Common use of Stock Options Clause in Contracts

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Schedule.

Stock Options. As of (a) The Company shall take, and Parent shall cooperate with the close of business on Company in taking, all steps to amend Company Options so that at the Reference Date: (i) 7,785,062 shares of Effective Time, each Company Option which is outstanding and unexercised immediately prior to the Effective Time shall cease to represent a right to acquire Company Common Stock were and shall be converted automatically into an option to purchase shares of Parent common stock (“Parent Common Stock”) and Parent shall assume each such Company Option (hereinafter, “Assumed Option”) subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) terms of the Company Disclosure Schedule (stock option plan or program and the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan agreement pursuant to which such Company Assumed Option was grantedis outstanding, as such stock option plan, program and/or agreement may be amended pursuant to Section 6.3(c). Notwithstanding the foregoing, (2i) the name number of the holder shares of Parent Common Stock purchasable upon exercise of such Company Option, (3) Assumed Option shall be equal to the number of shares of Company Common Stock subject to such Company Option, (4) the that were purchasable upon exercise price of such Company Option, (5) Assumed Option immediately prior to the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved Effective Time multiplied by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials Exchange Ratio (as defined in Section 2.4(bExhibit A), and rounded down to the nearest whole share, and (ii) in accordance with GAAP (as defined in Section 2.4(b)). The the per share exercise price under each such Assumed Option shall be adjusted by dividing the per share exercise price under each such Assumed Option by the Exchange Ratio, and rounding up to the nearest cent . In the case of each Company any Assumed Option that is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under (as defined in Section 422 of the Code so qualifies Code), the exercise price, the number of shares of Parent Common Stock purchasable pursuant to such Assumed Option and the per share terms and conditions of exercise price of such option shall be determined in order to comply with Section 424(a) of the Code. (b) Each of the Company and, if applicable, Parent shall take all such steps as may be required by it to cause the transactions contemplated by this Section 6.3 as they relate to, and any other dispositions of Company equity securities (including derivative securities) or acquisitions of Parent equity securities (including derivative securities) in the Merger by, each individual who is a director or officer of the Company to be exempt under Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, such steps to be taken in accordance with the No-Action Letter dated January 12, 1999, issued by the SEC to Skadden, Arps, Slate, M▇▇▇▇▇▇ & F▇▇▇ LLP. (c) Prior to the Effective Time, at the request of Parent, the Company shall: (i) take all action (including amending any and all of the Company’s existing stock option plans and program and any and all stock option agreements) that Parent determines may be necessary (under the plans pursuant to which Company Options are outstanding and otherwise) to effectuate the provisions of Section 6.3 and to ensure that, from and after the Effective Time, holders of Company Options have no rights with respect thereto other than those specifically provided in Section 6.3; (ii) cause to be prepared and cause the Board of Directors of the Company to adopt a new stock option plan having terms satisfactory to Parent in its sole discretion (the “New Stock Option was not less than Plan”); (iii) cause to be prepared and filed with the fair market value California Department of Corporations a share permit application to qualify the New Stock Option Plan and the options issuable thereunder pursuant to Section 25112 of the California Corporate Securities Law of 1968, as amended, and use its best efforts to cause the permit sought pursuant to such permit application to be issued as promptly as possible; (iv) take such other actions as Parent determines may be necessary to qualify the New Stock Option Plan and the options issuable thereunder pursuant to other applicable Blue Sky Laws; (v) to the extent permissible under applicable securities laws, cause to be granted, immediately prior to the Effective Time, options to purchase shares of Company Common Stock on the applicable date of grant. As having an exercise price and other terms satisfactory to Parent in its sole discretion to those employees of the Reference DateCompany or any Subsidiary of the Company as Parent shall determine in its sole discretion; and (vi) take all other action that may be reasonably requested by Parent to effectuate the provisions of clauses “(ii)” through “(v)” of this Section 6.3(c); provided that if the Company takes all actions required by this Section 6.3(c) (which actions shall not require the payment of any consideration other than customary fees and expenses) to cause the events described in this Section 6.3(c) to occur, there are no outstanding the failure to occur of any such event shall not constitute a breach of this Agreement. (d) Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of the Assumed Options. Parent shall file with the SEC a registration statement on Form S-8 (or authorized stock appreciationany successor form) under the Securities Act or on another appropriate form, phantom stockreasonably promptly following the Effective Time, profit participation or other similar rights or equity based awards with respect to Company other than Parent Common Stock subject to the Assumed Options and shall use commercially reasonable efforts to maintain the effectiveness of such registration statement or statements for so long as set forth in Sections 2.2(b) the Assumed Options remain outstanding and (c) of the Company Disclosure Scheduleexercisable.

Stock Options. As Prior to the Effective Time, each holder of a ------------- Company Option shall be required to elect between the close treatment of business on their Company Options under the Reference Date: provisions of either paragraph (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and paragraph (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under below. (i) Prior to the Effective Time, the Company Stock Plans. Company has made available shall take all corporate action necessary to Parent a true, complete and correct list of cause each Company Option outstanding as Option, whether vested or unvested, exercisable or unexercisable, without any action on the part of the Reference Date, and holder (other than an election to be treated under this paragraph) to be converted into the right to receive an amount in cash equal to the product of (x) (1) the particular Company Stock Plan pursuant to which such Company Option was granted, excess of $11.50 over (2) the name exercise price per Share subject to such Company Option and (y) the number of Shares subject to such Company Option, payable to the holder of such Company Option at any time during the period commencing on the date hereof and ending immediately prior to the Effective Time; provided, -------- that the Company shall be entitled to withhold from such cash payment any amounts required to be withheld by applicable law. Each Company Option to which this paragraph applies will be cancelled and shall cease to exist by virtue of such payment. (A) At the Effective Time, each Company Option, whether vested or unvested, exercisable or unexercisable, shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Option, a number of shares of Parent Company Stock equivalent to the number of Shares that could have been purchased immediately prior to the Effective Time under such Company Option multiplied by the Exchange Ratio (3without regard to any adjustment thereof and rounded up to the nearest whole number of shares of Parent Company Stock), at a price per share of Parent Company Stock (rounded up to the nearest whole cent) equal to (y) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Option divided by (z) the Exchange Ratio (without regard to any adjustment thereof); provided, however, that -------- ------- -50- in the case of any Company Option to which Section 422 of the Code applies, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. At or prior to the Effective Time, the Company shall make all necessary arrangements with respect to the Stock Plans to permit the assumption of the unexercised Company Options to which this paragraph (ii) of this Section 6.11 applies by Parent. (B) Effective at the Effective Time, Parent shall assume each Company Option to which this paragraph (ii) of this Section 6.11 applies in accordance with the terms of the Stock Plans under which it was issued and the stock option agreement by which it is evidenced. As soon as practicable after the Effective Time, Parent shall deliver to each holder of a Company Option to which paragraph (ii) of this Section 6.11 applies appropriate notices setting forth such holders' rights pursuant to the Stock Plans, and the agreements evidencing the grants of such Company Options shall continue in effect on the same terms and conditions (subject to the conversion required by this Section 6.11 after giving effect to the Merger and the assumption by Parent as set forth above). To the extent necessary to effectuate the provisions of this Section 6.11, Parent may deliver new or amended agreements reflecting the terms of each Company Option assumed by Parent. (C) At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Options assumed by it in accordance with this Section 6.11. Promptly, but in no event later than three business days after the Effective Time, Parent shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor or other appropriate forms), or another appropriate form, or shall cause such Company Option to be deemed an option issued pursuant to a Parent Stock Plan for which shares of Parent Common Stock have been previously registered pursuant to an appropriate registration form, with respect to the Parent Common Stock subject to such Company OptionOptions, (4) and shall use its best efforts to maintain the exercise price effectiveness of such Company Option, registration statements (5and maintain the current status of the prospectus or prospectuses contained therein) the date on which for so long as such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleremain outstanding.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 At the Effective Time, each Company Option whether vested or unvested, without any action on the part of the holder, shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Option, a number of shares of Company Parent Common Stock were equivalent to (x) the number of Shares that could have been purchased immediately prior to the Effective Time under such Company Option multiplied by (y) the Exchange Ratio (rounded down to the nearest whole number), at a price per share of Parent Common Stock (rounded up to the nearest whole cent) equal to the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Option divided by the number of shares of Parent Common Stock determined above; provided, however, that the foregoing provisions shall be subject to issuance such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code in the case of any Company Option to which Section 422 of the Code applies. At or prior to the Effective Time, the Company shall make all necessary arrangements with respect to the Company Stock Plans to permit the assumption of the unexercised Company Options by Parent pursuant to outstanding this Section. (ii) Effective at the Effective Time, Parent shall assume each Company Option in accordance with the terms of the relevant Company Stock Plan under which it was issued and the stock option agreement by which it is evidenced. At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Options and payment of Vested Stock Units (as defined below) assumed by it in accordance with this Section. At the Effective Time, all vested stock units allocated to purchase Company Common Stock each director's account under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) Company's Amended and Restated 1993 Stock Plan for Non-Employee Directors ("Vested Stock Units"), without any action on the part of the Company Disclosure Schedule (director, shall be paid, on the “Company Stock Plans”) (equity or other equity-based awardssame terms and conditions as are applicable under such plan, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Parent Common Stock equal to the number of Vested Stock Units allocated to the director's account in such plan multiplied by the Exchange Ratio (rounded down to the nearest whole number). As soon as practicable, and in no event later than 10 days after the Effective Time, Parent shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor or other appropriate forms), or another appropriate form (or shall cause such Company Option or Vested Stock Unit to be deemed to be issued pursuant to a Parent Stock Plan for which shares of Parent Common Stock have previously been registered pursuant to an appropriate registration form) with respect to the Parent Common Stock subject to such Company OptionOptions or payable pursuant to such Vested Stock Unit, (4) and shall use its best efforts to maintain the exercise price effectiveness of such Company Option, registration statements (5and maintain the current status of the prospectus or prospectuses contained therein) the date on which for so long as such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleremain outstanding.

