stock Plan, including the Shares subject to the options described above and necessary actions all other stock options granted or awarded to advise the holders of Options of their respective rights Executive under this Agreement (including, without limitation, or otherwise under the 2000 Stock Plan; and shall use its good faith efforts to qualify such common stock for sale under such state securities or ‘blue sky’ laws as contemplated by Section 7.13), the Options, Company shall determine are required to issue the respective Option agreements shares of common stock under the 2000 Stock Plan and for the respective Stock Option Plans, to facilitate the timely exercise resale of such rights and obligations to effectuate shares by the provisions of this Section 2.6 and Section 7.13. From and after recipients thereof, provided that the Effective Time, no holder of Options Company shall have no obligation to qualify such stock in any rights particular jurisdiction in respect which the Company would be required to execute a general consent to service of process in effecting such Optionsqualification, other than unless the Company is already subject to receive consideration service in the manner described in Section 2.6.1 (such jurisdiction and except as otherwise contemplated may be required by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsSecurities Act.

Stock Options. 2.6.1Subject to Board approval, Executive shall be granted stock options (the "Two Million Options") to purchase an aggregate of Two Million (2,000,000) shares of common stock of the Company. At The Two Million Options are deemed to be of record as of February 16, 1999 in order to be eligible for the Effective TimeMarch 9, each Option1999 stock split. The Two Million Options shall be granted in accordance with, whether or not vested, that has an and subject to the following: (a) The exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Two Million Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share the common stock of the Company Common Stock as reported on the American Stock Exchange on the Business Day immediately day before this Agreement is executed and delivered and announced minus Ten Dollars ($10) per share. The Two Million Options may be exercised at any time after vesting but prior to the Effective Timeexpiration. 2.6.2. Prior to the Effective Time, the Company (ab) The Two Million Options shall take all reasonable steps necessary to make any amendments be subject to the terms and conditions of the 1998 Global Crossing Incentive Stock Option PlansPlan, a copy of which is attached hereto and incorporated herein by reference as Exhibit "B" and a Non-Qualified Stock Option Agreement, the individual Option agreements or the form of which is attached and incorporated herein by reference as Exhibit "C". (c) The Two Million Options that are necessary to give effect shall vest in such shares according to the transactions contemplated by following schedule: Tranche No. of Shares Vesting ------- ------------- ------- 1 500,000 Immediately upon execution of this AgreementAgreement 2 500,000 February 22, and 2000 3 500,000 February 22, 2001 4 500,000 February 22, 2002 The vesting schedule shall be accelerated in the event of a Non-Fault Termination (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time as defined in accordance with Section 2.6.112). 2.6.3. At or prior to (d) In the Effective Timeevent there is a Change of Control at any time during the Term, then the Company shall take all reasonable and necessary actions to advise acceleration of the holders vesting schedule of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Two Million Options and the receipt exercisiability of consideration therefor in accordance with Section 2.6.1 the Two Million Options shall be deemed governed by the Plan upon such Change of Control. (e) The Two Million Options shall expire on the earlier of ten years from the date of grant or the termination date set forth in the Plan after termination of Executive's employment with Company. (f) At the end of the initial Term, Executive shall have the right, for a release period of any six (6) months thereafter exercisable on ten (10) days written notice to Company ("Put Period"), to require the Company to purchase from him up to 2,000,000 shares of the common stock of the Company held by Executive as a result of the exercise of the Two Million Options at a purchase price equal to the closing price of the common stock of the Company on the day before this Agreement is executed and all delivered and announced (which the parties agree is set forth on Exhibit A hereto). (g) In the event the outstanding shares of common stock of Company are changed into or exchanged for a different number or kind of shares or other securities of Company or of another corporation by reason of merger, consolidation, other reorganization, reclassification, combination of shares, stock split-up or stock dividend, rights of the holder Two Million Options granted hereunder, the number of such Options had, or may have had, in respect of such Optionssubject shares and the exercise price (and other terms herein relating thereto) shall be adjusted appropriately.

Stock Options. 2.6.111.1 As an inducement to Employee to enter into this Agreement, the Company hereby grants to Employee options to purchase 150,000 shares of the Company’s Common Stock, $.001 par value (the “Options”), subject to the terms and conditions of this Agreement, and the terms and conditions of the Company’s 2006 Long Term Incentive Plan (the “Plan”), and the Stock Option Agreement, which are incorporated herein by reference. At The Options shall be qualified as incentive stock options to the Effective Timeextent permitted by law. 11.2 Provided Employee is an employee of the Company on the vesting date, each Optionand unless otherwise provided by this Agreement, whether the Options shall vest as follows: (a) 50,000 Options on the Commencement Date; (b) 50,000 Options if the Closing Price of the Company’s Common Stock equals or not exceeds $3.00 per share for ten consecutive trading days; and (c) 50,000 Options if the Closing Price of the Company’s Common Stock equals or exceeds $5.00 per share for ten consecutive trading days. The Options, to the extent vested, shall be exercisable for a period of ten years from the date of this Agreement (the “Exercise Period”). 11.3 The Closing Price of a share of Common Stock shall mean (i) if the Common Stock is traded on a national securities exchange or on the Nasdaq Stock Market (“Nasdaq”), the per share closing price of the Common Stock shall be the reported closing price the principal securities exchange on which they are listed or on Nasdaq, as the case may be, on the date of determination (or if there is no closing price for such date of determination, then the last preceding business day on which there was a closing price); or (ii) if the Common Stock is traded in the over-the-counter market but bid quotations are not published on Nasdaq, the closing bid price per share for the Common Stock as furnished by a broker-dealer which regularly furnishes price quotations for the Common Stock; provided, however, that has an in the event of a Change in Control, the closing price shall be the “Change in Control Price” as defined in the Plan. 11.4 The exercise price that is of the Options shall be equal to or greater than Fair Market Value of the Xxxxxx'x Company’s Common Stock Value on the date this Agreement is fully executed as determined under the Plan, and shall contain such other terms and conditions as set forth in the stock option agreement. The Options provided for herein are not transferable by Employee and shall be cancelledexercised only by Employee, without any payment or other consideration thereforby his legal representative or executor, as provided in the Plan. At Such Options shall terminate as provided in the Effective TimePlan, except as otherwise provided in Section 7.13, all other Options, whether modified by this Agreement or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to stock option agreement. 11.5 In the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price event of a share termination of Company Common Stock as reported on Employee’s employment with the American Stock Exchange on the Business Day immediately prior to the Effective Time.Company: 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary pursuant to make any amendments to the terms Section 9.1(a), options granted and not exercised as of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, Termination Date shall terminate immediately and be null and void; (b) due to the Employee’s death, or Disability, the Employee’s (or his estate’s or legal representative’s) right to purchase shares of Common Stock of the Company pursuant to any stock option or stock option plan to the extent vested as of the Termination Date shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time remain exercisable in accordance with Section 2.6.1.the Plan, but in no event after the expiration of the Exercise Period; 2.6.3. At (c) by the Employee other than for Good Reason, Employee’s right to purchase shares of Common Stock of the Company pursuant to any stock option or prior stock option plan to the Effective Time, extent vested as of the Company Termination Date shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor remain exercisable in accordance with Section 2.6.1 the Plan, but in no event after the expiration of the Exercise Period; and (d) in the event of Employee’s termination by the Company without Cause or by Employee for Good Reason, options vested as of the Termination Date shall remain exercisable in accordance with the Plan, but in no event after the expiration of the Exercise Period (it being agreed and acknowledged that unvested options shall be deemed a release of any and all rights void immediately upon the holder occurrence of such Options had, or may have had, in respect of such Optionsa termination event).

Stock Options. 2.6.1. At (i) On the Effective TimeDate and each of the first four (4) anniversaries of the Effective Date on which the Executive remains employed hereunder, each Optionthe Executive shall be granted an Option to purchase Forty Thousand (40,000) shares of Common Stock. In the event the Executive's employment hereunder is terminated by the Company without Cause or by the Executive for Good Reason prior to the Expiration Date, whether the Executive shall be granted, as of the date of such Termination of Employment, a number of Options equal to Two Hundred Thousand (200,000) minus the number of Options previously granted pursuant to the immediately preceding sentence. (ii) All Options described in paragraph (i) above shall be granted subject to the following terms and conditions: (A) the Options shall be granted under and subject to the Option Plan; (B) the exercise price of the Options shall be, (1) in the case of the Options granted on the Effective Date, $29.875 and (2) in the case of the Options granted thereafter, the last reported sale price of the Common Stock on the Nasdaq National Market System (or not vestedother principal trading market for the Common Stock) at the close of the trading day immediately preceding the date as of which the grant is made; provided, however, that has with respect to any Options the grant of which is accelerated because the Executive's employment is terminated either by the Company or the Executive as a result of a Change in Control, the exercise price of such Options shall be the lower of (x) the exercise price equal to the average last reported sale price on the Nasdaq National Market System (or other principal trading market for the Common Stock) for the 30 trading days prior to the ten trading days ending at the close of the trading day immediately preceding the date on which any announcement of such Change in Control is made and (y) an exercise price that is equal to the last reported sale price of the Common Stock on the Nasdaq National Market System (or greater other principal trading market for the Common Stock) at the close of the trading day immediately preceding the date as of which the grant is made; (C) twenty-five percent (25%) of the Options shall vest on each of the first four (4) annual anniversaries of the date of grant if and to the extent that a Termination of Employment has not occurred, provided that in the event of a Contract Non-Renewal, all such Options shall vest and become exercisable on the Expiration Date and in the event of a Termination of Employment by the Executive for Good Reason or a Termination of Employment by the Company other than for Cause, all such Options shall vest and become exercisable on the Xxxxxx'x Stock Value date of such Termination of Employment; (D) each Option shall be cancelledexercisable for the ten (10) year period following the date of grant; (E) each Option shall be evidenced by, without and subject to, an Option Agreement; and (F) the number of shares granted shall be subject to adjustment for any payment or other consideration therefor. At the Effective Time, except subsequent stock splits. (iii) Except as otherwise provided in Section 7.13paragraph (ii) above, all other Options, whether or not vested, the Option Agreements shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of specify that such Options shall receive remain exercisable for the periods described in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less paragraph (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price above notwithstanding any Termination of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such OptionsEmployment, other than to receive consideration in a Termination of Employment by the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsCompany for Cause.