Stock Options. As (a) Immediately prior to the Effective Time, each outstanding employee stock option (an "OPTION") to purchase Shares granted under any employee stock option or compensation plan or arrangement of the close Company shall be canceled, and each holder of business on any such Option, whether or not then vested or exercisable, shall be paid by the Reference Date: Company at the Effective Time for each such Option an amount determined by multiplying (i) 7,785,062 shares the excess, if any, of Company the Merger Consideration per Share over the applicable exercise price of such Option by (ii) the number of Shares such holder could have purchased (assuming full vesting of all Options) had such holder exercised such option in full immediately prior to the Effective Time (the "OPTION CONSIDERATION"). (b) The consideration due under this Section 3.05 shall be payable without interest after (a) verification by the Depositary of the ownership and terms of the particular Option by reference to the Company's records and (b) delivery in the manner provided in Section 3.03 of a written instrument duly executed by the owner of the Option, in a form to be provided by the Depositary promptly after the Effective Time, setting forth (i) the aggregate number of Shares of Common Stock were subject to issuance acquirable by such Option holder upon exercise of all Options held by such holder whether or not such Options are immediately exercisable, the respective issue dates of each Option and the exercise price of each Option; (ii) a representation by the person that he or she is the owner of all Options described pursuant to outstanding Company clause (a), and that none of those Options has expired or ceased to be exercisable; and (as defined belowiii) a consent to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth treatment of such Options pursuant to this Section 3.05 in Section 2.12(bfull satisfaction of all rights relating to such Options. (c) of Prior to the Effective Time, the Company Disclosure Schedule shall (the “Company Stock Plans”i) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant use its best efforts to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), obtain any consents from holders of Options and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available make any amendments to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of such stock option or compensation plans or arrangements, to the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on extent such consents or amendments are necessary to give effect to the Company Financials (as defined in transactions contemplated by Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)3.05(a). The exercise price Notwithstanding any other provision of each Company this Section, payment may be withheld in respect of any Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there until necessary consents are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleobtained.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to At the Effective Time, each outstanding Company Options (as defined below) option to purchase Company Common Stock Shares (a "Company Option") under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than whether vested or unvested, shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Restricted Stock or Option, after giving effect to any provision requiring the vesting of any Company Restricted Stock UnitsOption as a result of the transactions contemplated by this Agreement, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 the same number of shares of Company SBC Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option would have been entitled to receive pursuant to the Merger had such holder exercised such Company Option in full immediately prior to the Effective Time (rounded down to the nearest whole number) (a "Substitute Option"), at an exercise price per share (3rounded up to the nearest whole cent) equal to (y) the aggregate exercise price for the Company Shares otherwise purchasable pursuant to such Company Option divided by (z) the number of full shares of Company SBC Common Stock subject deemed purchasable pursuant to such Company OptionOption in accordance with the foregoing. At or prior to the Effective Time, the Company shall make all necessary arrangements with respect to the Stock Plans, including any necessary amendments thereto, to permit the assumption of the unexercised Company Options by SBC pursuant to this Section and no later than five business days after the Effective Time SBC shall register under the Securities Act of 1933 on Form S-8 or other appropriate form (4and use its best efforts to maintain the effectiveness thereof) shares of SBC Common Stock issuable pursuant to all Substitute Options. As promptly as practicable after the exercise price of Effective Time, the Company shall deliver to the participants in the Stock Plans appropriate notices setting forth such participants' rights pursuant to such assumed Company OptionOptions. (ii) Effective at the Effective Time, (5) the date on which such SBC shall assume each Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance accordance with the terms of the applicable Company Benefit Stock Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies which it was issued and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleoption agreement by which it is evidenced.

Stock Options. As (a) Subject to the terms of this Agreement, at the Effective Time, each Company Option that is outstanding as of immediately prior to the Effective Time, whether vested or unvested, and that has not been exercised prior to the Effective Time shall be cancelled and the holder thereof shall be entitled to receive in full satisfaction of the close rights of business on the Reference Date: such holder with respect thereto: (i) 7,785,062 shares a number of Parent Shares equal to the product obtained by multiplying (i) the aggregate number of Company Common Stock were Shares subject to issuance pursuant such Company Option as of immediately prior to outstanding the Effective Time (the “Underlying Company Shares”) by (ii) the sum of (A) the Per Share Stock Participation less (B) the quotient obtained by dividing (I) the exercise price per Underlying Company Share (the “Option Exercise Price”) by (II) the Parent Stock Price; provided, however, in no event shall such number of Parent Shares be less than zero (0); provided, further, that the Option Exercise Price shall be reduced by application of this Section 1.12(a)(i) by the cash value of the Per Share Stock Participation (as determined based on the Parent Stock Price), with any positive remainder of the Option Exercise Price after such reduction being referred to herein as the “Remaining Exercise Price”; (ii) an amount in cash equal to the product obtained by multiplying (i) the Underlying Company Shares by (ii) the sum of (A) the Per Share Cash Participation less (B) the Remaining Exercise Price per Underlying Company Share (if any) following the application of Section 1.12(a)(i); and (iii) an amount of cash equal to the product obtained by multiplying (i) the Underlying Company Shares by (ii) the sum of (A) the Contingent Per Share Participation Cash plus (B) the Contingent Per Common Share Cash plus (C) the Contingent Per Share Cash, if and when payable (such amount, an “Option Contingent Payment”). The parties agree that any payment of the Option Contingent Payment, if any, payable with respect to Company Options (will be treated and reported for all tax purposes as defined belowbeing subject to a substantial risk of forfeiture within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to purchase Company Common Stock until such amounts become due and payable under the applicable Agreement and shall be paid to the holders of Company Benefit Plans that are stock plans Options entitled to such payments within the short-term deferral period within the meaning of Treasury Regulation Section 1.409A-1(b)(4). (b) At or prior to the Effective Time, the Company’s board of directors shall adopt appropriate resolutions, and take all other actions necessary (including, but not limited to, obtaining the written consent of each Company Optionholder regarding the treatment of Company Options set forth in this Section 1.12), to effectuate the provisions of this Section 1.12. As a condition to the right of a holder of Company Options to receive the consideration set forth in this Section 1.12, such holder shall have executed and delivered to Parent (i) a consent in a form reasonably requested by Parent, consenting to and acknowledging the treatment of the Company Options as set forth in Section 2.12(b) of the Company Disclosure Schedule 1.12 (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company OptionsOption Consent”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available with respect to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the any holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board holding greater than one-fourth of Directors of Company one percent (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c0.25%) of the Company Disclosure ScheduleFully Diluted Capital Number, a Joinder Agreement, (iii) a copy of, or joinder agreement in a form reasonably satisfactory to Sorrento to, the Exchange Agreement and (iv) an Investor Questionnaire.

Stock Options. As (a) Effective as of the close of business on the Reference Distribution Date: , each L Brands Option (iwhether vested or unvested) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option is outstanding as of immediately prior to the Reference Distribution Date and held by a VS Participant who is not a Former VS Employee shall be converted into an option to acquire VS Common Stock (each, a “VS Option”) and shall be subject to the same terms and conditions (including vesting) as applicable to the corresponding L Brands Option as of immediately prior to the Distribution Date; provided, that from and after the Distribution Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company VS Common Stock subject to, and the exercise price per share of, such VS Option shall be determined by the L Brands Compensation Committee in a manner consistent with Section 409A of the Code and intended to preserve (and without enlarging) the value of such Company Option, L Brands Option by taking into account (4i) the exercise price per share of such Company Option, L Brands Option and (5ii) the date on which such Company relative values of the L Brands Pre-Distribution Stock Value and the VS Stock Value. (b) Effective as of the Distribution Date, each L Brands Option was granted, (6whether vested or unvested) that is outstanding as of immediately prior to the applicable vesting scheduleDistribution Date and held by an L Brands Participant or a Former VS Employee shall be adjusted to reflect the Distribution and become an Adjusted L Brands Option. The number of shares of L Brands Common Stock subject to, and the extent exercise price per share of, such Adjusted L Brands Option shall be determined by the L Brands Compensation Committee in a manner consistent with Section 409A of the Code and intended to which preserve (and without enlarging) the value of such Company L Brands Option was vested by taking into account (i) the exercise price per share of such L Brands Option and exercisable (ii) the relative values of the L Brands Pre-Distribution Stock Value and the L Brands Post-Distribution Stock Value. Each such Adjusted L Brands Option shall be subject to the same terms and conditions (including vesting) as applicable to the corresponding L Brands Option as of immediately prior to the Reference Distribution Date. (c) Notwithstanding anything to the contrary in this Section 8.03, the exercise price, the number of shares of L Brands Common Stock or VS Common Stock, as applicable, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified of exercise applicable to any Adjusted L Brands Option or VS Option, as the case may be, shall be determined in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance manner consistent with the terms requirements of Section 409A of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleCode.