Stock Options. 2.6.1. At The Company agrees that it will grant to the Effective TimeExecutive, pursuant to the terms of the Company’s 2009 Equity Incentive Plan (the “Plan”) to be established by the Company following the Company’s conversion to a Delaware corporation, stock options to purchase shares of the Common Stock of the Company (each an “Option” and collectively, whether or not vested, that has an exercise price that the “Options”) representing five percent (5%) of the shares of capital stock of the Company outstanding following the Series A Preferred Stock Financing of the Company (which is equal expected to or greater than occur in the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled andfirst fiscal quarter of 2009) determined on a fully-diluted, as soon as reasonably practicable after converted to Common Stock basis, including shares reserved for issuance pursuant to the Effective Time, each holder of such Plan. Such Options shall receive in lieu of such Options include an amount in cash“early-exercise” feature, without interest, equal which will allow the Executive to exercise the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to some or all of the unvested shares and such unvested shares shall thereafter be subject to a repurchase option in favor of the Company, which repurchase option shall lapse in accordance with the stated vesting of such unvested Options. To the maximum extent possible, the difference, if positive, between (i) the product Options shall be “incentive stock options” as such term is defined in Section 422 of the Xxxxxx'x Stock Value multiplied by Internal Revenue Code of 1986, as amended (the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options“Code”). The "Xxxxxx'x Stock Value" purchase price of the shares issuable upon exercise of the Options shall be equal to the closing price fair market value per share of the Company’s Common Stock on the date of grant, as determined in good faith by the Board based on a valuation performed by a qualified independent appraiser using a traditional appraisal methodology. The Options will be subject to vesting over a period of four (4) years following the grant date, with 1/4th of the shares subject to such Options vesting on the one (1) year anniversary of the grant date and 1/48th of the shares subject to such Options vesting on a monthly basis thereafter until all the shares subject to such Options are vested on the fourth anniversary of the grant date, in each case only so long as the Executive remains continuously employed by the Company. In the event of a share Change in Control (as defined below), regardless of Company Common Stock as reported on termination of the American Stock Exchange on Executive’s employment, the Business Day immediately prior vesting of the Options set forth in Section 3.3 hereof shall accelerate and vest in full. The terms and vesting of the Options will be more fully set forth in the Plan and shall be subject to the Effective TimeCompany’s standard form of stock option agreement. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At In addition to the Effective Timecompensation and benefits described above, each Optionthe Company will grant you, whether or not vestedupon the Closing Date, that has a stock option which, when combined with the Rollover Options (as defined below) will give you options to purchase an aggregate of two percent (2%) of the outstanding shares of the Company’s common stock (based on basic shares outstanding as measured immediately following the consummation of the Acquisition), with the new option grant provided in this Section 3 having a per share exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing sales price of a share of Company Common Stock as reported the Company’s common stock on the American Stock Exchange Closing Date and providing that the new option shall vest with respect to 25% of the total option shares on the Business Day immediately prior first anniversary of the Closing Date, and 1/48th of the total option shares shall vest each month thereafter so that all of the shares subject to the Effective Time. 2.6.2. Prior to new option are vested and exercisable on the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms fourth anniversary of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) Closing Date. The Company shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At file a registration statement on Form S-8 on or prior to the Effective Timefirst anniversary of the Closing Date, registering the Company shall take all reasonable and necessary actions offer of the shares of the Company’s common stock subject to advise the holders foregoing stock option. For purposes of Options calculating the number of their respective rights under this Agreement options required to give you options to purchase an aggregate of two percent (including, without limitation, 2%) of the outstanding shares of the Company’s common stock (as contemplated by Section 7.13described above), the option grant described in this Section 3 shall be combined with the options to purchase Company common stock which you will receive pursuant to the rollover of your stock options in Target pursuant to the Acquisition agreement (the “Rollover Options”). For good and valuable consideration, you agree that any acceleration of the respective Option agreements Rollover Options (either alone or in combination with another event) which may have occurred in connection with the Acquisition and the respective Stock Option Plansother transactions contemplated by the Acquisition agreement is hereby waived, to facilitate the timely exercise of it being further agreed that any such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options acceleration shall have any rights in respect of such Options, other than to receive consideration apply in the manner described event of a change in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender control transaction involving the Company following the consummation of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsAcquisition.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) On the date hereof (the "Transfer Date"), BWI shall take all reasonable steps necessary to make any amendments grant to the Employee pursuant to BWI's 1993 Stock Option and Incentive Plan (the "Plan") an option to purchase 25,000 shares of common stock, par value of $.01 per share, of BWI (the "BWI Common Stock"). On each of the first, second, and third anniversaries of the date hereof, BWI shall grant to Employee under the Plan (or any successor plan) an option to purchase 25,000 shares of BWI Common Stock (the total options to which Employee is entitled under this Section 1.1.4 shall be referred to as the "Options"). The exercise price for the Options shall be the fair market value of BWI Common Stock on the respective grant dates and each of the Options shall vest 25% on each of the first four (4) anniversaries of the respective grant dates. To the maximum extent permissible, the Options shall be incentive stock options. The other terms of the Options shall be as set forth in the grant letters attached hereto as Exhibit A-1 and Exhibit A-2. BWI agrees to continue to register the BWI Common Stock Option Plans, issuable upon the individual Option agreements exercise of Options granted under the Plan on Form S-8 (or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and any successor form). (b) shall take reasonable steps necessary to obtain at In the earliest practicable date all written consents (if necessary) from holders event that changes in the BWI Common Stock of Options to effect the cancellation type described by Section 10 of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or Plan occur prior to any of the Effective Timeanniversaries of the date hereof, the Company number and kind of securities as to which BWI shall take all reasonable and necessary actions thereafter be obligated to advise grant an option or options to the holders of Options of their respective rights under Employee pursuant to this Agreement (including, without limitation, Section 1.1.4 shall be adjusted as appropriate as contemplated by Section 7.13), 10 of the Options, Plan as if such options had already been granted to the respective Option agreements and Employee prior to the respective Stock Option Plans, to facilitate the timely exercise date of such rights and change in the BWI Common Stock. (c) BWI's obligations to effectuate the provisions issue options under this Section 1.1.4 are an integral part of this Agreement and BWI agrees never to assert that the general disclaimer of Section 2.6 and 14 of the Plan to the effect that BWI shall not bind itself to award shares under the Plan invalidates or limits in any way BWI's obligations to Employee under this Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options1.1.4.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options Executive shall receive in lieu a stock option grant of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of 650,000 shares of Company Common Stock subject to such Options less common stock (ii) the aggregate exercise price with respect to such Options"Option Shares"). The "Xxxxxx'x Stock Value" Option Shares will vest over a five (5) year period from the Effective Date; provided that Executive is employed as of any vesting date and if Executive is terminated for cause, all unvested stock will be forfeited and cancelled; and provided further that Executive shall be equal to fully vested in any, then unvested Option Shares (A) in the closing price event of the termination of Executive's employment by the Company other than for Cause (as defined below), (B) upon the consummation of a share Change in Control, or (C) upon the death or disability of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2Executive. Prior to the Effective Time, This stock option grant shall be under the Company (a) 2002 Incentive Stock Option Plan and the parties shall take all reasonable steps necessary to make any amendments to enter into a separate stock option agreement reflecting the terms of this stock option grant. The stock option grant shall provide that any vested options, may be exercised at any time within 7 years after the Stock Option Plansdate of vesting, except that any options that vest because of an event described in (A), (B) or (C) may be exercised only during the individual Option agreements or seven (7) year period beginning on occurrence of the Options that are necessary to give effect to vesting event. The stock option grant shall further provide that, if at any time when there is not an effective Registration Statement on Form S-8 covering the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Timeoption shares, the Company shall take all reasonable determine to prepare and necessary actions file with the Securities and Exchange Commission a registration statement relating to advise an offering for its own account or the holders account of Options others under the Securities Act of their respective rights 1933 of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under this Agreement (including, without limitation, as contemplated by Section 7.13the Securities Act), the OptionsCompany provide the Executive with written notice of such determination and, if the Executive so desires, the respective Option agreements and Company will cause the respective Stock Option Plans, to facilitate registration under the timely exercise Securities Act of such rights and obligations to effectuate number of option shares as the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options Executive shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13)designate. The surrender Company shall use its best efforts to register, and maintain the effectiveness of the registration, for resale all of the Option Shares granted to Executive pursuant to a Form S-8 (or any Options and successor form) registration statement under the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsSecurities Act.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options Executive shall receive the following stock options in lieu of such Options an amount in cash, without interest, equal to accordance with the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between following terms and conditions: (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective TimeOn September 6, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time2002, the Company shall take all reasonable grant to Executive options to purchase 265,000 shares of Common Stock under the Company's 2002 Omnibus Stock Option and necessary actions Long-Term Incentive Plan (the "2002 Plan"), subject to advise Executive's execution of the holders Company's standard option agreement, as described below. Such options shall vest as follows: 66,250 shall vest on September 6, 2003; 66, 250 shall vest on September 6, 2004; 66,250 shall vest on September 6, 2005; and 66,250 shall vest on September 6, 2006. (ii) Executive shall be eligible for consideration by the Committee for annual grants of Options stock options under the 2002 Plan or any successor plan, in the sole discretion of their respective rights the Committee. Nothing contained in this Agreement constitutes a guarantee that the Committee will award Executive additional stock options beyond those specifically described in Section 6(b)(i) of this Agreement. (iii) All grants of options under this Agreement are subject to and conditioned upon the Company obtaining all necessary shareholder approvals, if any, which Company shall use all reasonable efforts to obtain. Each time Executive receives a grant of stock options pursuant to this Section 6(b), he shall be asked to enter into the Company's standard Non-Qualified Stock Option Agreement (includingthe "Option Agreement") which shall set forth the terms and conditions governing the grant and exercise of the Options including such terms as are set forth in this Section 6(b) and which Option Agreement with respect to the option grants under the 2002 Plan shall be substantially similar to the Option Agreement attached hereto as Appendix B. The Company shall use its best efforts to file, without limitationand cause to be effective under the Securities Act of 1933, as contemplated by Section 7.13)amended, a registration statement on Form S-8 (or a comparable form) with respect to the Optionsshares (or other rights) granted or issued as provided for or referenced in this Agreement or, the respective Option agreements and the respective Stock Option Plansif applicable, to facilitate the timely issuable upon exercise of rights so provided or referenced, but the Company shall not be obligated to register any such shares or rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13)for resale. The surrender of any Options and Company will also use its best efforts to ensure that each grant referenced above shall meet the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights requirements for exemption under Rule 16b-3 under the holder of such Options had, or may have had, in respect of such OptionsAct.

Stock Options. 2.6.1. At So long as this Agreement remains in full force and effect, and subject to approval by the Effective TimeBoard, each Option, whether or not vested, that has the Employee will be granted the right and option to purchase up to One Hundred Twenty Three Two Hundred Fifty Four (123,254) shares (the “Shares”) of the Common Capital Stock of the Company (the “Stock”) at an exercise price that based upon the fair market value of the Common Stock on the date the grant is equal approved by the Board. The options granted above shall vest in accordance with the following schedule: Thirty Thousand Eight Hundred Fourteen (30,814) options shall vest on September 18, 2019, and thereafter, an additional Two Thousand Two Hundred One (2,201) options shall vest monthly with the first monthly vesting occurring on October 18, 2019 and on the 18th day of each month thereafter occurring during the Employment Term. As a condition precedent to or greater than this grant, the Xxxxxx'x Employee shall execute and deliver the Company’s standard form Incentive Stock Value Option Agreement and the grant shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms and conditions of the Incentive Stock Option PlansAgreement and the Company’s Stock Option and Restricted Stock Plan. At such time as the parties agree to increase the Employee’s time commitment to forty (40) hours, the individual Option agreements or Employee will be granted the Options that are necessary right and option to give effect purchase up to an additional One Hundred Twenty Two Hundred Fifty Three (123,253) Shares of the transactions contemplated Common Capital Stock of the Company at an exercise price based upon the fair market value of the Common Stock on the date the grant is approved by this Agreement, and (b) the Board. The additional options granted herein shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time vest in accordance with Section 2.6.1. 2.6.3the following schedule: Thirty Thousand Eight Hundred Fourteen (30,814) options shall vest six (6) months from the date that the Employee commenced working as a full time employee, and thereafter, an additional Two Thousand Two Hundred One (2,201) options shall vest monthly with the first monthly vesting occurring on the 18th of seventh (7th) month following the Employee becoming a full time employee and on the like monthly anniversary date thereafter occurring during the Employment Term. At or prior As a condition precedent to this grant, the Employee shall execute and deliver the Company’s standard form Incentive Stock Option Agreement and the grant shall be subject to the Effective Time, terms and conditions of the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Incentive Stock Option Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Company’s Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsRestricted Stock Plan.

Stock Options. 2.6.1. At Subject to approval by the Effective TimeCompany’s Board of Directors, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall Executive will be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between granted (i) an option (the product “First Option”) to purchase 30,000,000 shares of Common Stock under the Company’s 2000 Stock Option/Stock Issuance Plan, as amended (the “Plan”), (ii) a second option (the “Second Option”) to purchase up to 3,400,000 shares of the Xxxxxx'x Company’s Common Stock Value multiplied by under the Plan and (iii) if necessary, a third option (the “Third Option” and, together with the First Option and the Second Option, the “Options”) to purchase that number of shares of Company the Company’s Common Stock under the Plan, such that the shares underlying the Options equal 4% (the “Target”) of the Company’s Common Stock at the time of the Next Financing (assuming the conversion of all outstanding convertible securities (other than the Series F Preferred Stock) into Common Stock and the exercise of all shares available under the Plan); provided that, in the event that the shares of Common Stock underlying the First Option and the Second Option together exceed the Target, no Third Option will be granted, and the Second Option will be reduced such that the shares underlying the First Option and the Second Option together equal the Target. Regardless of whether the Second Option is reduced to zero, the First Option will not be subject to such Options less (ii) the aggregate decrease. The exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall for each Option will be equal to the closing price fair market value of the Company’s Common Stock determined by the Board of Directors as of the date of grant of such Option. 3,340,000 shares of Common Stock underlying the First Option shall be vested immediately. The balance of the shares of Common Stock underlying the First Option and all of the shares underlying the Second Option will initially be unvested and will vest in 39 equal monthly installments of 683,590 shares and 87,180 shares, respectively, beginning March 31, 2005 upon the completion of each month of service after such date. The vesting of the Third Option will be determined by mutual agreement of Executive and the Board of Directors. The Options will provide that in the event of a share termination (i) by the Company Without Cause (defined below), (ii) due to Executive’s Death or Disability, or (iii) after June 30, 2008, the Options will remain exercisable until the earlier of Company Common Stock as reported on the American Stock Exchange on the Business Day (i) Xxxxx 00, 0000, (xx) immediately prior to a Corporate Transaction (as defined in the Effective Time. 2.6.2Plan), or (iii) the date six months after the Company’s initial public offering. Prior Further in the event of a Corporate Transaction, the First Option and Second Option will vest (pro rata) with respect to the Effective Timelesser of (i) an additional 8,350,000 shares or (ii) all remaining unvested shares subject to the First Option and the Second Option. Moreover, in the event of an Involuntary Termination (as defined in the Plan documents) within 12 months of a Corporate Transaction, Executive will vest in all unvested shares under the Options. In addition, any unvested shares underlying the Options will vest on the first anniversary of a Corporate Transaction; provided that Executive is providing services to the Company at such time. For purposes of this Agreement, “Next Financing” shall mean the Company’s next debt or equity financing, or combination thereof (a) shall take all reasonable steps necessary to make any amendments to including a series of related financings or interim/bridge financings), raising at least $12,000,000 in the aggregate. The remaining terms of the Stock Option PlansOptions will be as specified in the Plan documents. 2. Except as modified herein, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, Employment Agreement remains in full force and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1effect. 2.6.33. At This Amendment Agreement may be signed in one or prior to the Effective Timemore counterparts, the Company shall take all reasonable and necessary actions to advise the holders each of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 which shall be deemed a release of any an original and all rights of which, taken together, shall be deemed one and the holder of such Options had, or may have had, in respect of such Optionssame document.

Stock Options. 2.6.1. At (i) Pursuant to the 2004 Equity Incentive Plan of the Company, as of the Effective TimeDate, each Option, whether or not vested, that has Executive shall be granted options (the “Options”) to purchase 165,000 shares of Class A Common Stock at an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the price per share at which shares of Class A Common Stock are offered to the public in the IPO. (ii) The Options Spread Value. For any holder shall vest in accordance with the following schedule: First Anniversary of Optionsthe Effective Date 24,000 shares Second Anniversary of Effective Date 24,000 shares Third Anniversary of Effective Date 117,000 shares (iii) If a share dividend, the "Options Spread Value" share split or share combination shall be equal to, occur with respect to such Optionsthe Common Shares of Texas Roadhouse Holdings LLC, the differencea Kentucky limited liability company, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal occur prior to the closing price of the IPO, or such Common Shares are exchanged for shares of Class A Common Stock in connection with the IPO on a basis other than one-to-one, the amounts set forth in this Section 4(c) shall be correspondingly adjusted. (iv) In the event of a share termination of Company Common Stock Executive’s Employment other than for Cause (as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Timedefined below) or termination by Executive for Good Reason (as defined below) within 12 months following a Change of Control (as defined below), the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to a Change of Control at the Effective Timedirection of a person who has entered into an agreement with the Company, the Company shall take all reasonable consummation of which will constitute a Change of Control, and necessary actions to advise contingent upon Executive’s execution of a full release of claims in the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by manner set forth in Section 7.1310(g), the Options, Options and all other options granted under any stock option and stock incentive plans of the respective Option agreements Company that are outstanding as of the date of termination shall become immediately exercisable in full and shall remain exercisable until the respective Stock Option Plans, to facilitate earlier of (A) two years after termination of Executive’s employment by the timely exercise of such rights and obligations to effectuate Company or (B) the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration option expiration date as set forth in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsapplicable option agreement.

Stock Options. 2.6.1. At Executive will be eligible to be granted options to purchase up to 100,000 shares of Taleo common stock at the Effective Timediscretion of the Board, each Option, whether or not vested, that has an exercise price that is equal to or greater than based upon Executive achieving the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between performance goals for a fiscal year. (i) the product of the Xxxxxx'x Stock Value multiplied by the Any stock option will be for such number of shares of Company Common Taleo Class A common stock as determined by the Compensation Committee of the Board (the “Stock Option”). Any Stock Option will have a per-share exercise price equal to the fair market value of a share on the date of grant, will vest over a 4-year period, with 25% of the shares vesting on the first anniversary of the Effective Date, and 1/48th of the total shares vesting monthly thereafter, or at such other vesting schedule as determined by the Board, subject to such Options less Executive continuing to remain a “Service Provider” (as defined in the Company’s 1999 Stock Plan, the “Option Plan”) to the Company on each vesting date; (ii) Any Stock Option shall have (x) a ten-year maximum term, and (y) otherwise have the aggregate exercise price with respect same terms and conditions as stock options held by other senior executives of the Company, subject to such OptionsSection 6. The "Xxxxxx'x Any Stock Value" shall Option granted to Executive may be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company exercised (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Planswith cash, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary with previously owned Taleo common shares and/or (c) if Taleo’s stock is publicly traded and it is legally permissible, via a “cashless exercise” program in which payment may be made all or in part by delivery of an irrevocable direction to obtain at a securities broker to sell common shares and to deliver all or part of the earliest practicable date all written consents (if necessary) from holders sale proceeds to Taleo in payment of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior aggregate option exercise and any applicable tax withholding obligations relating to the Effective Timeexercised option. In the event of any conflict in the express terms between this Agreement and the Option Plan and any Stock Option agreement executed by and between Executive and the Company, the Company shall take all reasonable and necessary actions to advise the holders express terms of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), shall prevail and govern. Subject to the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the preceding provisions of this Section 2.6 3(c), a Stock Option will be subject to the terms, definitions and Section 7.13. From and after provisions of the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options Option Plan and the receipt stock option agreements by and between the Executive and the Company (the “Option Agreement”), all of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such which documents are incorporated herein by reference. (iii) The Stock Options had, or may have had, in respect of such Options.currently held by Executive are attached hereto as Exhibit A.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) As consideration for entering into this Agreement, the product Executive shall have the right to receive stock options of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be Access in an amount equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) 5,000 shares issued at market that shall take all reasonable steps necessary to make any amendments to vest and be exercisable in accordance with the terms of the Stock Option Plans, Plan adopted by Access’ Board of Directors and shareholders. The stock options shall be awarded as of the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by Effective Date of this Agreement, and (b) . The stock options shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders not provide for a deferral of Options to effect the cancellation of such holders' Options at the Effective Time compensation in accordance with Section 2.6.11.409A-1(b)(5) of the Treasury Regulations; so, the exercise price may never be less than the fair market value of the underlying stock on the date the option is granted and the number of shares subject to the option is fixed on the original date of grant of the option, the transfer or exercise of the option is subject to taxation under Section 83 of the Internal Revenue Code, the option does not include any feature for the deferral of compensation other than the deferral of recognition of income until the later of the exercise or disposition of the option or the time the stock acquired becomes substantially vested. 2.6.3. At or prior to the Effective Time(ii) As additional compensation, the Company Executive shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than be eligible to receive consideration stock options of Access annually in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options an amount equal to at least 5,000 shares issued at market that shall vest and the receipt of consideration therefor be exercisable in accordance with Section 2.6.1 the terms of the Stock Option Plan adopted by Access’ Board of Directors and shareholders. The Executive shall have the right to receive stock options in any year in which he earns an annual bonus as described above. The number of shares granted to the Executive shall be deemed determined by Access’ Board of Directors at its discretion, but shall not be less than 5,000. In the event the Employer discontinues or makes other material changes in the reduction or increase in the general use of stock options as a release means of compensation for directors, executives, and officers of the Employer, then this benefit shall be adjusted accordingly. Furthermore and provided it is true of all other participants in the Stock Option Plan, the future awards shall not be adjusted for any stock splits or dividends. However, at the time of any and all rights the holder of such Options hadstock split or dividend, or may have had, in respect of such Optionsany previously issued awards shall be adjusted accordingly.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) On the product Effective Date and each of the Xxxxxx'x first four (4) anniversaries thereof on which the Executive remains employed hereunder, the Executive shall be granted an Option to purchase One Hundred Twenty Thousand (120,000) shares of Common Stock. In the event the Executive's employment hereunder is terminated by the Company without Cause or by the Executive for Good Reason prior to the Expiration Date, the Executive shall be granted, as of the date of such Termination of Employment, a number of Options equal to Six Hundred Thousand (600,000) minus the number of Options previously granted pursuant to the immediately preceding sentence. (ii) All Options described in paragraph (i) shall be granted subject to the following terms and conditions: (A) the Options shall be granted under and subject to the Option Plan; (B) the exercise price of the Options shall be the last reported sale price of the Common Stock Value multiplied on the Nasdaq National Market System (or other principal trading market for the Common Stock) at the close of the trading day immediately preceding the date as of which the grant is made; (C) each Option shall be vested on the date of grant; (D) each Option shall be exercisable for the ten (10) year period following the date of grant, subject, however, to such approval by the shareholders of the Company as is sufficient to satisfy the requirements for listing of the Common Stock on the Nasdaq National Market System; (E) each Option shall be evidenced by, and subject to, an Option Agreement; and (F) the number of shares of Company Common Stock granted shall be subject to such adjustment for any subsequent stock splits. (iii) The Option Agreements shall specify that the Options less shall remain exercisable for the periods described in paragraph (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price above notwithstanding any Termination of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective TimeEmployment. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At (A) Upon execution of this Agreement, Company shall grant Executive a non-statutory stock option to acquire five hundred thousand (500,000) shares of the Effective Time, each Option, whether or not vested, that has Company's common stock at an exercise price of one dollar and thirty cents ($1.30) per share, exercisable at any time prior to the date that is the tenth year's anniversary of the Effective Date ("TENTH ANNIVERSARY"), subject to Section 3(ii)(F), below. (B) If on the thirtieth (30th) day following the First Anniversary Executive remains employed by the Company and has not been notified by the Board that his employment hereunder is terminated, Company shall grant Executive a non-statutory stock option to acquire an additional five hundred thousand (500,000) shares of the Company's common stock at an exercise price per share that is equal to or greater than 110% of the Xxxxxx'x Stock Value fair market value per share of the Company's common stock as of the date of the option grant. Fair market value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except determined as otherwise provided in Section 7.13the stock option plan then maintained by the Company for its employees, all other Optionsand if there is no such plan, whether or not vested, then fair market value shall be cancelled and, as soon as reasonably practicable after determined by the Effective Time, each holder Board of such Options shall receive Directors in lieu the good faith exercise of such Options an amount in cash, without interest, equal its discretion (either case to the Options Spread Valuebe hereinafter referred to "FMV". For any holder of Options, the "Options Spread Value" Such option shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately exercisable at any time prior to the Effective TimeTenth Anniversary, subject to Section 3(ii)(F), below. 2.6.2. Prior to the Effective Time, (C) If the Company files a Form 10-KSB or Form 10-K (ahereinafter, a "10-K") shall take all reasonable steps necessary with the SEC for calendar year 2004 that contains audited financial statements showing the Company's 2004 earnings before interest and taxes ("EBIT") to make any amendments to be at least two million dollars ($2,000,000), and if Executive remains employed hereunder on the terms date that such filing is made, then effective as of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Timefiling is made, the Company shall take all reasonable grant Executive a non-statutory stock option to acquire one hundred thousand (100,000) shares of the Company's common stock at an exercise price equal to 110% of such common stock's FMV on the date of the option grant. FMV wherever referred to in this Agreement shall be determined in the same manner as is set forth for grants of options under Company's stock option plan for its employees then in effect, and necessary actions if no such plan is then in effect, then fair market value shall be determined by the Board of Directors in the good faith exercise of its discretion. This option shall be exercisable at any time prior to advise the holders Tenth Anniversary, subject to Section 3(ii)(F), below. (D) If the Company files a Form 10-K with the SEC for calendar year 2005 that contains audited financial statements showing the Company's 2005 EBIT to be at least five million dollars ($5,000,000), and if Executive remains employed hereunder on the date such filing is made, then effective as of Options the date such filing is made, the Company shall grant Executive a non-statutory stock option to acquire one hundred thousand (100,000) shares of their respective rights the Company's common stock at an exercise price equal to one 110% of such common stock's FMV on the date of the option grant. This option shall be exercisable at any time prior to the Tenth Anniversary, subject to Section 3(ii)(F), below.. (E) If the Company files a Form 10-K with the SEC for calendar year 2006 that contains audited financial statements showing the Company's 2006 EBIT to be at least ten million dollars ($10,000,000), and if Executive remained employed hereunder through the third year's anniversary of the Effective Date, then effective as of the date such filing is made, the Company shall grant Executive a non-statutory stock option to acquire one hundred thousand (100,000) shares of the Company's common stock at an exercise price equal to one 110% of such common stock's FMV on the date of the option grant. This option shall be exercisable at any time prior to the Tenth Anniversary, subject to Section 3(ii)(F), below. (F) All options granted to Executive under this Agreement Section 3(ii) are referred to herein as the "OPTIONS". If Executive's employment hereunder is terminated by Company for any reason other than for "cause" (including, without limitation, as contemplated by Section 7.13defined below), or if Executive terminates his employment for "good reason" (also defined below), or if this Agreement expires in accordance with its terms, then all Options that are granted, vested and effective prior to such date of termination or expiration shall remain in effect, but those that are not then granted, vested and effective shall expire ninety (90) days after the Optionsdate of such termination or expiration. If Executive's employment hereunder is terminated by Company for "cause", or if Executive terminates his employment and does not have "good reason" to terminate, then all Options that have been granted but are not exercised by Executive on or before the respective Option agreements and date of such termination shall expire on the respective Stock Option Plans, to facilitate the timely date of termination of employment. (G) All shares acquired upon exercise of such options granted under this Section 3(ii) shall have "piggyback" registration rights no more restrictive than those granted to any other officer of the Company; provided, however, that if Executive's employment hereunder is terminated by Company for "cause", or if Executive terminates his employment and obligations does not have "good reason" to effectuate terminate, then these piggyback registration rights shall terminate on the date of termination of Executive's employment. (H) All provisions of this Section 2.6 and Section 7.13. From and 3(ii) that are to be performed after expiration or termination of this Agreement shall survive the Effective Time, no holder expiration or termination of Options shall have any rights in respect of this Agreement until such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor provisions expire or terminate in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionstheir terms.