Stock Options. As of (a) Subject to Sections 5.5(b), at the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject Effective Time, all rights with respect to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under each Company Option then outstanding shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each such Company Option in accordance with the applicable Company Benefit Plans that are stock plans terms and conditions (as set forth in Section 2.12(beffect as of the date of this Agreement) of the stock option plan under which it was issued and the terms and conditions of the stock option agreement by which it is evidenced. From and after the Effective Time, (i) each Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awardsOption assumed by Parent may be exercised solely for shares of Parent Common Stock, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 the number of shares of Company Parent Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available subject to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) shall be equal to the number of shares of Company Common Stock subject to such Company OptionOption immediately prior to the Effective Time multiplied by the Exchange Ratio, rounding down to the nearest whole share, (4iii) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price under each such Company Option shall be adjusted by dividing the per share exercise price under such Company Option by the Exchange Ratio and rounding up to the nearest cent, and (iv) any restriction on the exercise of any such Company Option shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Company Option shall otherwise remain unchanged; provided, however, that each Company Option was not less than assumed by Parent in accordance with this Section 5.5(a) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock split, stock dividend, reverse stock split, reclassification, recapitalization or other similar transaction effected subsequent to the fair market value Effective Time. (b) Notwithstanding anything to the contrary contained in this Section 5.5, in lieu of a share assuming outstanding Company Options in accordance with Section 5.5(a), Parent may, with the consent of each optionholder with respect to such optionholders options, cause such outstanding Company Options to be replaced by issuing reasonably equivalent replacement stock options in substitution therefor. (c) Prior to the Effective Time, the Company shall take all action that may be necessary (under the plans pursuant to which Company Options are outstanding and otherwise) to effectuate the provisions of this Section 5.5 and to ensure that, from and after the Effective Time, holders of Company Options have no rights with respect thereto other than those specifically provided in this Section 5.5. (d) Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery under the Company Options Plans assumed in accordance with this Section 5.5. (e) As soon as practicable after the Effective Time, Parent shall deliver to the participants in the Company's Option Plans appropriate notice setting forth such participant's rights pursuant thereto and the grants pursuant to the Company's Option Plans shall continue in effect on the applicable date of grant. same terms and conditions (subject to the adjustments required by this Section 5.5 after giving effect to the Merger) (f) As of the Reference DateEffective Time, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar the Company ESPP shall be terminated. The rights or equity based awards of participants in the Company ESPP with respect to any offering period then underway under the Company ESPP shall be determined by treating the last business day prior to the Effective Time as the last day of such offering period and by making such other than pro-rata adjustments as set forth in Sections 2.2(b) may be necessary to reflect the shortened offering period but otherwise treating such shortened offering period as a fully effective and completed offering period for all purposes under the Company ESPP. Prior to the Effective Time, the Company shall take all actions (c) including, if appropriate, amending the terms of the Company Disclosure ScheduleESPP) that are necessary to give effect to the transactions contemplated by this Section 5.5(f).

Stock Options. Prior to the Effective Time, the Company shall take all actions necessary to provide, effective as of the Effective Time, for the cancellation, on the terms and conditions set forth in this Section 1.09(a) and without any payment therefor except as otherwise provided in this Section 1.09(a), of all Stock Options held by the Principal Stockholder that are outstanding at the Effective Time (whether or not then exercisable) (each such Stock Option being, an “Affiliate Stock Option“). As of the close Effective Time, each Affiliate Stock Option (whether vested or unvested) shall be cancelled (and to the extent formerly so exercisable shall no longer be exercisable) and shall entitle each holder thereof, in cancellation and settlement therefor, to receive a number of business on shares of Class A Stock, as of the Reference Date: Effective Time, determined by dividing (i) 7,785,062 the product of (A) the amount, if any, by which the Merger Consideration exceeds the exercise price per share with respect to such Affiliate Stock Options, and (B) the total number of shares of Company Common Stock were subject to issuance pursuant to outstanding Company then issuable upon the exercise of such Affiliate Stock Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity whether or other equity-based awards, whether payable in cash, shares not then vested or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”exercisable), and by (ii) 7,748,679 the Merger Consideration; provided, that the obligations of the Principal Stockholder in respect of any withholding taxes due upon receipt of the shares of Company Common Class A Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2this Section 1.09(a) the name of the holder of such Company Option, (3) shall be satisfied by reducing the number of shares of Company Common Class A Stock subject otherwise deliverable pursuant to such Company Option, this Section 1.09(a) by a number of shares of Class A Stock determined by dividing (4i) the exercise price minimum statutory amount that the Company is required to withhold upon the delivery of such Company Optionshares of Class A Stock pursuant to this Section 1.09(a), by (5ii) the date on which such Company Option was granted, (6) the applicable vesting scheduleMerger Consideration, and the extent Company shall remit all amounts that the Company is required to which such Company Option was vested and exercisable as withhold upon the delivery of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Class A Stock subject pursuant to issuance under this Section 1.09(a) to the applicable Company Benefit Plans, upon issuance on the terms and conditions specified taxing authorities in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessablea timely manner. All grants Any shares of Company Options were validly issued and properly approved by the Board Class A Stock delivered in respect of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) any Affiliate Stock Option in accordance with GAAP (as defined this Section 1.09(a) shall be deemed to be Excluded Shares and shall be cancelled at the Effective Time in accordance with Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Schedule1.07.

Stock Options. As of (a) At the close of business on Effective Time, each option granted by the Reference Date: (i) 7,785,062 Company to purchase shares of Company Common Stock were (each a “Company Option”) which was granted pursuant to any stock option plan, program or arrangement of the Company as set forth on Section 3.2 the Company Disclosure Letter (collectively, the “Company Option Plans”), that is outstanding and unexercised immediately prior to the Effective Time shall cease to represent a right to acquire share of Company Common Stock, and Parent shall assume each such Company Option (hereafter, “Assumed Option”) subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the terms of the applicable Company Benefit Plans Option Plan and the agreement evidencing the grant thereunder of such Assumed Option; provided, however, that are stock plans as set forth in Section 2.12(bthe (i) the number of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Parent Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which purchaseable upon such Company Option was granted, (2) the name of the holder exercise of such Company Option, (3) Assumed Option shall be equal to the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which that were purchasable under such Company Option was grantedimmediately prior to the Effective Time multiplied by the Exchange Ratio, and rounded to the nearest whole share, and (6ii) the applicable vesting schedule, and per share exercise price under such Assumed Option shall be adjusted by dividing the extent to which per share exercise price under such Company Option was vested by the Exchange Ratio, and exercisable as of rounding to the Reference Datenearest whole cent, and (7iii) such Assumed Option shall not terminate if the date on which such Company Option expires. All shares of Company Common Stock subject holder ceases to issuance under the applicable Company Benefit Plansbe a director, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (officer or a duly authorized committee employee or subcommittee thereof) in material compliance with the terms consultant of the applicable Company Benefit Plan Surviving Corporation or any of its affiliates (including Parent and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)its Subsidiaries). The exercise price In the case of each Company any Assumed Option that is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under (as defined in Section 422 of the Code so qualifies Code), the exercise price, the number of shares of Parent Common Stock purchasable pursuant to such Assumed Option and the per share terms and conditions of exercise price of each Company Option was not less than such option shall be determined in order to comply, to the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Datefullest extent possible, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (cSection 424(a) of the Company Disclosure ScheduleCode. Prior to the Effective Time, Parent shall prepare and file with the SEC a registration statement on Form S-8 (or other appropriate form) registering all the shares of Parent Common Stock subject to the Assumed Options, and such registration statement shall be kept effective (and the current status of the prospectus or prospectuses required thereby shall be maintained) as long as any Assumed Option remains outstanding.

Stock Options. As of At the close of business on the Reference Date: (i) 7,785,062 Effective Time, each option or other right to purchase shares of Company Common Stock were subject to issuance pursuant to outstanding stock options (a "COMPANY OPTION"), whether granted by the Company Options (as defined below) to purchase Company Common Stock under the applicable 1999 Stock Option Plan (the "COMPANY OPTION PLAN") or any other plan or agreement, which is outstanding at the Effective Time, whether or not exercisable, shall be assumed by Parent and become rights with respect to Parent Stock ("PARENT OPTIONS"), the Company Benefit Plans that are stock plans as set forth Option Plan or any such other plan or agreement which is outstanding at the Effective Time shall be assumed by Parent, and Parent shall assume each Option, in Section 2.12(b) accordance with the terms of the Company Disclosure Schedule Option Plan and stock option agreement by which it is evidenced, except that from and after the Effective Time, (the “Company Stock Plans”i) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to Parent and its Compensation Committee shall be substituted for the Company Stock Plansand the Committee of the Company's Board of Directors (including, other than Company Restricted Stock or Company Restricted Stock Unitsif applicable, are referred to in this Agreement as “Company Options”)the entire Board of Directors of the Company) administering such Option Plan, and (ii) 7,748,679 each Option assumed by Parent may be exercised solely for shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was grantedStock, (2) the name of the holder of such Company Option, (3iii) the number of shares of Company Common Parent Stock subject to such Option shall be equal to the number of Company OptionShares subject to such Option immediately prior to the Effective Time multiplied by the Conversion Ratio, (4iv) the per share exercise price under each such Option shall be adjusted by dividing the per share exercise price under each such Option by the Conversion Ratio and rounding up any fraction of such Company Option, a cent to the nearest cent and (5v) all Parent Options resulting from the date on which such assumption of the Company Option was granted, (6) the applicable vesting schedule, and Plan pursuant to this Section 3.10 shall be fully exercisable to the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under set forth in the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Option or Company Options were validly issued and properly approved Option Plan or as stipulated by the Company's Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of pursuant to the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on Option Plan. Notwithstanding the Company Financials provisions of clause (as defined in Section 2.4(b)iii) in accordance of the preceding sentence, Parent shall not be obligated to assume option obligations with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value respect to any fraction of a share of Company Common Parent Stock as determined on upon exercise of a Parent Option and any fraction of a share of Parent Stock that otherwise would be subject to a Parent Option shall represent the date of grant right to receive a cash payment upon exercise of such Company Option. Each Company Parent Option intended equal to qualify as an “incentive stock option” under Section 422 the product of such fraction and the Code so qualifies difference between the market value of one share of Parent Stock at the time of exercise and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grantsuch Option. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) Each of the Company Disclosure Scheduleand Parent agrees to take all necessary steps to effectuate the foregoing provisions of this Section 3.10, including using its reasonable efforts to obtain from each holder of an Option any consent or contract that may be deemed necessary or advisable in order to effect the transactions contemplated by this Section 3.10.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 The Company has reserved 1,066,824 shares of Company Common Stock were subject to for issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, of which options with respect to 953,281 shares are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Datedate of this Agreement. Section 2.2(b) of the Disclosure Schedule accurately sets forth, and with respect to each Option that is outstanding as of the date of this Agreement: (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2i) the name of the holder of such Company Option, Option and whether such holder is an employee or non-employee; (3ii) the total number of shares of Common Stock that are subject to such Option and the number of shares of Company Common Stock subject with respect to which such Company Option, Option is immediately exercisable; (4) the exercise price of such Company Option, (5iii) the date on which such Company Option was granted, granted and the term of such Option; (6iv) the applicable vesting schedule, schedule for such Option and whether the extent vesting of such Option shall be subject to which any acceleration in connection with the Merger or any of the other transactions contemplated by this Agreement; (v) the exercise price per share of Common Stock purchasable under such Company Option; and (vi) whether such Option is an “incentive stock option” as defined in Section 422 of the Code or subject to Section 409A of the Code. Each grant of an Option was vested and exercisable as of the Reference Date, and (7) duly authorized no later than the date on which the grant of such Company Option expires. All shares of Company Common Stock subject was by its terms to issuance under be effective (the applicable Company Benefit Plans“Grant Date”) by all necessary corporate action, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuedincluding, are duly authorized and will be validly issuedas applicable, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved approval by the Board board of Directors directors of the Company (or a duly constituted and authorized committee or subcommittee thereof) and any required stockholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto, each such grant was made in material compliance with the terms of the applicable compensation plan or arrangement of the Company Benefit Plan and all other applicable Legal Requirements and recorded on Requirements, the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The per share exercise price of each Company Option is not less was equal to or greater than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference DateGrant Date and, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than except as set forth in Sections Section 2.2(b) and of the Disclosure Schedule, each such grant was properly accounted for in accordance with GAAP in the financial statements (cincluding the related notes) of the Company Disclosure Scheduleand each Option qualifies for the Tax treatment afforded to such Option in the Tax Returns of the Company. All options with respect to shares of Common Stock that were ever issued by the Company ceased to vest on the date on which the holder thereof ceased to be an employee of or a consultant to the Company. The exercise of the Options and the payment of cash in respect thereof complied and will comply with the terms of the Stock Plans, all Contracts applicable to such Options and all applicable Legal Requirements and, as of the Effective Time, no former holder of an Option will have any rights with respect to such Option other than the rights contemplated by Section 1.6(a). The Company has delivered to Parent accurate and complete copies of the Stock Plans, each form of agreement used thereunder and each Contract pursuant to which any Option is outstanding.

Stock Options. As of the close of business on the Reference Date: (ia) 7,785,062 Each option to purchase shares of Company Common Stock were subject to issuance pursuant to that is outstanding at the Effective Time, whether or not exercisable and whether or not vested (a "Company Options (as defined below) to purchase Company Common Stock under Option"), shall, without any action on the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) part of the Company Disclosure Schedule or the holder thereof, be assumed by Parent in such manner that Parent (i) is a corporation "assuming a stock option in a transaction to which Section 424(a) applies" within the “Company Stock Plans”) (equity meaning of Section 424 of the Code and the regulations thereunder or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under to the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as extent that Section 424 of the Reference Date, and (1) the particular Company Stock Plan pursuant Code does not apply to which such Company Option was granted, (2) the name of the holder of any such Company Option, would be such a corporation were Section 424 of the Code applicable to such Company Option. From and after the Effective Time, all references to the Company in the Company Options shall be deemed to refer to Parent. The Company Options assumed by Parent shall be exercisable upon the same terms and conditions as under the Company Options (3including provisions regarding vesting and the acceleration thereof) except that (i) such Company Options shall entitle the holder to purchase from Parent the number of shares of Parent Common Stock (rounded down to the nearest whole number of such shares) that equals the product of the Conversion Ratio multiplied by the number of shares of Company Common Stock subject to such Company OptionOption immediately prior to the Effective Time, (4ii) the option exercise price per share of such Company Option, Parent Common Stock shall be an amount (5rounded up to the nearest full cent) equal to the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares option exercise price per share of Company Common Stock subject in effect immediately prior to issuance under the applicable Effective Time divided by the Conversion Ratio, and (iii) the Company Benefit Plans, upon issuance on Options shall vest to the terms and conditions specified in the instruments extent required pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants the current terms of such Company Options or other agreements as described in Section 1.7 of the Company Disclosure Schedule (as defined below); provided that if such vesting of Company Options were validly issued and properly approved by or other provisions with respect to the Company Options would jeopardize the Merger being accounted for as a "pooling of interests," then the Company shall, subject to Parent's written consent not to be unreasonably withheld, use reasonable best efforts to prevent such vesting or effect of other provisions. Except to the extent required pursuant to the current terms of such Company Options or other agreements as described in Section 1.7 of the Company Disclosure Schedule, the Company shall not take any action to accelerate the vesting of any Company Options. Prior to the Effective Time, the Board of Directors of Parent shall, for purposes of Rule 16b-3(d)(1) promulgated under Section 16 of the Securities Exchange Act of 1934, and the rules and regulations thereunder (the "1934 Act"), specifically approve (i) the assumption by Parent of the Company Options and (ii) the issuance of Parent Common Stock in the Merger to directors, officers and stockholders of the Company subject to Section 16 of the 1934 Act. (b) As promptly as practicable after the Effective Time, Parent shall issue to each holder of a Company Option a written instrument informing such holder of the assumption by Parent of such Company Option. As soon as reasonably practicable after the Effective Time (and in any event no later than five business days after the Effective Time, provided current option information required therefor is delivered to Parent at the Effective Time), Parent shall file a registration statement on Form S-8 (or any successor form) with respect to the shares of Parent Common Stock subject to Company Options and shall use commercially reasonable efforts to maintain such registration statement (or any successor form), including the current status of any related prospectus or prospectuses, for so long as the Company Options remain outstanding. In addition, Parent shall use commercially reasonable efforts to cause the shares of Parent Common Stock subject to Company Options to be listed on the NYSE and such other exchanges as Parent shall determine. Parent shall take all corporate action necessary to reserve for issuance a duly authorized committee or subcommittee thereof) sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Options pursuant to the terms set forth in material compliance this Section 1.7. Parent shall comply with the terms of the applicable Company Benefit Option Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)3.3) in accordance with GAAP (and use commercially reasonable efforts to cause those Company Options that qualified as defined in Section 2.4(b)). The exercise price of each Company Option is not less than incentive stock options prior to the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended Effective Time to continue to qualify as an “incentive stock option” under Section 422 of options immediately after the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleEffective Time.

Stock Options. As of At the close of business on the Reference Date: (i) 7,785,062 Effective Time, each option or other right to ------------- purchase shares of Company Common Stock were subject to issuance pursuant to outstanding stock options (a "Company Options (as defined below) to purchase Option"), whether granted by the Company Common Stock under the applicable 1999 Stock Option Plan (the "Company Benefit Plans that are stock plans as set forth Option Plan") or any other plan or agreement, which is outstanding at the Effective Time, whether or not exercisable, shall be assumed by Parent and become rights with respect to Parent Stock ("Parent Options"), the Company Option Plan or any such other plan or agreement which is outstanding at the Effective Time shall be assumed by Parent, and Parent shall assume each Option, in Section 2.12(b) accordance with the terms of the Company Disclosure Schedule Option Plan and stock option agreement by which it is evidenced, except that from and after the Effective Time, (the “Company Stock Plans”i) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to Parent and its Compensation Committee shall be substituted for the Company Stock Plansand the Committee of the Company's Board of Directors (including, other than Company Restricted Stock or Company Restricted Stock Unitsif applicable, are referred to in this Agreement as “Company Options”)the entire Board of Directors of the Company) administering such Option Plan, and (ii) 7,748,679 each Option assumed by Parent may be exercised solely for shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was grantedStock, (2) the name of the holder of such Company Option, (3iii) the number of shares of Company Common Parent Stock subject to such Option shall be equal to the number of Company OptionShares subject to such Option immediately prior to the Effective Time multiplied by the Conversion Ratio, (4iv) the per share exercise price under each such Option shall be adjusted by dividing the per share exercise price under each such Option by the Conversion Ratio and rounding up any fraction of such Company Option, a cent to the nearest cent and (5v) all Parent Options resulting from the date on which such assumption of the Company Option was granted, (6) the applicable vesting schedule, and Plan pursuant to this Section 3.10 shall be fully exercisable to the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under set forth in the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Option or Company Options were validly issued and properly approved Option Plan or as stipulated by the Company's Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of pursuant to the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on Option Plan. Notwithstanding the Company Financials provisions of clause (as defined in Section 2.4(b)iii) in accordance of the preceding sentence, Parent shall not be obligated to assume option obligations with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value respect to any fraction of a share of Company Common Parent Stock as determined on upon exercise of a Parent Option and any fraction of a share of Parent Stock that otherwise would be subject to a Parent Option shall represent the date of grant right to receive a cash payment upon exercise of such Company Option. Each Company Parent Option intended equal to qualify as an “incentive stock option” under Section 422 the product of such fraction and the Code so qualifies difference between the market value of one share of Parent Stock at the time of exercise and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grantsuch Option. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) Each of the Company Disclosure Scheduleand Parent agrees to take all necessary steps to effectuate the foregoing provisions of this Section 3.10, including using its reasonable efforts to obtain from each holder of an Option any consent or contract that may be deemed necessary or advisable in order to effect the transactions contemplated by this Section 3.10.