Stock Options. 2.6.1. At In accordance with the Effective Timeprovisions of the Company's 2003 Equity Incentive Plan (the "2003 Plan") and the specific authorization of the Committee (as that term is defined in the 2003 Plan), each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal Company will grant to the Options Spread Value. For any holder Executive stock options for the purchase of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between Seven Thousand Five Hundred (i7,500) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to ("Option Stock"). The effective date of such Options less grant shall be the date of the Company's initial public offering of its Common Stock (ii"IPO") and the aggregate per share exercise price with respect to such Options. The "Xxxxxx'x Stock Value" for said ISOs shall be equal to the closing price Fair Market Value (as defined in the 2003 Plan) of a share of Company the Common Stock as reported on the American Stock Exchange effective date of the grant. The options shall vest in five (5) equal annual installments, with the first annual installment vesting on the Business Day immediately prior first anniversary of the date of grant of the options. The options to the Effective Time. 2.6.2. Prior be granted pursuant to the Effective Time, the Company this paragraph are intended to qualify as incentive stock options (a"ISOs") shall take all reasonable steps necessary to make any amendments to under the terms of the 2003 Plan, to the maximum extent permitted by law and applicable regulations. Executive understands that the Committee may designate a portion of the options granted under this paragraph to be non-qualified options, if necessary to comply with applicable law and regulations related to ISOs. The options to be granted pursuant to this paragraph shall be subject to such other terms and conditions that are consistent with the 2003 Plan, as determined by the Committee in its sole discretion, and such terms and conditions shall be reflected in one or more option agreement(s) entered into between Executive and the Company pursuant to the 2003 Plan. Notwithstanding anything to the contrary contained in this Agreement or the 2003 Plan, all options to acquire Option Stock shall irrevocably vest thirty (30) calendar days prior to the scheduled consummation of a Change of Control (as defined herein by reference to the 2003 Plan). If any change(s) in the federal income tax laws materially affect tax treatment of Employee with respect to an option or the Option PlansStock, the individual Option agreements parties agree to negotiate in good faith to reach an agreement that will take advantage of, or minimize the Options that are necessary to give effect to the transactions contemplated by disadvantages of, such changes. As used in this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options."

Stock Options. 2.6.1. At a. During the Effective TimeTerm of Employment, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value Executive shall be cancelledeligible to be granted options (the "Stock Options") to purchase the Common Stock of the Company under (and therefore subject to) all terms and conditions of the Company's Stock Option Plan, without as the same may be amended from time to time and any payment future plans (the current plan and any future plans are hereinafter referred to as the "Stock Option Plan"). The number of Stock Options and terms and conditions of the Stock Options shall be determined by the Committee appointed pursuant to the Stock Option Plan, or other consideration therefor. At by the Effective TimeBoard of Directors of the Company, except as otherwise provided in Section 7.13its discretion and pursuant to the Stock Option Plan. b. Upon the execution and delivery of this Agreement and approval of the same by the Company's Board of Directors (including its relevant Board committee responsible for administration of the Stock Option Plan), all other the Company shall grant to the Executive Stock Options, whether or not vested, shall intended to be cancelled andincentive stock options under Section 422 of the Internal Revenue Code of 1986, as soon as reasonably practicable after the Effective Timeamended, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by purchase the number of shares of Company the Company's Common Stock which will constitute 100,000 shares of the Company's outstanding Common Stock provided, that this grant is subject to shareholder approval of amendments to the Company's Stock Option Plan sufficient to permit that number of incentive Stock Options to be granted to the Executive; and further provided, that the Company undertakes to seek to obtain such shareholder approval no later than at its next annual meeting of shareholders. All of the Stock Options less referred to in this paragraph (b) shall have certain characteristics: (i) the Stock Options shall vest as follows for so long as the Executive is continuously employed by the Company as its Senior Vice President and General Counsel: 16.667% of the 100,000 Stock Options shall vest on October 14, 2000, and the balance of the 100,000 Stock Options shall vest thereafter in 8.334% increments on each quarterly anniversary of that date until the entire 100,000 Stock Options have vested, in each case subject to continued employment by the Company; (ii) subject to clause (vii) below, the aggregate 100,000 Stock Options shall be exercisable from and after the date upon which the 100,000 Stock Options vest through the close of business on April 14, 2005 at an initial exercise price with respect to such Options. The "Xxxxxx'x of Twenty-Two Dollars ($22.00) per share; (iii) the Stock Value" Options shall be equal to on such other terms and conditions as may be set forth in the closing price of a share of Company Common instrument granting the Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective TimeOptions, including without limitation, the provisions concerning termination of unvested Stock Options; (iv) the option agreement shall provide that the shares of common stock underlying those Stock Options shall be registered in the first registration statement on Form S-8 or other form of registration statement filed by the Company with the Securities Exchange Commission for the purpose of registering options or other securities issued to executives or other employees of the Company in their respective capacities as executive or employees of (arather than shareholders of or investors in) the Company; (v) the option agreement shall take all reasonable steps necessary to make any amendments to include certain anti-dilution provisions customary in options granted by the Company; (vi) the Stock Options may not be hypothecated or pledged, and may not be sold, transferred or otherwise disposed of (except by exercise in accordance with the terms of the option agreement) other than through transfer by will or the laws of descent and distribution, and during the lifetime of the Executive the Stock Option PlansOptions shall be exercisable only by the Executive or, in the event of the Executive's incapacity, the individual Option agreements or Executive's legal representative; and (vii) the Stock Options that are necessary to give effect shall not be exercisable at any time unless the Executive has executed a written instrument, reasonably satisfactory to the transactions contemplated by this AgreementExecutive and to the Company evidencing (a) the Executive's investment intent and customary investment representations to substantiate compliance with applicable securities laws, and (b) the Executive's agreement that the sale, transfer, or other disposition of the shares shall take reasonable steps necessary be subject to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable applicable securities law restrictions and necessary actions to advise the holders of Options of their respective rights applicable restrictions under this Agreement and the option agreement, and that the certificates evidencing the shares shall be legended to reflect the same. c. If the Executive has fulfilled (including, without limitationor, as contemplated determined by Section 7.13the Compensation Committee of the Company's Board of Directors, in its sole discretion, substantially attained) the Executive's applicable Key Initiatives during the one year terminating on the first anniversary of the Commencement Date, or the applicable Key Initiatives during the one year period terminating on the second anniversary of the Commencement Date, or the applicable Key Initiatives during the one year period terminating on the third anniversary of the Commencement Date, then on each such anniversary on which the applicable performance goals have been so fulfilled or so determined to have been substantially attained additional Stock Options to purchase 10,000 shares of the Company's outstanding shares of Common Stock (or a potential total of 30,000 shares for all three periods in the aggregate), shall be issued to the OptionsExecutive. These Stock Options are in addition to and not in substitution for any other Stock Options granted to the Executive. These additional Stock Options shall be exercisable at the average closing trading price of the Company's common stock on the principal exchange or market on which its stock is traded for the five (5) business days ending on the date of issuance, shall be vested immediately upon grant, and shall otherwise be on substantially the same terms and conditions as the other Stock Options granted to the Executive pursuant to Section 4.4(b). Notwithstanding the foregoing, the respective Option agreements and grant of additional stock options referred to in this paragraph is subject to shareholder approval of amendments to the respective Company's Stock Option Plans, Plan sufficient to facilitate permit that number of additional incentive Stock Options to be granted to the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13)Executive. The surrender Company undertakes to seek to obtain such shareholder approval no later than at its next annual meeting of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsshareholders.