Stock Options. As (a) The Company hereby issues to Matthews an option (the "Option") to ▇▇▇▇▇▇▇ up to Two Million (2,000,000) additional shares of Common Stock of the close of business Company on the Reference Date: terms and subject to the conditions and adjustments (if applicable) set forth in this Paragraph 4 and in Paragraph 8. (b) Matthews shall not be entitled to exe▇▇▇▇▇ ▇▇e Option unless, on or before June 30, 2006, the lender of any Debt Financing for which Matthews earned the shares describe▇ ▇▇ ▇aragraph 1(e) hereof unconditionally and irrevocably (i) 7,785,062 forgives all or a portion of such Debt Financing or (ii) otherwise does not require repayment thereof (or a portion thereof). (c) The exact number of shares as to which the Option will become exercisable will be the amount of Company Common Stock were subject Debt Financing so forgiven or for which payment is not so required (up to issuance pursuant to outstanding Company Options a maximum of Five Million Dollars ($5,000,000)) divided by the Measuring Amount (as defined belowhereinafter defined). (d) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant The Option may be exercised by delivering written notice to the Company Stock Plansat its principal office on or before June 30, other than Company Restricted Stock 2006. No exercise price is payable with respect to such exercise. A certificate or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (iicertificate(s) 7,748,679 representing the shares of Company Common Stock are reserved for future issuance under covered by such Option exercise shall be issued as soon as practicable thereafter. (e) If the Company shall issue any additional shares of Common Stock Plans. Company has made available by way of a stock dividend on, or split-up, subdivision, or reclassification of, its outstanding shares of Common Stock, or the like prior to Parent a true, complete and correct list of each Company Option outstanding as the exercise of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) then the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expiresshall be proportionately adjusted. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will Such adjustments shall be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved made successively each time so required by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials this subparagraph (as defined in Section 2.4(be). (f) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference DateIf there shall be any capital reorganization, there are no outstanding or authorized stock appreciationconsolidation, phantom stock, profit participation merger or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) reorganization of the Company Disclosure Schedulewith any other entity or entities, or any sale of all or substantially all of the Company's property and assets to any other entity or entities prior to exercise of the Option, the Company shall take appropriate action to enable Matthews to receive upon any subs▇▇▇▇▇▇ ▇xercise of such Option, in whole or in part, in lieu of any shares of Common Stock of the Company, the shares, securities, or other assets which he would have received if such exercise had been effected immediately before such capital reorganization, consolidation, merger, or other reorganization. (g) The Company shall at all times maintain a sufficient number of authorized but unissued shares of Common Stock to satisfy its obligations under this Agreement. (h) The Company shall use reasonable commercial efforts to satisfy any employment or other requirement necessary to obtain such debt forgiveness or such lender's agreement not to require repayment, but shall have no liability to Matthews under this Paragraph 4 for ▇▇▇ ▇▇▇▇ure to satisfy such requirement in spite of such efforts. (i) No adjustment shall be made under subparagraph (e) or (f) of this Paragraph 4 by reason of the issuance of shares of Common Stock of the Company for cash, property or services, by way of stock options or warrants, subscription rights or otherwise. However, the provisions of this subparagraph (i) shall not affect the operation of Paragraph 8.

Stock Options. As of (a) Subject to Section 5.4(b), at the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject Effective Time, all rights with respect to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under each Company Option then outstanding shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each such Company Option in accordance with the applicable Company Benefit Plans that are stock plans terms (as set forth in Section 2.12(beffect as of the date of this Agreement) of the stock option plan under which it was issued and the stock option agreement by which it is evidenced. From and after the Effective Time, (i) each Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awardsOption assumed by Parent may be exercised solely for shares of Parent Common Stock, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 the number of shares of Company Parent Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available subject to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) shall be equal to the number of shares of Company Common Stock subject to such Company OptionOption immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole share (with cash, less the applicable exercise price, being payable for any fraction of a share), (4iii) the per share exercise price under each such Company Option shall be adjusted by dividing the per share exercise price under such Company Option by the Exchange Ratio and rounding up to the nearest cent and (iv) any restriction on the exercise of any such Company Option shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Company OptionOption shall otherwise remain unchanged; PROVIDED, HOWEVER, that (A) in accordance with the terms of the Employment Agreement between ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and the Company dated December 1, 1994, all unvested Company Options granted to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ pursuant to said Employment Agreement shall become immediately exercisable as of the Effective Time, (5B) in accordance with the terms of that certain Employment Agreement between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and the Company dated April 24, 1995, and that certain Employment Agreement between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and the Company dated March 3, 1995, certain unvested Company Options granted to Messrs. Selvi and ▇▇▇▇▇▇▇▇ pursuant to said Employment Agreements shall become immediately exercisable as of the Effective Time, (C) in accordance with the terms of the Company's 1995 Directors Stock Option Plan, unvested Company Options granted to outside directors of the Company pursuant to such plan shall become immediately exercisable as of the Effective Time, and (D) each Company Option assumed by Parent in accordance with this Section 5.4(a) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock split, stock dividend, reverse stock split, reclassification, recapitalization or other similar transaction subsequent to the Effective Time. Parent shall file with the SEC, no later than five business days after the date on which the Merger becomes effective, a Registration Statement on Form S-8 relating to the shares of Parent Common Stock issuable with respect to the Company Options assumed by Parent in accordance with this Section 5.4(a). (b) Notwithstanding anything to the contrary contained in this Section 5.4, in lieu of assuming outstanding Company Options in accordance with Section 5.4(a), Parent may, at its election, cause such outstanding Company Option was grantedOptions to be replaced by issuing substantially equivalent replacement stock options in substitution therefor. Parent shall use reasonable efforts to attempt to ensure that any such replacement stock options issued in substitution for Company Options that, immediately prior to the Effective Time, qualified as incentive stock options (6as defined in Section 422 of the Code) continue to qualify as incentive stock options immediately after the applicable vesting scheduleEffective Time. (c) The Company shall take all action that may be necessary (under the plans pursuant to which Company Options are outstanding and otherwise) to effectuate the provisions of this Section 5.4 and to ensure that, from and after the Effective Time, holders of Company Options have no rights with respect thereto other than those specifically provided in this Section 5.4. (d) The Company shall terminate the 1995 Purchase Plan and all outstanding "options" thereunder prior to the Effective Time, and shall take such actions as may be necessary to ensure that: (i) all outstanding "options" under the extent to which such Company Option was vested and exercisable as of 1995 Purchase Plan terminate on the Reference Date, and (7) last trading day preceding the date on which the Merger becomes effective; (ii) the price per share of the Company Common Stock purchased pursuant to all such Company Option expires. All "options" is determined as if the "Purchase Date" under Section 8 of the 1995 Purchase Plan were the last trading day preceding the date on which the Merger becomes effective; (iii) any shares of Company Common Stock subject purchased pursuant to issuance under such "options" are automatically converted as of the applicable Company Benefit Plans, upon issuance Effective Time into the right to receive Parent Common Stock on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants same basis as all other outstanding shares of Company Options were validly issued Common Stock; and properly approved by (iv) the Board 1995 Purchase Plan terminates immediately following the purchase of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share shares of Company Common Stock as determined on the date of grant of pursuant to such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Schedule"options."

Stock Options. As of (a) At the close of business on Effective Time, each option granted by the Reference Date: (i) 7,785,062 Company to purchase shares of Company Common Stock were (each an "Option," and collectively, "Options"), which is outstanding and unexercised immediately prior to the Effective Time, shall, at the option of the holder of such Option, be converted pursuant to either Section 1.3(a)(i) or (ii) below: (i) each Option held by a holder of an Option who, prior to the Effective Time, delivers a conversion agreement in the form of Exhibit A-1 attached hereto ("Conversion Agreement") shall be converted into an option to purchase shares of Purchaser Common Stock in such number and at such exercise price as set forth herein and otherwise having the same terms and conditions as in effect immediately prior to the Effective Time (except to the extent that such terms, conditions and restrictions may be altered in accordance with their terms as a result of the Merger contemplated hereby, and except that any limited rights related to such Option shall be cancelled and of no further force or effect): (x) the number of shares of Purchaser Common Stock to be subject to issuance the converted Option shall be equal to the product of (A) the number of shares of Company Common Stock subject to the original Option and (B) the Exchange Ratio; (y) the exercise price per share of Purchaser Common Stock under the converted Option shall be equal to (A) the exercise price per share of Company Common Stock under the original Option divided by (B) the Exchange Ratio; and (z) upon exercise of each Option by a holder thereof, the aggregate number of shares of Purchaser Common Stock deliverable upon such exercise shall be rounded down, if necessary, to the nearest whole share and the aggregate exercise price shall be rounded up, if necessary, to the nearest cent; or (ii) each Option not converted pursuant to outstanding Section 1.3(a)(i) above, shall be converted into the right to receive cash, to be paid in accordance with this Section 1.3(a)(ii). All Options converted to cash pursuant to this Section 1.3(a)(ii) shall terminate effective immediately prior to the Effective Time. In consideration of the foregoing, Purchaser shall make or shall cause to be made a cash payment to the holder of each Option, at the time provided in the final sentence of this Section 1.3(a)(ii), in an amount (less any applicable withholding taxes) equal to the number of shares of Company Options Common Stock covered by such Option multiplied by the amount by which the Cash Consideration exceeds the exercise price per share of Company Common Stock under the Option converted by such holder. A holder of an Option who has executed a cancellation agreement, substantially in the form of Exhibit A-2 attached hereto ("Cancellation Agreement"), that is delivered by the Company to Purchaser (x) prior to the Effective Time shall be paid the amount to be paid pursuant to this Section 1.3(a)(ii) within three (3) business days following the Effective Time, and (y) after the Effective Time shall be paid the amount to be paid pursuant to this Section 1.3(a)(ii) within five (5) business days of Purchaser's receipt of such Cancellation Agreement. The adjustments provided in Section 1.3(a)(i) above shall be effected in a manner consistent with the requirements of Section 424(a) of the Code. (b) The Company shall amend each Company Stock Option Plan (as defined below) to purchase provide for the conversion or cancellation of Options in accordance with this Section 1.3 (such amendments may be referred to herein together as the "Plan Amendments"). The Company Common Stock under shall also provide to Purchaser a notice identifying the conversion option applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) to holders of the Company Disclosure Schedule Options under Section 1.3(a) not less than five (the “Company Stock Plans”5) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant business days prior to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and Effective Time. Such notice shall provide: (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2i) the name of the holder of such Company Option, ; (3ii) the number of shares of Company Common Stock subject to such Company Option, ; (4iii) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, ; and (7iv) whether such Option shall be converted or cancelled as selected by the date on which holder of such Option. In the event the Company fails to provide a conversion method for an Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuedthis Section 1.3, are duly authorized such Option shall be cancelled and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in pursuant to Section 2.4(b1.3(a)(ii)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Schedule.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 At the Effective Time, each Company Option, whether vested or unvested, shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Option, the same number of shares of Company Parent Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company OptionOption would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time (rounded down to the nearest whole number), at a price per share (3rounded up to the nearest whole cent) equal to (y) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Option divided by (z) the number of full shares of Company Parent Common Stock subject deemed purchasable pursuant to such Company OptionOption in accordance with the foregoing; PROVIDED, (4) HOWEVER, that in the exercise price case of such Company Option, (5) the date on which such any Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as Section 422 of the Reference DateCode applies, the option price, the number of shares purchasable pursuant to such option and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified of exercise of such option shall be determined in accordance with the instruments foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. At or prior to the Effective Time, the Company shall make all necessary arrangements with respect to the Company Stock Plans to permit the assumption of the unexercised Company Options by Parent pursuant to which they are issuedthis Section. (ii) Effective at the Effective Time, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Parent shall assume each Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) Option in material compliance accordance with the terms of the applicable Company Benefit Stock Plan under which it was issued and the stock option agreement by which it is evidenced. At or prior to the Effective Time, Parent shall take all applicable Legal Requirements and recorded on corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of the Company Financials (as defined in Section 2.4(b)) Options assumed by it in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Schedulethis Section.

Stock Options. As of the close of business on the Reference Date: (ia) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans Except as set forth on Schedule 4.4, the Company shall not issue stock, grant stock options, warrants, or other rights to purchase stock in Section 2.12(b) the Company, except pursuant to and in accordance with the terms of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expiresStock Incentive Plan. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly Unless otherwise approved by the Board of Directors Directors, the Company shall not issue or grant any of such securities with respect to the purchase of more than 5.5 million shares of Common Stock, or any shares of Preferred Stock, under the Stock Option Plan and Stock Incentive Plan (including options issued in exchange for options for shares of Common Stock of Pathnet which are issued and outstanding as of the date hereof, and as adjusted for stock splits, stock dividends, reclassification and similar events). (b) Notwithstanding any of the foregoing clause 4.4(a), the Company shall be permitted to grant stock options (or a duly authorized committee or subcommittee and issue Common Stock upon the exercise thereof) of the Company to the individuals and entities listed on Schedule 4.4 in material compliance the amounts and under the terms and conditions set forth opposite such individual or entity. Pursuant to the terms of the Stock Option Plan and the Stock Incentive Plan, qualified incentive stock options and nonqualified options may be granted to employees, officers, directors and consultants of the Company pursuant to and in accordance with the terms of this Agreement and the applicable Company Benefit terms of the Stock Option Plan and all applicable Legal Requirements the Stock Incentive Plan as adopted as of the date hereof, and recorded the exercise of any options shall be conditioned on the Company Financials (as defined in optionee making satisfactory provisions for the payment of any withholding taxes due on such exercise and agreeing to be bound by the provisions of Section 2.4(b)) in accordance with GAAP (as defined in 5 and Section 2.4(b))7 hereof. The exercise price of each Company Neither the Stock Option is not less than Plan nor the fair market value Stock Incentive Plan may be amended, revised or waived after the date hereof without the consent of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 majority of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as Series Preferred Stockholder Directors. (c) Notwithstanding anything set forth in Sections 2.2(b) this Section 4.4 to the contrary, management may change the composition and (c) compensation and remuneration of existing management, consultants and employees of the Company Disclosure Scheduleand may hire new management, consultants and employees of the Company, provided the compensation and remuneration of such new and existing management, consultants and employees (including any capital stock of the Company issued to such new existing management, consultants or employees and any vesting schedules relating to the grant of any such capital stock) is within the ranges established from time to time by the Board of Directors with the approval of a majority of the Series Preferred Stockholder Directors. Pursuant to the terms of the Stock Option Plan and the Stock Incentive Plan, all awards under such plans must be administered by a "Committee" whose members must be designated by the Board of Directors.

Stock Options. As At the Effective Time, each outstanding ------------- option to purchase shares of Common Stock (an "Option"), whether vested or unvested, shall be assumed by the close of business Parent and shall constitute an option to acquire, on the Reference Date: (i) 7,785,062 shares of Company Common Stock same terms and conditions as were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock applicable under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Parent Common Stock subject as if each share underlying such option were exchanged for Parent Common Stock pursuant to Section 4.1(e) (i) (rounded up to the nearest whole number), at a price per share (rounded down to the nearest whole cent) equal to (y) the aggregate exercise price for the shares of Common Stock otherwise purchasable pursuant to such Company Option, Option divided by (4z) the exercise price number of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All full shares of Company Parent Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments deemed purchasable pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) such Option in accordance with GAAP (as defined the foregoing; provided, -------- however, that in Section 2.4(b)). The exercise price the case of each Company any Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under which Section 422 of the Code so qualifies ------- applies, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in accordance with the foregoing, with the exceptions that the number of shares of Parent Common Stock shall be rounded down to the nearest whole share and the purchase price per share exercise price shall be rounded up to the nearest cent, and further subject to such adjustments as are necessary in order to satisfy the requirements of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (cSection 424(a) of the Code and the regulations promulgated thereunder. At or prior to the Effective Time, the Company Disclosure Scheduleshall make all necessary arrangements to permit the assumption of the unexercised Options by the Parent pursuant to this Section.

Stock Options. As of (a) At the close of business on the Reference Date: (i) 7,785,062 Effective Time, all outstanding and unexercised employee and director options to purchase shares of Company ▇▇▇▇▇▇ Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common each, a “▇▇▇▇▇▇ Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company OptionsOption”), and (ii) 7,748,679 shares of Company whether vested or unvested at the Effective Time, shall then cease to represent an option to purchase ▇▇▇▇▇▇ Common Stock are reserved for future issuance under and will be converted automatically into options to purchase M&T Common Stock; provided, that with respect to each ▇▇▇▇▇▇ Stock Option that is subject to performance-based vesting conditions, the Company performance-based vesting conditions applicable to such ▇▇▇▇▇▇ Stock PlansOption shall be deemed satisfied at the Effective Time. Company has made available The following shall apply with respect to Parent a true, complete and correct list of each Company ▇▇▇▇▇▇ Stock Option outstanding as of after the Reference Date, and Effective Time: (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3i) the number of shares of Company M&T Common Stock subject purchasable upon exercise of each ▇▇▇▇▇▇ Stock Option will equal the product of (x) the number of shares of ▇▇▇▇▇▇ Common Stock that were purchasable under the ▇▇▇▇▇▇ Stock Option immediately before the Effective Time and (y) the Exchange Ratio, rounded down, if necessary, to such Company Option, the nearest whole share; and (4ii) the exercise price per share of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company M&T Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and for each ▇▇▇▇▇▇ Stock Option will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company equal (or a duly authorized committee or subcommittee thereofx) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company the ▇▇▇▇▇▇ Stock Option was not less than in effect immediately before the fair market value Effective Time divided by (y) the Exchange Ratio, rounded up, if necessary, to the nearest cent. (b) Notwithstanding the foregoing, (i) the exercise price and the number of a share shares of Company M&T Common Stock on purchasable pursuant to the ▇▇▇▇▇▇ Stock Options shall be determined in a manner consistent with any applicable requirements of Section 409A of the Code and (ii) in the case of any ▇▇▇▇▇▇ Stock Option to which Section 422 of the Code applies, the exercise price and the number of shares of M&T Common Stock purchasable pursuant to such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. (c) M&T will assume each ▇▇▇▇▇▇ Stock Option as adjusted in accordance with Section 2.5(a) above. Except as specifically provided above, following the Effective Time, each ▇▇▇▇▇▇ Stock Option shall continue to be governed by the same terms and conditions (including vesting) as were applicable under such ▇▇▇▇▇▇ Stock Option immediately prior to the Effective Time pursuant to the applicable date of grantaward agreement. As of used in this Agreement, the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as term “▇▇▇▇▇▇ Stock Plans” means the plans set forth in Sections 2.2(b) and (cSection 2.5(c) of the Company ▇▇▇▇▇▇ Disclosure Schedule.

Stock Options. As of Prior to the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of Effective Time, the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awardsshall take all actions necessary to provide, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding effective as of the Reference DateEffective Time, and (1) for the particular Company Stock Plan pursuant to which such Company Option was grantedcancellation, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified set forth in this Section 1.08(a) and without any payment therefor except as otherwise provided in this Section 1.08(a), of all outstanding options to purchase Common Shares (each, a “Stock Option”) outstanding at the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company Effective Time (whether or a duly authorized committee not then vested or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(bexercisable)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference DateEffective Time, there are each Stock Option shall be cancelled (and to the extent formerly so vested or exercisable shall no outstanding longer be vested or authorized stock appreciationexercisable) and shall entitle each holder thereof, phantom stockin cancellation and settlement therefor, profit participation or other similar rights or equity based awards to receive a payment, if any, in cash from the Company (less any applicable withholding taxes), as promptly as reasonably practicable following the Effective Time, equal to (i) the amount, if any, by which the Merger Consideration exceeds the exercise price per share with respect to such Stock Options, multiplied by (ii) the total number of Common Shares then issuable upon the exercise of such Stock Options (whether or not then vested or exercisable). Each Stock Option, when cancelled pursuant to this Section 1.08(a), shall no longer represent the right to acquire Company other than Shares and shall represent the right to receive the cash consideration, if any, as set forth in Sections 2.2(bthis Section 1.08(a). Notwithstanding the foregoing, no Stock Option shall be subject to this Section 1.08(a), if, in accordance with its terms, upon consummation of the Merger, (i) the exercise price per Company Share of such Stock Option will be greater than the Merger Consideration per Company Share and (cii) the holder of such Stock Option will be entitled to receive, upon exercise of such Stock Option, only the Merger Consideration multiplied by the number of Company Disclosure ScheduleShares subject to such Stock Option. For the avoidance of doubt, in the event that a Stock Option is forfeited by its terms prior to the Effective Time, the holder thereof shall not be entitled to any payment in respect of such Stock Option pursuant to this Section 1.08(a) or otherwise.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to At the Effective Time, each outstanding Company Options (as defined below) to purchase Company Common Stock Option under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock whether vested or Company Restricted Stock Unitsunvested, are referred shall be deemed to in this Agreement as “Company Options”constitute an option to acquire (a "New Parent Option"), on the same terms and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance conditions as were applicable under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Common Stock of Parent (rounded to the nearest whole number) equal to the product of (A) the number of Shares issuable upon exercise of such Company Option and (B) the Price Per Share divided by the average of the closing sales prices of Common Stock of Parent on the New York Stock Exchange for the ten (10) consecutive days immediately prior to and including the day preceding the Effective Time, at an exercise price per share (rounded to the nearest whole cent) equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Option divided by (y) the aggregate number of shares of Common Stock of Parent purchasable pursuant to the New Parent Option (as calculated immediately above); provided, however, that in the case of any Company Option to which Section 422 of the Code applies, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. At or prior to the Effective Time, the Company shall take all necessary actions to permit the assumption of the unexercised Company Options by Parent pursuant to this Section and shall take all action necessary to cause the funds held in the Company's Employee Stock Purchase Plan to be used to purchase outstanding Shares through open market transactions so that such Shares will be converted into the right to receive cash in the Merger; provided that thereafter the Company shall terminate the Company's Employee Stock Purchase Plan. -40- 44 (ii) Effective at the Effective Time, Parent shall assume, as a New Parent Option, each outstanding Company Option in accordance with this Section and with the terms of the Stock Plan under which it was issued and the stock option agreement by which it is evidenced. Not later than thirty calendar days after the Closing Date, Parent shall file a registration statement under the Securities Act of 1933 on Form S-8, or other appropriate form, covering shares of Parent Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleNew Parent Options.