Stock Options. 2.6.1. At Effective as soon as is practicable after the Effective TimeCommencement Date, each Optionthe Executive shall be granted non-qualified options (the “Options”) to purchase 25,000 shares of common stock of Imax Corporation (the “Common Shares”), whether or not vested, that has at an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, per Common Share equal to the Fair Market Value, as defined in Imax Corporation’s Amended Stock Option Plan (the “Option Plan”). Twenty percent (20%) of the Options Spread Valueshall vest and become exercisable on each of the first five anniversary dates of the grant date. For any holder Effective on the first anniversary of Optionsthe Commencement Date, the "Options Spread Value" Executive shall be granted non-qualified options to purchase at least 15,000 Common Shares at an exercise price per Common Share equal to the Fair Market Value on that date and subject to a five year, 20% per annum vest schedule. The options granted hereunder shall be subject to the terms and conditions of the Option Plan and the stock option agreements to be entered into between the Company and the Executive as of the applicable date of grant pursuant to, with respect to such Optionsand in accordance with, the differenceterms of the Option Plan; provided, if positivehowever that any of the said options, between together with all other options granted to the Executive under Imax Corporation’s Option Plan, which are not yet exercisable shall become immediately exercisable in the event of both of (a) a change in control of the Company i.e. any person, or group of persons acting in concert, other than Xxxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxxx, acquiring greater than fifty percent (50%) of the outstanding common shares of Imax Corporation, whether by direct or indirect acquisition or as a result of a merger or reorganization and (b) the occurrence of one or more of the following: (i) the product Xxxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxxx cease to be Co-Chief Executive Officers of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less Company; (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, Executive’s termination from the Company Without Cause; (aiii) shall take all reasonable steps necessary to make any amendments to the terms diminution of the Stock Option Plans, Executive’s title and/or responsibilities;or (iv) the individual Option agreements or the Options that are necessary Executive being asked to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) relocate more than 30 miles from holders of Options to effect the cancellation of such holders' Options at the Effective Time his then current office in accordance with Section 2.6.1New York. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At Effective upon the Effective Timedate of the Employee's employment, each Option, whether or not vested, that has an exercise price the Employee shall be awarded the following options: (a) An incentive stock option issued pursuant to the Company's 1997 Stock Option Plan for such number of shares of common stock of the Company that is equal to or greater than the Xxxxxx'x quotient of $300,000 divided by the fair market value per share of the common stock of the Company on November 2, 1998 (the "Grant Date") rounded down to the nearest whole number of shares. This option shall vest in accordance with the provisions of the 1997 Stock Value Option Plan as follows: (i) one-third of the shares covered by the option may be exercised after two years; (ii) one-third of the shares covered by the option may be exercised after three years; and (iii) one-third of the shares covered by the option may be exercised after four years. The option expires after five years. The incentive stock option shall be cancelled, without any payment or other consideration therefor. At subject to all of the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after terms and provisions of the Effective Time, each holder 1997 Stock Option Plan. (b) A non-statutory stock option issued pursuant to the Company's 1997 Stock Option Plan for such number of such Options shall receive in lieu shares of such Options an amount in cash, without interest, the common stock of the Company that is equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, difference between (i) the product of the Xxxxxx'x Stock Value multiplied by 90,000 shares and the number of shares of Company Common Stock subject common stock covered by the incentive stock option granted pursuant to such Options less subsection (a) above. These options shall vest as follows: (i) after one year, 20,000 shares; (ii) after two years, the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal difference between 20,000 shares and one-third of the shares subject to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company incentive stock option granted under subsection (a) shall take all reasonable steps necessary to make any amendments above; (iii) after three years, the difference between 20,000 shares and one-third of the shares subject to the terms incentive stock option granted under subsection (a) above; (iv) after four years, the difference between 20,000 shares and one-third of the shares subject to the incentive stock option granted under subsection (a) above; and (v) after six years, the balance of the shares covered by the non-statutory stock option. The non-statutory stock option expires after six years. The non-statutory stock option shall be subject to all of the terms and provisions of the 1997 Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect Plan. (c) A stock option issued pursuant to the transactions contemplated Nichols TXEN Corporation 1998 Stock Option Plan for 10,000 sharxx xx xommon stock of Nichols TXEN Corporation. This option shall vest as follows: (i) onx-xxxxx after two years; (ii) one-third after three years; and (iii) one-third after four years. The option expires after five years. The Nichols TXEN Corporation option shall be subject to all of the xxxxx and provisions of the Nichols TXEN Corporation 1998 Stock Option Plan. The Nichols TXEN Xxxxxration option shall have an exercise price equxx xx xhe price at which the common stock of Nichols TXEN Corporation is initially offered for sale to the publix xxx xs shown on the cover of the prospectus included in the registration statement which is declared effective by the Securities and Exchange Commission. Notwithstanding the foregoing, in the event Nichols TXEN Corporation does not complete an initial public offxxxxx of its common stock within four months of the date of this Agreement, and (b) shall take reasonable steps necessary then the Company will issue to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior Employee a stock option for 10,000 shares pursuant to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Company's 1997 Stock Option PlansPlan. Such option shall have the same terms as to vesting and expiration as stated above, but the exercise price for such option shall be the fair market value per share of the Company's common stock on the date Nichols TXEN Corporation determines not to facilitate complete an initial pubxxx xxfering of the timely exercise common stock of such rights Nichols TXEN Corporation. Such option shall be subject to all thx xxxxx and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsCompany's 1997 Stock Option Plan.

Stock Options. 2.6.1Executive shall receive a stock option grant of 4,000,000 shares of Company common stock (the "Option Shares"). At The Option Shares will vest over a five (5) year period from the Effective TimeDate; provided that Executive is employed as of any vesting date and if Executive is terminated for cause, each Option, whether or not vested, all unvested stock will be forfeited and cancelled; and provided further that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value Executive shall be cancelledfully vested in any then unvested Option Shares (A) in the event of the termination of Executive's employment by the Company other than for Cause (as defined below), without any payment (B) upon the consummation of a Change in Control, or other consideration therefor(C) upon the death or disability of the Executive. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, This stock option grant shall be cancelled and, as soon as reasonably practicable after under the Effective Time, each holder Company 2002 Incentive Stock Option Plan and the parties shall enter into a separate stock option agreement reflecting the terms of such Options this stock option grant. The stock option grant shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between provide that (i) any vested options may be exercised at any time within 7 years after the product date of vesting, except that any options that vest because of an event described in (A), (B) or (C) may be exercised only during the seven (7) year period beginning on occurrence of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Optionsvesting event. The "Xxxxxx'x Stock Value" stock option grant shall be equal to further provide that, if at any time when there is not an effective Registration Statement on Form S-8 covering the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Timeoption shares, the Company shall take all reasonable determine to prepare and necessary actions file with the Securities and Exchange Commission a registration statement relating to advise an offering for its own account or the holders account of Options others under the Securities Act of their respective rights 1933 of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under this Agreement (including, without limitation, as contemplated by Section 7.13the Securities Act), the OptionsCompany provide the Executive with written notice of such determination and, if the Executive so desires, the respective Option agreements and Company will cause the respective Stock Option Plans, to facilitate registration under the timely exercise Securities Act of such rights number of option shares as the Executive shall designate. The Company shall use its best efforts to register, and obligations maintain the effectiveness of the registration, for resale all of the Option Shares granted to effectuate Executive pursuant to a Form S-8 (or any successor form) registration statement under the provisions Securities Act. Additionally, any stock options granted Executive prior to this employment agreement that are vested or being vested as of the date of this Section 2.6 and Section 7.13. From and agreement may be exercised at any time within 7 years after the Effective Timedate executive's termination for any reason. The stock option grants shall further provide that, no holder if at any time when there is not an effective Registration Statement on Form S-8 covering the option shares, the Company shall determine to prepare and file with the Securities and Exchange Commission a registration statement relating to an offering for its own account or the account of Options shall have others under the Securities Act of 1933 of any rights in respect of such Optionsits equity securities, other than to receive consideration in on Form S-4 or Form S-8 (each as promulgated under the manner described in Section 2.6.1 (except Securities Act), the Company provide the Executive with written notice of such determination and, if the Executive so desires, the Company will cause the registration under the Securities Act of such number of option shares as otherwise contemplated by Section 7.13)the Executive shall designate. The surrender Company shall use its best efforts to register, and maintain the effectiveness of the registration, for resale all of the Option Shares granted to Executive pursuant to a Form S-8 (or any Options and successor form) registration statement under the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsSecurities Act.

Stock Options. 2.6.1. At Executive hereby acknowledges and agrees that Schedule A contains a complete and accurate list of all his outstanding options or rights to purchase common stock or any other equity security or interest of the Effective Time, each Option, whether Company or not vested, that has an exercise price its subsidiaries as well as the portion thereof that is equal vested as of the Separation Date (the “Options”). Notwithstanding anything to the contrary contained in Executive’s stock option agreements, the related option plans, applicable board resolutions, written or greater than oral agreements or understandings or otherwise, all unvested Options as of the Xxxxxx'x Stock Value Separation Date shall be cancelled; provided, without any payment or other consideration therefor. At that the Effective time-based options designated on Schedule A to purchase up to a maximum of an additional 75,963 shares of common stock (the “Time-Based Options”) shall continue to vest in accordance with and subject to their existing terms and conditions until May 17, except as otherwise 2004, provided in Section 7.13that Executive remains on the Board of Directors until such date, and all other Options, whether or not vested, remaining Time-Based Options to purchase the then remaining unvested shares shall be cancelled as of May 17, 2004. Options vested as of the Separation Date or by May 17, 2004, as the case may be, shall remain exercisable in accordance with and subject to their existing terms and conditions and, if unexercised, shall expire within enumerated periods set forth in the respective option agreements or plan following termination of Executive’s service on the Board. In addition, in the event of a Change of Control or the consummation of a Corporate Transaction (as soon defined in the Company’s 2002 Stock Option Plan) prior to May 17, 2004, the vesting of all of the Time Based Options, if any, that remain unvested as reasonably practicable after of the Effective Timedate of such event shall immediately be accelerated without further action by the Company, each holder provided that Executive remains on the Board of Directors until such date. In the event Options intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), are exercised more than three (3) months following the Separation Date, such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock treated as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Timenon-qualified stock options. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At (i) Within ten (10) days after the Effective TimeDate, each Employee shall receive a qualified stock option grant (the "Option") of TWO MILLION (2,000,000) shares of VillageEDOCS' common stock, whether or not vestedno-par-value, that has with an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing bid price of a share of Company Common Stock as reported VillageEDOCS' common stock on the American Stock Exchange Over-the-Counter Bulletin Board on the Business Day immediately last trading day prior to Employee's signing this Agreement. Shares granted under Option shall vest pro rata on an annual basis over a five (5) year period from the Effective TimeDate. 2.6.2. Prior (ii) Within ten (10) days after the Effective Date, Employee shall receive a qualified stock option grant (the "Option") of TWO MILLION (2,000,000) shares of VillageEDOCS' common stock, no-par-value, with an exercise price equal to the closing bid price of VillageEDOCS' common stock on the Over-the-Counter Bulletin Board on the last trading day prior to Employee's signing this Agreement. Shares granted under Option shall vest pro rata on an annual basis over a two (2) year period from the Effective Time, Date. (iii) The Option granted and the Company shares purchased pursuant to the Options (acollectively "Option Shares") shall take all reasonable steps necessary to make any amendments be subject to the terms and conditions of the Stock Option PlansVillageEDOCS Equity Incentive Plan and the parties shall enter into a separate stock option agreement reflecting the terms of these stock option grants. In the event of a conflict between the provisions, including terms and conditions, set forth in this Agreement and the VillageEDOCS Equity Incentive Plan, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders terms of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionscontrol.

Stock Options. 2.6.1. At The Employee shall be entitled to receive five-year stock options of the Effective Time, each Option, whether or not vested, that has Company for 750,000 shares of the Company's common stock at an exercise price that of $5.00/share (the "Options"), with vesting as set forth below: Number of Options/Shares Vesting 300,000 Immediate 100,000 January 14, 2001, provided, however, such vesting shall be accelerated if the closing price of the Company's common stock on the Nasdaq National Market is equal to or greater than the Xxxxxx'x Stock Value $8.00/share for 20 consecutive trading days 150,000 January 14, 2002, provided, however, such vesting shall be cancelledaccelerated if the closing price of the Company's common stock on the Nasdaq National Market is equal to or greater than $12.00/share for 20 consecutive trading days 200,000 January 14, without 2003, provided, however, such vesting shall be accelerated if the closing price of the Company's common stock on the Nasdaq National Market is equal to or greater than $16.00/share for 20 consecutive trading days All Options must be exercised on or before the earlier of (i) January 14, 2006 or (ii) the date which is three (3) years after termination of the Employee's employment with the Company for any payment reason. Notwithstanding the foregoing, all stock options granted to the Employee above shall immediately vest in the event of any transaction in which substantially all of the assets of the Company are acquired or 50% or more of the issued and outstanding common stock of the Company is acquired by a single person, entity or group of such persons or entities. The Employee hereby acknowledges that the stock options set forth above and the shares underlying such stock options have not been registered or qualified for sale under the Securities Act of 1933, as amended (the "Act"), or any state securities law and may not be sold, hypothecated, pledged, assigned or otherwise transferred, nor will any assignee, vendee or other consideration therefor. At transferee be recognized as having an interest in such stock options or shares of stock, unless a registration statement under the Effective Time, except as otherwise provided Act and any applicable state securities laws is then in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, effect with respect to such stock options or shares of stock or the availability of an exemption from such registration is established to the satisfaction of the Company. The Employee further acknowledges that the Company must amend its Certificate of Incorporation (the "Charter Amendment") to authorize the shares underlying such Options to permit the Employee to exercise any such Options. The Company will use all commercially reasonable efforts to obtain the approval of its stockholders and take such other actions as are necessary to effect the Charter Amendment. Subject to the effectiveness of the Charter Amendment, the Company shall at all times prior to by which all such options must be exercised reserve and keep available, solely for issuance and delivery upon the exercise of such Options, the difference, if positive, between (i) the product a number of the Xxxxxx'x Stock Value multiplied by authorized shares of common stock equal to the number of shares of Company Common Stock subject to such Options less (ii) the aggregate common stock which may be purchased upon exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1In consideration of Executive's entering into and agreeing to be bound by the provisions of this Agreement, including, without limitation, the terms and conditions of Section 6, Executive shall be granted on the first day of Executive's employment hereunder, pursuant to the Company's 1997 Stock Incentive Plan (the "1997 Plan"), a non-qualified option (the "Initial Option") to purchase 100,000 shares of common stock of the Company (the "Shares"). At the Effective Time, each Option, whether or not vested, that has The Initial Option will have an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be per Share equal to the closing price of a per share of Company Common Stock as reported for the common stock on the American Stock Exchange NASDAQ National Market System on the Business Day immediately prior date of grant and the Shares underlying the Initial Option will vest over a four year period, with 25% of such Shares vesting on each anniversary of the date of grant. The Initial Option will be subject to the Effective Time. 2.6.2. Prior to provisions of the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of 1997 Plan and the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, in customary form, entered into between Executive and (b) shall take reasonable steps necessary the Company evidencing such grant. As a further inducement for Executive to obtain enter into this Agreement and contingent upon approval by shareholders of the Company at the earliest practicable date all written consents 2002 annual meeting of shareholders of the Company's 2002 Stock Incentive Plan (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13"2002 Plan"), Executive shall be granted an additional nonqualified option (the Options, "Additional Option") under the respective Option agreements and 2002 Plan to purchase an additional 900,000 Shares (the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13"Additional Shares"). The surrender Board shall fully recommend and endorse the 2002 Plan for approval by the Company's shareholders. The date of grant of the Additional Option shall be the date of approval of the 2002 Plan by shareholders of the Company. Additional Shares underlying the Additional Option shall also vest over a four-year period, with 25% of the Additional Shares vesting on each anniversary of the date of grant. The exercise price per Additional Share for the Additional Option shall be the closing price per share for the common stock on the NASDAQ National Market on the date of grant. The Additional Option shall also be evidenced by a stock option agreement in customary form and shall be subject to that agreement and the 2002 Plan. Each of the Initial Option and Additional Option shall be exercisable for a period of 10 years from the date of grant. The grant of any Options stock options other than the Initial Option and the receipt of consideration therefor in accordance with Section 2.6.1 Additional Option shall be deemed at the sole discretion of the Board or a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsduly authorized committee thereof.

Stock Options. 2.6.1. At Subject to approval by the Effective TimeBoard on May 10, each Option2016, whether Employee will be (or not vested, that has an been) granted stock options to purchase 180,000 shares of the Company’s common stock (the “Options”) at a per share exercise price that is equal to or greater than the Xxxxxx'x Stock Fair Market Value shall (as defined in the 2011 Equity Incentive Plan) of the Company’s common stock on the date of grant. The Options will be, to the maximum extent permissible, treated as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code and the rules and regulations thereunder. The Options will be cancelledgranted pursuant to and subject to the terms and conditions of the Company’s 2011 Equity Incentive Plan and will be further subject to the terms of a stock option agreement as approved by the Board setting forth the exercise price, without any payment or vesting conditions and other consideration thereforrestrictions. At One fourth of the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder total number of such Options shall receive in lieu will vest on the first anniversary of the date hereof, and one forty eighth (1/48th) of the total number of Options will vest each month over the following thirty six (36) months thereafter, so long as Employee remains employed by the Company through each such vesting date. Fifty Percent (50%) of any unvested Options an amount in cashwill vest immediately prior to, without interest, equal to the Options Spread Value. For any holder of Optionsand subject to, the "consummation of a Change in Control (as defined below) and, subject to Employee’s execution of the release of claims described in Section 4(b), any remaining unvested Options Spread Value" shall be equal to, will immediately vest if Employee’s employment is terminated by the Company without Cause (as defined below) or Employee resigns with respect to such Options, the difference, if positive, between Good Reason (as defined below) within ninety (90) days following a Change in Control. A “Change in Control” means (i) the product Company’s merger or consolidation with or into another entity such that the stockholders of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject prior to such Options less transaction do not or are not expected to own a majority of the voting stock of the surviving entity, (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to sale or other disposition of all or substantially all of the closing price assets of a share the Company, (iii) the sale or other disposition of Company Common Stock as reported on greater than 50% of the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, then-outstanding voting stock of the Company (a) shall take all reasonable steps necessary by the holders thereof to make any amendments to the terms one or more persons or entities who are not then stockholders of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1Company. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At (i) As soon as practicable following the Effective TimeDate, each the Company will grant Executive a stock option (an “Option”) to acquire 100,000 shares of the Company’s Class A Ordinary Shares, whether or not vested, that has $0.10 par value per share (“Shares”) at an exercise price that is per Share equal to or greater than the Xxxxxx'x Stock Value fair market value per Share as of the date of grant under such terms and conditions as provided for under the Company’s existing stock incentive plan (the “Plan”) which are not inconsistent with clauses (ii) and (iii) below. (ii) The Options described herein shall be cancelledgranted subject to the following terms and conditions: (A) the Options shall be granted under and subject to the Plan; (B) the exercise price per Share subject to the Options shall be equal to the fair market value per Share as of the date of grant; (C) the Options shall be vested 25% on the date of grant and as to 25% of the Shares subject thereto on each of the first three anniversaries of the date of grant; provided, without any payment or other consideration therefor. At that, the Effective TimeOptions shall cease to vest upon Executive’s termination of employment with the Employer; (D) the Options shall be exercisable for the ten (10) year period following the date of grant; provided, that, except as otherwise provided in Section 7.13herein, all other Optionsupon Executive’s termination of employment with the Employer for any reason, any unvested portion of the Options shall automatically terminate and the vested portion of the Options shall remain exercisable for 90 days after Executive’s termination of employment with the Employer; and (E) the Options shall be evidenced by, and subject to, a stock option agreement whose terms and conditions are consistent with the terms hereof. (iii) The Options shall provide that upon a termination of employment by the Employer for Cause (as defined below), the Options (whether or not vested) shall terminate. Upon a termination of employment due to Executive’s death or Disability (as defined below), shall be cancelled and, as soon as reasonably practicable after any unvested portion of the Effective Time, each holder of such Options shall receive in lieu terminate and any vested portion shall remain exercisable for the remainder of such Options an amount in cashits term. Upon a termination of employment by the Employer without Cause or by Executive for Good Reason (as defined below), without interest, equal to any unvested portion of the Options Spread Value. For any holder shall vest, and the Options (including the portion which becomes vested pursuant to this clause (iii)) shall remain exercisable for the remainder of Options, their term. (iv) Subject to Executive's continuing employment with the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported Employer on the American Stock Exchange relevant date of grant, for each year after 2011, on the Business Day immediately prior to third Nasdaq trading day following the Effective Time. 2.6.2. Prior to Company’s release of earnings results for the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms quarterly periods ended on each of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective TimeJune 30, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, grant Executive an additional Option as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations date with a Black-Scholes value of $500,000. All Options granted pursuant to effectuate the provisions of this Section 2.6 5(f)(iv) shall be subject to the same terms and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described conditions as provided in Section 2.6.1 5(f) (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsii) – (iii) above.

Stock Options. 2.6.1Executive shall be entitled to participate in employee stock plans from time to time established for the benefit of employees of the Company in accordance with the terms and conditions of such plans. At Simultaneously with the Effective Timeclosing of the consolidation of the Company, each OptionExecutive shall receive pursuant to and subject to the Company’s 2000 Incentive Plan (the “Plan”), whether or not vested, that has a stock option grant for 15,000 shares of restricted stock. The options shall be exercisable as follows: (i) 50% on the closing of the consolidation pursuant to the Company’s Registration Statement on Form S–4 at an option exercise price that is equal to or greater than of $15.00 per share and (ii) 50% on the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder six-month anniversary of such Options shall receive in lieu of such Options Closing at an amount in cash, without interest, option exercise price equal to the Options Spread Valueprice that the stock is trading on the date of grant or if there is no established market, at the fair market value of the stock as determined by the Board of Directors in its sole discretion. For any holder Executive has previously received a grant of Options, 10,000 shares of restricted stock pursuant to the "Options Spread Value" Plan which shares shall be subject to repurchase by the Company on termination of Executive’s employment for a price of $.01 per share, which repurchase option shall lapse in four nearly equal toinstallments on each of the first, second, third and fourth anniversary of the date of grant. Notwithstanding the foregoing, stock options granted to Executive shall become fully exercisable and repurchase restrictions on stock grants shall lapse in full upon (i) a Change of Control of the Company (as defined herein) or (ii) Executive’s termination of employment by Executive with respect to Good Reason or by the Company without Cause, and Executive shall have one (1) year from such Optionstermination, or remaining term of the differenceoption, if positiveearlier, between to exercise such options. Notwithstanding the foregoing, in the event this Employment Agreement is terminated by the Company without Cause, then (i) the product obligation of the Xxxxxx'x Stock Value multiplied by Company to grant stock options to the number Employee for subsequent years shall also terminate except that the stock options to be granted for the next succeeding year shall be granted as of shares of Company Common Stock subject and as a condition to such Options less the termination and (ii) the aggregate exercise price with respect Company’s right to such Options. The "Xxxxxx'x Stock Value" shall be equal repurchase the restricted stock issued pursuant to the closing price of a share of Company Common Stock Plan shall not lapse except as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior lapse of the right that would have occurred in the year subsequent to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1termination. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal Options to or greater than the Xxxxxx'x Stock Value purchase Ordinary Shares shall be cancelledgranted from time to time under such arrangements, without any payment contracts or other consideration thereforplans as approved by the Board of Directors (including the Sung Director). At Each recipient of an option to purchase Ordinary Shares under the Effective TimeCompany’s stock option plan (the “Plan”) shall enter into an option agreement with the Company. Unless otherwise expressly approved by the Board of Directors, except as otherwise provided in Section 7.13including the Sungy Director, all other Options, whether Ordinary Shares purchased upon exercise of options to purchase Ordinary Shares of the Company issued after the Closing to employees of the Company under the Plan or not vestedotherwise, shall be cancelled andsubject to standard restrictions including but not limited to right of first refusal upon transfer and market stand-off, as soon as reasonably practicable after the Effective Timeand upon exercise of such options, each holder optionee shall, if required by the Company, sign an Adoption Agreement to adopt this Agreement and the Right of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to First Refusal and Co-Sale Agreement entered into by and among the Options Spread Value. For any holder of OptionsGroup Companies, the "Options Spread Value" shall be equal to, with respect to such OptionsFounders’ BVI Holding Entity, the differenceInvestor and the Founders dated as of even date herewith. Furthermore, if positiveunless otherwise expressly approved by the Board of Directors, between (i) including the product Sungy Director, options to purchase Ordinary Shares of the Xxxxxx'x Stock Value multiplied by Company issued to employees of the number Company under the Plan or otherwise, shall also be subject to four (4) year vesting provisions as follows: twenty-five percent (25%) of the shares of Company Common Stock subject to such Options less options shall vest on the first anniversary of the issuance of such options and one forty-eighth (ii1/48th) of the aggregate exercise price with respect shares subject to such Optionsoptions shall vest monthly over the next three (3) years. Unless otherwise expressly approved by the Board of Directors, including the Sungy Director, there shall be no acceleration of the vesting of shares subject to options granted under the Plan. The "Xxxxxx'x Stock Value" Company shall be equal to have a repurchase option on any unvested shares at the closing lower of the original purchase price of a share such shares paid by such optionee and the fair market value of Company Common Stock as reported on such shares at the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, time the Company (a) shall take all reasonable steps necessary exercises its right to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3repurchase. At or prior to the Effective Time, the The Company shall take all reasonable and necessary actions to advise exercise this repurchase option unless otherwise approved by the holders Board of Options of their respective rights under this Agreement (includingDirectors, without limitation, as contemplated by Section 7.13), including the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsSungy Director.