Stock Options. As (a) On or prior to the Reverse Split, Oryx will take all action necessary such that each Oryx Stock Option (as defined in Section 3.2(b)) that was granted pursuant to the Oryx Stock Option Plans (as defined in Section 3.2(b)) prior to the Reverse Split and which remains outstanding immediately prior to the Effective Time shall cease to represent a right to acquire shares of Oryx Common Stock and shall be converted, at the close of business Effective Time, into an option to acquire, on the Reference Date: (i) 7,785,062 same terms and conditions as were applicable under the Oryx Stock Option, that number of shares of Company Common Stock were determined by multiplying the number of shares of Oryx Common Stock subject to issuance pursuant such Oryx Stock Option by the Exchange Ratio, rounded, if necessary, to outstanding the nearest whole share of Company Common Stock, at a price per share (rounded to the nearest one-hundredth of a cent) equal to the per share exercise price specified in such Oryx Stock Option divided by the Exchange Ratio; provided, however, that in the case of any Oryx Stock Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code, the option price, the number of shares subject to such option and the terms and conditions of exercise of such option shall be determined in a manner consistent with the requirements of Section 424(a) of the Code. On or prior to the Reverse Split, Oryx will amend the Oryx Stock Options (as defined below) and the Oryx Stock Option Plans to purchase give effect to this Section 1.10 and Section 5.5 and to make such changes in phraseology and form to give effect to the Reverse Split and the Merger and to the substitution of the Surviving Corporation for Oryx and Company Common Stock under for Oryx Common Stock. (b) As soon as practicable after the applicable Company Benefit Plans that are stock plans as set Effective Time, the Surviving Corporation shall deliver to the holders of Oryx Stock Options appropriate notices setting forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or such holders' rights pursuant to the Company Oryx Stock Option Plans (including, as applicable, that, by virtue of the Merger and pursuant to the terms of the Oryx Stock Option Plans, other than Company Restricted the Oryx Stock Options have become fully vested and exercisable) and the agreements evidencing the grants of such Oryx Stock Options shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 1.10 after giving effect to the Reverse Split and the Merger and the terms of the Oryx Stock Option Plans). To the extent permitted by law, the Surviving Corporation shall comply with the terms of the Oryx Stock Option Plans and shall take such reasonable steps as are necessary or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”)required by, and subject to the provisions of, such Oryx Stock Option Plans, to have the Oryx Stock Options which qualified as incentive stock options prior to the Effective Time continue to qualify as incentive stock options of the Surviving Corporation after the Effective Time. (iic) 7,748,679 The Surviving Corporation shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Company Common Stock are reserved for future issuance under delivery upon exercise of Oryx Stock Options in accordance with this Section 1.10. Promptly after the Company Stock Plans. Company has made available Effective Time, the Surviving Corporation shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor or other appropriate forms), with respect to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) options and shall use commercially reasonable efforts to maintain the exercise price effectiveness of such Company Option, registration statement or registration statements (5) and maintain the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as current status of the Reference Date, and (7prospectus or prospectuses contained therein) the date on which for so long as such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleoptions remain outstanding.

Stock Options. As (a) Prior to the consummation of the close of business on Merger, the Reference Date: Company shall take all actions necessary, and obtain any required consents, to provide that, (i) 7,785,062 shares effective as of Company the Effective Time each then outstanding option to purchase Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock granted under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) any of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are Company's stock option plans referred to in this Agreement as “Company Options”Section 4.5 (collectively, the "Option Plans"), and (ii) 7,748,679 shares any and all other outstanding options, stock warrants and rights to acquire Common Stock, whether or not granted pursuant to such Option Plans, whether or not then exercisable or vested (the "Options") shall be cancelled by virtue of Company the Merger, shall cease to exist and shall be of no further force or effect; provided, however, that each holder of an Option, whether vested or unvested, shall be entitled to receive, for each share of Common Stock are reserved for future issuance under issuable on exercise of such Option, an amount in cash equal to the Company Stock Plans. Company has made available to Parent a true, complete and correct list excess of each Company Option outstanding as of the Reference Date, and (1x) the particular Company Stock Plan pursuant to which such Company Option was granted, Per Share Amount over (2y) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each the Option as in effect immediately prior to the Effective Time. Such amount shall be subject to reduction by any applicable tax withholding. The Company Option was not less than and Parent agree that such amounts are the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards sole payments that will be made with respect to Company other than or in relation to the Options. No consideration shall be payable with respect to any Option which has an exercise price that exceeds the Per Share Amount. (b) The consideration due under this Section 2.2 shall be payable as set soon as practicable after the Effective Time without interest after (x) verification by the Paying Agent of the ownership and terms of the particular Option by reference to the Company's records, and (y) delivery in the manner provided in Section 2.4 of a written instrument duly executed by the owner of the applicable Option, in a form provided by the Paying Agent and setting forth (i) the aggregate number of Options owned by that person and their respective issue dates and exercise prices, (ii) a representation by the person that he or she is the owner of all Options described pursuant to clause (x), that none of those Options has expired or ceased to be exercisable prior to the Effective Time, and (iii) a consent to the treatment of such Options pursuant to this Section 2.2 in Sections 2.2(b) and full satisfaction of all rights relating to such Options. (c) Except as provided herein or as otherwise agreed to by the parties, the Company shall cause the Option Plans to terminate effective not later than the Effective Time, and the provisions in any other plan, program or arrangement, providing for the issuance or grant by the Company or any of its Subsidiaries of any interest in respect of the capital stock of the Company Disclosure Scheduleor any of its Subsidiaries shall be terminated effective not later than the Effective Time. (d) The Company represents and warrants that all of the Option Plans provide that the Company can take the actions described in this Section 2.2 without obtaining the consent of any holders of Options. (e) The Company shall take any reasonable action required to cause the disposition of the Options in accordance with this Section 2.2 to be exempt from the provisions of 16(b) of the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder (the "Exchange Act"). (f) Pursuant to the terms of the Company's Non-Employee Directors' Retainer Stock Plan, all share equivalents credited to participant deferral accounts shall be cancelled in exchange for an amount in cash equal to the Per Share Amount multiplied by the equivalents so cancelled. The Company shall pay such amount as soon as practicable after the Effective Time.

Stock Options. As (a) At the Effective Time, each outstanding option to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the plans set forth on Section 1.11(a) of the close of business Company Disclosure Schedule, whether vested or unvested, shall be assumed by Parent (all plans or agreements described above pursuant to which any Company Stock Option has been issued are referred to collectively as the "Company Plans"). Each Company Stock Option shall be deemed to constitute an option to acquire, on the Reference Date: same terms and conditions as were applicable under such Company Stock Option, the same number of shares of Parent Common Stock, rounded to the nearest whole number, as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time, at a price per share equal to (iy) 7,785,062 the aggregate exercise price for the shares of Company Common Stock were subject to issuance otherwise purchasable pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “such Company Stock Plans”) Option divided by (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1z) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name product of the holder of such Company Option, (3) the number of shares of Company Common Stock subject otherwise purchasable pursuant to such Company OptionStock Option times the Exchange Ratio; provided, (4) however, that in the exercise price case of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent any option to which such Company Option was vested and exercisable as Section 421 of the Reference Date, and (7) the date on which such Company Option expires. All shares Code applies by reason of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” its qualification under Section 422 of the Code so qualifies ("incentive stock options" or "ISOs"), the option price, the number of shares purchasable pursuant to such option and the per share terms and conditions of exercise price of each Company Option was not less than such option shall be determined in order to comply with Section 424(a) of the fair market value of a share Code. (b) As soon as practicable after the Effective Time, Parent shall deliver to the holders of Company Stock Options appropriate notices setting forth such holders' rights pursuant to the respective Company Plans, and the agreements evidencing the grants of such Company Stock Options shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 1.11 after giving effect to the Merger). (c) Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock on the applicable date for delivery upon exercise of grantCompany Stock Options assumed in accordance with this Section 1.11. As of soon as practicable after the Reference DateEffective Time, there are no outstanding Parent shall file a registration statement on Form S-8 (or authorized stock appreciation, phantom stock, profit participation any successor or other similar rights or equity based awards appropriate form) with respect to the shares of Parent Common Stock subject to any Company other than as set forth in Sections 2.2(b) and (c) Stock Options held by persons who are or were directors, officers or employees of the Company Disclosure Scheduleor its subsidiaries and shall use its best efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus contained therein) for so long as such Company Stock Options remain outstanding.