Stock Options. 2.6.1. At Subject to approval of the Board, Executive will be granted the following stock options, each of which will be, to the extent possible under the $100,000 rule of Section 422(d) of the Internal Revenue Code of 1986, as amended (the “Code”), an “incentive stock option” (as defined in Section 422 of the Code): (i) a stock option to purchase 300,000 shares of the Company’s Common Stock (as adjusted for stock splits, stock dividends and similar events) (the “First Option”), which will vest monthly as to 1/48th of the shares subject to the First Option, so that the First Option will be fully vested four (4) years from the Effective TimeDate, each subject to Executive’s continued service to the Company through the relevant vesting dates and (ii) a stock option to purchase 400,000 shares of the Company’s Common Stock (as adjusted for stock splits, stock dividends and similar events) (the “Second Option”), whether or not vestedwhich, subject to the accelerated vesting provisions set forth herein, wxxx xxxxx vest in full on the four-year anniversary of the Effective Date, subject to Executive’s continued service to the Company through the relevant vesting dates; provided, however, that has (1) fifty percent (50%) of the shares subject to the Second Option will accelerate and vest on the earlier to occur of the filing by the Company of its first registration statement with the Securities and Exchange Commission under the Securities Act of 1933, as amended, (the “Registration Statement Filing”) or the closing of a Major Transaction (as defined below), and (2) fifty percent (50%) of the shares subject to the Second Option will accelerate and vest at the time the Company first achieves a market capitalization of $500 million (as reasonably determined by the Board prior to the date on which the Company’s Common Stock is first traded on a national stock exchange or quotation system, or if the Company’s Common Stock is so traded, then based on the closing sale price of the Company’s Common Stock on such exchange or system). The First Option and Second Option will have an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product fair market value of the Xxxxxx'x Company’s Common Stock Value multiplied on the date of grant as determined by the number of shares of Company Common Stock Board in its sole discretion and will be subject to such Options less the terms, definitions and provisions of the Company’s 1999 Stock Plan (iithe “Option Plan”) and the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, related stock option agreements by and between Executive and the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock “Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13Agreements”), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise all of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated which documents are incorporated herein by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsreference.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has The Company grants to Employee non-qualified options to purchase 300,000 shares of its common stock at an exercise price that of $2.750 per common share, which is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of the Company's publicly traded shares as of the effective date of this Agreement (the "Options"). To the extent any number of the Options are required to be subject to the vote of the Company's shareholders under applicable law, rule or regulation, such number of Options are granted subject to ratification by the Company's shareholders at its next annual shareholders' meeting. The Options shall vest in twelve equal quarterly increments over a share of Company Common Stock as reported three-year period, with the first quarterly vesting to occur on the American Stock Exchange effective date of this Agreement for that partial quarter ended March 31, 2000, the second quarterly vesting to occur on April 1, 2000, and similarly on the Business Day first day of each subsequent calendar quarter with the final quarterly vesting to occur October 1, 2002. A change of control of the Company shall not accelerate vesting of the Options, except in the event of a change of control pursuant to which the Company's stock is exchanged for the stock of another entity and the Options are not rolled-over or otherwise exchanged for similar options of such entity (with like terms and conditions). In such event all of Employee's then unvested Options shall vest and be exercisable immediately prior to the Effective Time. 2.6.2consummation of such transaction. Prior It is the intent of the parties that the Options continue to the Effective Timevest on a quarterly basis according to their terms notwithstanding a change of control, the Company (a) without being subject to loss or forfeiture by virtue of a change of control. The Option grant shall take all reasonable steps necessary to make any amendments to be evidenced by a written Option Agreement, the terms of which shall be consistent with the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by terms of this Agreement. The Company's Board of Directors, at their sole discretion, shall determine what number of additional stock options, if any, shall be granted to Employee, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1upon what terms. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1. At Employer shall grant to Officer a stock option in respect of 500,000 shares of the Effective TimeEmployer's common stock on or before June 1, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided 2000 in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to Employer's Fiscal Year 2000, such Optionsoption to become exercisable as to 166,666, the difference166,667 and 166,667 shares, if positiverespectively, between (i) the product on each of the Xxxxxx'x Stock Value multiplied by first three (3) anniversaries of the date of grant. On each June 1 thereafter during the term of this Agreement (or on such other date following the expiration of a Fiscal Year of Employer as the Compensation Committee may, from time to time, designate), Employer shall also grant to Officer stock options for such number of shares of Company Common Employer's common stock as the Compensation Committee in its sole discretion determines, taking into account Officer's and Employer's performance in each of such Fiscal Years and the competitive practices then prevailing regarding the granting of stock options, provided that any such stock option grant shall not be in an amount less than 350,000 shares of Employer's common stock. All stock options granted in accordance with this Section 4(c) shall be granted pursuant to the Countrywide Credit Industries, Inc. 1993 Stock subject to Option Plan (amended and restated as of March 27, 1996), as amended (the "1993 Plan"), or such Options less (ii) other stock option plan or plans as may be or come into effect during the aggregate term of this Agreement, shall have a per share exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price fair market value (as defined in the 1993 Plan or such other plan or plans) of a share the common stock at the time of Company Common Stock grant, and shall be subject to vesting, expiration and other provisions as reported on determined by the American Stock Exchange on the Business Day immediately prior Compensation Committee. The stock options granted pursuant to this Section shall consist of incentive stock options to the Effective Time. 2.6.2extent permitted by law or regulation. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights Any stock options granted hereunder in respect of any Fiscal Year from and after Fiscal Year 2001 shall occur not later than one hundred days following the Fiscal Year to which the grant relates. In order to qualify for any grant pursuant hereto, Officer must be employed by Employer on the last day of the fiscal year to which such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsgrant relates.

Stock Options. 2.6.1. At the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) On the product Effective Date, the Executive shall be granted non-qualified options in the forms attached hereto as Exhibits B and C for an aggregate of 1,000,000 shares of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) of the aggregate exercise price with respect to such OptionsCompany. The "Xxxxxx'x Stock Value" non-qualified stock option in the form attached hereto as Exhibit B shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments granted pursuant to the terms of the Aon Stock Option PlansIncentive Plan. The non-qualified stock option in the form attached hereto as Exhibit C shall be granted as an inducement non-qualified stock option award outside of the Aon Stock Incentive Plan. The Company will file a Form S-8 registration statement with respect to such inducement non-qualified stock option award. Such options shall vest, in the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreementaggregate, and (b) shall take reasonable steps necessary to obtain in installments of 333,334 shares at the earliest practicable date all written consents (if necessary) from holders end of Options to effect the cancellation second year beginning on the Effective Date and of such holders' Options 333,333 shares at the end of each of the third and fourth years beginning on the Effective Time Date in accordance with Section 2.6.1. 2.6.3. At or prior the terms generally applicable to option grants under the Aon Stock Incentive Plan to the Effective Time, extent not inconsistent with this Agreement. In the event of termination of the Executive’s employment by the Company without Cause pursuant to Section 4(d) hereof, or by the Executive for Good Reason pursuant to Section 4(e) hereof, such options shall take all reasonable and necessary actions continue to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor vest in accordance with Section 2.6.1 their original vesting schedules. (ii) In each calendar year after 2005 during the Employment Term, subject to the approval of the committee administering the Aon Stock Incentive Plan, the Executive shall be deemed granted annually, on the regular date for annual executive option grants, non-qualified stock options to purchase shares of Common Stock with a release Black-Scholes value (based on the same methodology as used in valuing regular 2005 option grants under the Aon Stock Incentive Plan) of any and all rights not less than $1,800,000, each such option shall vest in accordance with the holder terms generally applicable to option grants under the Aon Stock Incentive Plan; provided, however, that in the event of such Options hadtermination of the Executive’s employment by the Company without Cause pursuant to Section 4(d) hereof, or may by the Executive for Good Reason pursuant to Section 4(e) hereof, each such option shall become vested to the extent that it would have had, in respect become vested if the Executive’s employment had continued until the second anniversary of such Optionsthe date of the Executive’s termination of employment.

Stock Options. 2.6.1. At In connection with Employee’s continued employment by the Effective TimeCompany, each Option, whether or not vested, that has an exercise price that is equal to or greater than and at the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product next regularly scheduled meeting of the Xxxxxx'x Stock Value multiplied by Board of Directors or the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective TimeCompensation Committee thereof, the Company will grant Employee additional options, expected to be an option to purchase 150,000 shares of the Company’s common stock, such options to be granted at the then-current fair market value of the common stock as determined by the Board of Directors or the Compensation Committee thereof (athe “Options”). The terms, conditions and limitations of the Options will be set forth in the Company’s 2005 Stock Option Plan (the “Plan”) and in the standard form of notice of stock option grant and stock option agreement to be approved by the Board of Directors and to be entered into by Employee, such terms and conditions expected to include provisions providing that 25% of the Options shall take all reasonable steps necessary be vested at the time of grant and the remaining Options shall vest quarterly over four years, commencing on the date of grant, subject to make any amendments to acceleration in certain circumstances as further described below. The Employee acknowledges and agrees that the terms of the Stock Option Plans, stock option described above are subject to approval by the individual Option agreements Board of Directors or the Options that are necessary Compensation Committee thereof and the Employee shall have no right to give effect any such stock option until it has been granted to the transactions contemplated Employee by this Agreementthe Board of Directors or the Compensation Committee thereof. Employee shall be eligible to receive future grants of equity incentives as determined by the Board of Directors (or the compensation committee thereof) in its sole discretion. The Options shall be issued in replacement of the options previously granted to Employee pursuant to (a) an option to purchase 250,000 shares of the Company’s Common Stock on March 29, 2006 at $0.24 per share (following the 150:1 reverse stock split, now exercisable for 1,666 shares at an exercise price of CDN $36.00 per share) and (b) an option to purchase 229,944 shares of the capital stock of Targanta Therapeutics, Inc. (f/k/a PhageTech, Inc.), a Canadian corporation and subsidiary of the Company (“Targanta Quebec”), at an exercise price of $0.38 CDN (following the 150:1 reverse stock split, now exercisable for 1,532 shares at an exercise price of $57.00 CDN per share), which options the Employee shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior tender to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights for cancellation in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and exchange for the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Optionsdescribed above.

Stock Options. 2.6.1. At As of August 7, 1996, the Effective Time, each Option, whether or not vested, that has Company granted to Hope options to purchase 565,000 shares of Common Stock (pre-reverse split) at an exercise price that is equal of $2.20 per share (the "Option") under the Company's 1996 Stock Option Plan (the "Plan"). Subject to or greater than Section 422 of the Xxxxxx'x Stock Value Internal Revenue Code of 1986, as amended (the "Code"), Hope shall specify what portion of the stock options granted to Hope shall be cancelledincentive stock options and what portion shall be non-qualified stock options. The Option provides that the right to exercise with respect to the shares under option shall vest as follows: (1) for non-qualified options 50% on the date of grant of the option; an additional 25% on the first anniversary date of the date of the grant of the option; and an additional 25% on the second anniversary date of the date of the grant of the option; (2) for qualified options 33% on the date of grant of the option; an additional 34% on the first anniversary date of the date of the grant of the option; and an additional 33% on the second anniversary date of the date of the grant of the option. The Option provides that in the event of any sale of 20% or more of the Company's common stock (other than through an initial public offering), without any payment a reverse merger, significant sale of assets (not in the ordinary course of business) or a change in control (defined as a change in the voting control as it existed on the date of the execution of this Agreement) all of Hope's outstanding options shall vest immediately. Hope shall have a 10 (ten) year period in which to exercise the Option, to the extend vested, from the date of grant. In the event Hope is terminated at a time when the Company's stock is not publicly traded and such termination is for other consideration therefor. At the Effective Time, except than "Cause" (as otherwise provided defined in Section 7.133(b)), all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after Hope may "put" any shares he has obtained through the Effective Time, each holder exercise of such the foregoing Options shall receive in lieu of such Options an amount in cash, without interest, to the Company at a price equal to the Options Spread Value. For any holder then-current fair market value of Optionssuch stock, the "Options Spread Value" which amount shall be equal topaid to Hope within twenty-four (24) months, with respect to such Options, interest on any unpaid balance at the difference, if positive, between (i) prime rate as announced in the product Wall Street Journal on the date the Company purchases the stock. The fair market value shall be agreed upon by Hope and the Board of Directors of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to Company. If no such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" agreement is reached within 30 days, fair market value shall be equal as determined by a valuation firm acceptable to the closing price of a share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements Hope and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsCompany.

Stock Options. 2.6.1. At Bancorp shall grant to Executive options to purchase Fifteen Thousand (15,000) shares of its authorized but unissued common stock under Bancorp’s 2003 Stock Option Plan at the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than fair market value of the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At stock on the Effective Time, except date of grant as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between follows: (i) the product Seventy-Five Hundred (7,500) shares granted as of June 7, 2004; (ii) Seventy-Five Hundred (7,500) shares granted as of the Xxxxxx'x date of the Board meeting following stockholder approval of an amendment of the 2003 Stock Value multiplied by Option Plan to increase the number of available shares, but in no event later than the day of the 2005 Annual Stockholders Meeting as long as stockholder approval of additional shares has been granted; Bancorp and Executive agree that such options shall each be for a term of Company Common Stock subject to such Options less ten (ii10) years, and will vest in installments of twenty percent (20%) percent, at the aggregate exercise price with respect to such Optionsend of the first anniversary of the date of grant, twenty (20%) percent on the second anniversary of the date of grant, twenty (20%) on the third anniversary of the date of grant, twenty (20%) percent on the fourth anniversary of the date of grant and twenty (20%) percent on the fifth anniversary of the date of grant per year over a period of five (5) years. The "Xxxxxx'x Stock Value" shall be equal Company and Executive also agree that, to the closing price maximum extent permitted by law, the option will qualify as an “incentive stock option” within the meaning of a share Section 422 of Company Common Stock the Code, as reported on amended. It is further agreed by Executive that Bancorp shall exert its best efforts to obtain all approvals necessary for either the American Stock Exchange on the Business Day immediately prior new stock option plan or amendment to the Effective Time. 2.6.2. Prior to the Effective Time, the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the 2003 Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations Plan to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect allocation of such Optionsadditional shares. Such stock options will be granted to Executive, pursuant to the Plan and an agreement between Bancorp and Executive containing the terms set forth herein and all other than to receive consideration terms as specified in the manner described form of Stock Option Agreement approved by the Board of Directors in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender connection with their adoption of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such OptionsPlan.

Stock Options. 2.6.1. At (a) As an incentive for the Effective TimeExecutive’s future performance in improving shareholder value, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value Company shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal grant to the Options Spread Value. For any holder Executive options to purchase three hundred fifty thousand (350,000) shares of Optionsthe Company’s common stock, $0.01 par value per share (the "Options Spread Value" shall be equal to“Stock”), with respect to such Options, the difference, if positive, between (i) the product of the Xxxxxx'x Stock Value multiplied by the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to options being valued at the closing price of a share of Company Common the Stock as reported on the American effective date of the Original Agreement. The Company shall also grant to the Executive options to purchase a minimum of one hundred thousand (100,000) shares of Stock Exchange on each of the first, second, and third anniversaries of the Original Agreement. The Executive may participate in future awards of options to purchase Stock or restricted shares in a manner consistent with any stock option plan or restricted share plan adopted by the Company for its senior corporate officers. Option or restricted share grants subsequent to the foregoing initial three year period shall be based upon targets adopted annually by the Board of Directors, which targets may be derived from budgets generated by the Company’s management, and the determination as to the amount of such options or restricted shares, if any, shall be at the sole discretion of the Board of Directors. (b) The options or restricted shares provided in subparagraph (a) of this Section 3.3 shall be evidenced by a stock option agreement or restricted share grant agreement (“Stock Agreement”) between the Executive and the Company, which Stock Agreement shall provide for a vesting schedule of four (4) years, in equal parts, of the options or restricted shares granted thereunder. Notwithstanding any provisions now or hereafter existing under any stock incentive plan of the Company, all options or restricted shares granted to the Executive shall vest in full immediately upon the Termination Date except for termination of employment pursuant to Section 6.3 or Section 6.5(a) hereof, and the Executive (or his estate or legal representative, if applicable) shall thereafter have twelve (12) months from the Termination Date to exercise such options, if applicable. (c) Notwithstanding any provisions now or hereafter existing under any stock option plan or restricted share plan of the Company, in the event of a Change in Control (as hereinafter defined), all options or restricted shares provided to the Executive pursuant to Section 3.3(a) of the Original Agreement or any Stock Agreement shall be granted and shall immediately fully vest as of the date of such Change in Control with such options or restricted shares being valued at the closing price of the Company’s common stock on the Business Day immediately day prior to the Effective Timeday of the Change in Control. 2.6.2. Prior to the Effective Time, the Company (ad) shall take all reasonable steps necessary to make any amendments to the terms For purposes of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time a “Change in accordance with Section 2.6.1. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 Control” shall be deemed to exist if: (i) a release person, as defined in Sections 13(d) and 14(d) of any the Securities Exchange Act of 1934 (other than the Executive or a group including the Executive), either (A) acquires twenty percent (20%) or more of the combined voting power of the outstanding securities of the Company having the right to vote in elections of directors and all rights such acquisition shall not have been approved within sixty (60) days following such acquisition by a majority of the holder of such Options hadContinuing Directors (as hereinafter defined) then in office, or may have had(B) acquires fifty percent (50%) or more of the combined voting power of the outstanding securities of the Company having a right to vote in elections of directors; or (ii) Continuing Directors shall for any reason cease to constitute a majority of the Board of Directors of the Company; or (iii) the Company disposes of all or substantially all of the business of the Company to a party or parties other than a subsidiary or other affiliate of the Company pursuant to a partial or complete liquidation of the Company, sale of assets (including stock of a subsidiary of the Company) or otherwise; or (iv) the Board of Directors approves the Company’s consolidation or merger with or into any other person (other than a wholly-owned subsidiary of the Company), or any other person’s consolidation or merger with or into the Company, which results in respect all or part of such Optionsthe outstanding shares of Stock being changed in any way or converted into or exchanged for stock or other securities or cash or any other property. (e) For purposes of this Agreement, the term “Continuing Director” shall mean a member of the Board of Directors who either was a member of the Board of Directors on the date hereof or who subsequently became a Director of the Company and whose election, or nomination for election, was approved by a vote of at least two-thirds (2/3) of the Continuing Directors then in office.

Stock Options. 2.6.1. At (a) As of June 15, 2020 (the Effective Time, each Option, whether or not vested, that has an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options“Grant Date”), the "Options Spread Value" shall be equal to, with respect Company will grant to such Options, the difference, if positive, between (i) the product you an option to purchase 845,280 shares of the Xxxxxx'x Stock Value multiplied by Company’s common stock under the number of shares of Company Common Stock subject to such Options less Company’s 2019 Equity Incentive Plan (iithe “Equity Plan”) the aggregate exercise at a strike price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to the closing price of a share of Company Common Stock as reported the Company’s common stock on the American Stock Exchange Grant Date (the “Time-Based Option”). The Time-Based Option shall vest as follows: 25% on the Business Day first anniversary of the Grant Date and 75% in equal monthly installments over the three-year period commencing on such first anniversary, with accelerated vesting with respect to 50% of any then-unvested option shares upon the Company’s execution of a Strategic Agreement, and with accelerated vesting in full in the event of a “Change in Control” (as defined under the Equity Plan). Except as specifically provided in this Section 7, the Time-Based Option shall be granted upon the terms, and subject to the conditions, of the Equity Plan and the award agreement evidencing the grant of the Time-Based Option, as provided to senior executives of the Company generally. (b) As of the Grant Date, the Company will grant to you an option to purchase 900,000 shares of the Company’s common stock under the Equity Plan at a strike price equal to the closing price of the Company’s common stock on the Grant Date (the “Performance-Based Option”). The Performance-Based Option shall vest as follows: (i) one-third if the Company achieves a per share closing price equal to $5.00 or more during any 10-consecutive trading days after the Grant Date but before November 30, 2020, or such later date as determined by the Board (the “Reference Date”), (ii) one-third if the Company achieves a per share closing price equal to $7.50 or more during any 10-consecutive trading days after the Grant Date but before the Reference Date, and (iii) one-third if the Company achieves a per share closing price equal to $10.00 or more during any 10-consecutive trading days after the Grant Date but before the Reference Date, in each case subject to your continued employment. In the event a Change in Control occurs before the Reference Date, any unvested portion of the Performance-Based Option shall vest in accordance with the above schedule based on the Company attaining the specified stock price immediately prior to the Effective Time. 2.6.2closing of such transaction (rather than based on a 10-consecutive trading day period). Prior Except as specifically provided in this Section 7, the Performance-Based Option shall be granted upon the terms, and subject to the Effective Timeconditions, of the Equity Plan and the award agreement evidencing the grant of the Performance-Based Option, as provided to senior executives of the Company (a) shall take all reasonable steps necessary to make any amendments to the terms of the Stock Option Plans, the individual Option agreements or the Options that are necessary to give effect to the transactions contemplated by this Agreement, and (b) shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1generally. 2.6.3. At or prior to the Effective Time, the Company shall take all reasonable and necessary actions to advise the holders of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13), the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 shall be deemed a release of any and all rights the holder of such Options had, or may have had, in respect of such Options.

Stock Options. 2.6.1The Executive shall be granted options to purchase a total of 250,000 shares of the Company’s common stock (the “Option Grant”), subject to the approval of the Compensation Committee. At the Effective Time, each Option, whether or not vested, that has These Stock Options shall have a 10-year term and an exercise price that is equal to or greater than the Xxxxxx'x Stock Value shall be cancelled, without any payment or other consideration therefor. At the Effective Time, except as otherwise provided in Section 7.13, all other Options, whether or not vested, shall be cancelled and, as soon as reasonably practicable after the Effective Time, each holder of such Options shall receive in lieu of such Options an amount in cash, without interest, equal to the Options Spread Value. For any holder of Options, the "Options Spread Value" shall be equal to, with respect to such Options, the difference, if positive, between (i) the product fair market value of the Xxxxxx'x Stock Value multiplied by Company’s common stock on the number of shares of Company Common Stock subject to such Options less (ii) the aggregate exercise price with respect to such Options. The "Xxxxxx'x Stock Value" shall be equal to grant date, which is typically the closing price of a per share of Company Common Stock as reported on the American Stock Exchange on the Business Day immediately prior to the Effective Time. 2.6.2. Prior to the Effective Time, third trading day after the Company (a) publicly announces its next annual or quarterly financial results, immediately following the start of employment. The Stock Options shall take all reasonable steps necessary be granted pursuant to make any amendments and be subject to the terms of the 2006 Long Term Equity Incentive Plan (the “Plan”) and customary grant agreements. The Stock Option PlansOptions shall vest and become exercisable in equal tranches on the first, second and third anniversaries of the grant date, subject to the Executive’s continued employment with the Company on each vesting date, and further subject to accelerated vesting under the Plan, the individual Option agreements grant agreement and the terms of this Agreement; provided that in the event of the Executive’s termination by the Company without Cause, the Executive’s resignation with Good Reason or upon a Change of Control (as defined below), the Executive shall immediately be fully vested in all of the Stock Options that are necessary to give effect to and all of such Stock Options shall remain exercisable for a period of twelve (12) months following such termination. Except as provided in the transactions contemplated by preceding sentence, any unvested options shall be forfeited upon termination of this Agreement, and (b) any options that are vested but unexercised upon termination shall take reasonable steps necessary to obtain at the earliest practicable date all written consents (if necessary) from holders of Options to effect the cancellation of such holders' Options at the Effective Time in accordance with Section 2.6.1. 2.6.3. At or prior be subject to the Effective Timeterms and conditions of the Plan or, if applicable, the last sentence of Section 1.4(c) hereof. In the event that the Company shall take all reasonable and necessary actions elects from time to advise time during the holders Employment Period to award to its senior management or executives, generally, options to purchase shares of Options of their respective rights under this Agreement (including, without limitation, as contemplated by Section 7.13)the Company’s stock pursuant to any stock option plan or similar program, the Options, the respective Option agreements and the respective Stock Option Plans, to facilitate the timely exercise of such rights and obligations to effectuate the provisions of this Section 2.6 and Section 7.13. From and after the Effective Time, no holder of Options shall have any rights in respect of such Options, other than to receive consideration in the manner described in Section 2.6.1 (except as otherwise contemplated by Section 7.13). The surrender of any Options and the receipt of consideration therefor in accordance with Section 2.6.1 Executive shall be deemed entitled to participate in any such stock option plan or similar program on a release basis consistent with the participation of any and all rights other senior management or executives of the holder of such Options had, or may have had, in respect of such OptionsCompany.