Stock Options. As (a) At the Effective Time, each outstanding Option, whether vested or unvested, shall, by virtue of this Agreement and without any further action of the close Company, the Surviving Corporation, TCM or the holder of business on any Option, be converted into a stock option to purchase TCM Common Stock in a manner consistent with Section 424 of the Reference Date: Code and as provided by 49 subsection (ib) 7,785,062 below, and, after the Effective Time, all references to the Company in the Company Option Plan and the applicable stock option agreements shall be deemed to refer to the Surviving Corporation, which shall have retained the Company Option Plan as of the Effective Time by virtue of this Agreement and the Merger and without any further action, except that references to shares of Company Common Stock were subject shall be deemed to issuance pursuant be to outstanding Company Options (as defined below) to purchase Company TCM Common Stock in accordance with subsection (b) below. (b) Each Option so retained by the Surviving Corporation under this Agreement shall continue to have, and be subject to, the applicable Company Benefit Plans that are stock plans as same terms and conditions set forth in Section 2.12(b) of the Company Disclosure Schedule (Option Plan and the “Company Stock Plans”) (equity or other equity-based awards, whether payable applicable stock option agreements as in cash, shares or otherwise, granted under or pursuant effect immediately prior to the Company Stock PlansEffective Time, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and except that (iii) 7,748,679 such Option will be exercisable for that number of shares of Company TCM Common Stock are reserved for future issuance under equal to the Company Stock Plans. Company has made available to Parent a true, complete and correct list product of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject that were purchasable under such Option immediately prior to the Effective Time multiplied by the Common Stock Exchange Ratio, rounded down to the nearest whole number of shares of TCM Common Stock and (ii) the per share exercise price for the TCM Common Stock issuable upon exercise of such Company Option, assumed Option shall be equal to the quotient of (4x) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a per share of Company Common Stock at which such Option was exercisable immediately prior to the Effective Time, divided by (y) the Common Stock Exchange Ratio, rounding the resulting exercise price up to the next whole cent. It is the intention of the parties that the Options remaining outstanding following the Effective Time will qualify, to the maximum extent permissible following the Effective Time, as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under options as defined in Section 422 of the Code so qualifies and solely to the per share exercise price of each Company Option was not less than extent such Options qualified as incentive stock options prior to the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and Effective Time. (c) of As soon as reasonably practicable after the Effective Time, the Company Disclosure Schedulewill deliver to Option holders appropriate notices setting forth such holders' rights pursuant to the Company Option Plan and the applicable stock option agreements evidencing the Options and confirming that the Company Option Plan and the Options have been converted in accordance with the terms and conditions required by this Section 5.06. TCM hereby agrees to register the TCM Common Stock underlying such Options with the SEC on Form S-8 within ten (10) business days subsequent to the Effective Time.

Stock Options. As (a) At the Effective Time, each outstanding option to purchase Shares (each “Company Stock Option” and, collectively, “Company Stock Options”) issued pursuant to the Company’s 1997 Stock Option Plan or any other agreement or arrangement, whether vested or unvested, shall be converted as of the close of business on the Reference Date: (i) 7,785,062 Effective Time into options to purchase shares of Company Parent Common Stock were subject to issuance in accordance with this Section 2.11. All plans or agreements described above pursuant to outstanding which any Company Options (Stock Option has been issued or may be issued are referred to collectively as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards.” At the Effective Time, whether payable in cash, shares or otherwise, granted under or pursuant to the each Company Stock PlansOption shall be deemed to constitute an option to acquire, other than Company Restricted Stock on the same terms and conditions (but taking into account any changes thereto, including any acceleration in the vesting or Company Restricted Stock Units, are referred to in exercisability of such option by reason of this Agreement or the Merger or the transactions or matters contemplated by this Agreement provided for in such option or the applicable plan with respect thereto) as “were applicable to such Company Options”)Stock Option, and (ii) 7,748,679 a number of shares of Company Parent Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available equal to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company OptionStock Option immediately prior to the Effective Time, multiplied by the Exchange Ratio, rounded down to the nearest whole share, at a price per share of Parent Common Stock equal to (4i) the per share exercise price of such Company Option, (5) for the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject otherwise purchasable pursuant to issuance under such Company Stock Option divided by (ii) the applicable Company Benefit PlansExchange Ratio, upon issuance on rounded up to the terms and conditions specified nearest cent; provided, however, that in the instruments pursuant case of any option to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms Section 421 of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price Code applies by reason of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” its qualification under Section 422 of the Code so qualifies (“incentive stock options” or “ISOs”), Parent may cause the option price, the number of shares purchasable pursuant to such option and the per share terms and conditions of exercise price of each Company Option was not less than such option to be determined so as to comply with Section 424(a) of the fair market value of a share Code. (b) As soon as practicable after the Effective Time, Parent shall deliver to the holders of Company Stock Options appropriate notices setting forth such holders’ rights pursuant to the Company Plan and that the agreements evidencing the grants of such options shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.11 after giving effect to the Merger). (c) Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Stock Options assumed in accordance with this Section 2.11. Within ten (10) business days after the Effective Time, Parent shall file a registration statement on the applicable date of grant. As of the Reference Date, there are no outstanding Form S-8 (or authorized stock appreciation, phantom stock, profit participation any successor or other similar rights or equity based awards appropriate forms) with respect to the shares of Parent Common Stock subject to any Company other than as set forth in Sections 2.2(b) Stock Options and shall use all commercially reasonable efforts to maintain the effectiveness of such registration statement or registration statements (c) and maintain the current status of the prospectus or prospectuses contained therein) for so long as such options remain outstanding. (d) At or before the Effective Time, the Company Disclosure Scheduleshall cause to be effected any necessary amendments to the Company Plans to give effect to the foregoing provisions of this Section 2.11.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 At the Effective Time, each Company Option whether vested or unvested, shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Option, the same number of shares of Company Parent Common Stock were as the holder of such Company Option would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time, at a price per share (rounded up to the nearest whole cent) equal to (y) the aggregate exercise price for the Common Shares otherwise purchasable pursuant to such Company Option divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to such Company Option in accordance with the foregoing; provided, however, that in the case of any Company Option to which Section 422 of the Code applies, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in accordance with the foregoing, subject to issuance pursuant such adjustments as are necessary in order to outstanding Company Options (as defined below) to purchase Company Common Stock under satisfy the applicable Company Benefit Plans that are stock plans as set forth in requirements of Section 2.12(b424(a) of the Code; provided, further, that to the extent that Common Shares acquired upon exercise of a Company Disclosure Schedule (the “Company Stock Plans”) (equity Option would be subject to vesting or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance restrictions under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as terms of the Reference Date, and (1) the particular relevant Company Stock Plan pursuant to under which such Company Option was grantedissued ("Company Restricted Shares"), (2) the name of the holder of such Company Option, (3) the number of shares of Parent Common Stock to be issued upon exercise of an assumed Company Option in accordance with the foregoing that bears the same ratio to the total shares of Parent Common Stock deemed purchasable pursuant to such assumed Company Option as the number of Company Restricted Shares bears to the total number of Company Shares issuable under such Company Option shall be subject to the same vesting and other restrictions as would be applicable to the Company Restricted Shares. At or prior to the Effective Time, the Company shall make all necessary arrangements with respect to the Company Stock Plans to permit the assumption of the unexercised Company Options by Parent pursuant to this Section. (ii) Effective at the Effective Time, Parent shall assume each Company Option in accordance with the terms of the relevant Company Stock Plan under which it was issued and the stock option agreement by which it is evidenced. At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Options assumed by it in accordance with this Section. As soon as practicable after the Effective Time, Parent shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor or other appropriate forms), or another appropriate form (or shall cause such Company Option to be deemed to be an option issued pursuant to a Parent Stock Plan for which shares of Parent Common Stock have previously been registered pursuant to an appropriate registration form) with respect to the Parent Common Stock subject to such Company OptionOptions, (4) and shall use its reasonable best efforts to maintain the exercise price effectiveness of such Company Option, registration statements (5and maintain the current status of the prospectus or prospectuses contained therein) the date on which for so long as such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleremain outstanding.

Stock Options. As of (a) Subject to Section 5.4(b), at the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject Effective Time, all rights with respect to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under each Company Option then outstanding shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each such Company Option in accordance with the applicable Company Benefit Plans that are stock plans terms (as set forth in Section 2.12(beffect as of the date of this Agreement) of the stock option plan under which it was issued and the terms of the stock option agreement by which it is evidenced. From and after the Effective Time, (i) each Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awardsOption assumed by Parent may be exercised solely for shares of Parent Common Stock, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 the number of shares of Company Parent Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available subject to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) shall be equal to the number of shares of Company Common Stock subject to such Company OptionOption immediately prior to the Effective Time multiplied by the Exchange Ratio, rounding down to the nearest whole share, (4iii) the per share exercise price under each such Company Option shall be adjusted by dividing the per share exercise price under such Company Option by the Exchange Ratio and rounding up to the nearest cent, and (iv) any restriction on the exercise of any such Company Option shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Company OptionOption shall otherwise remain unchanged; provided, (5however, that each Company Option assumed by Parent in accordance with this Section 5.4(a) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock split, stock dividend, reverse stock split, reclassification, recapitalization or other similar transaction effected subsequent to the Effective Time. Parent shall file with the SEC, no later than 10 business days after the date on which such the Merger becomes effective, a registration statement on Form S-8 relating to the shares of Parent Common Stock issuable with respect to the Company Option was granted, (6) the applicable vesting schedule, Options and the extent Company ESPP Options assumed by Parent in accordance with this Section 5.4(a). (b) Prior to the Effective Time, the Company shall take all action that may be necessary (under the plans pursuant to which such Company Option was vested Options are outstanding and exercisable as otherwise) to effectuate the provisions of this Section 5.4 and to ensure that, from and after the Reference DateEffective Time, and holders of Company Options have no rights with respect thereto other than those specifically provided in this Section 5.4. (7c) At the date on which such Company Option expires. All Effective Time all outstanding rights to purchase shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on ESPP ("Purchase Rights") shall be converted (in accordance with the terms Exchange Ratio) into rights to purchase shares of Parent Common Stock (with the number of shares rounded down to the nearest whole share and conditions specified the purchase price as of the offering date for each offering period in effect as of the instruments pursuant Effective Time rounded up to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessablethe nearest whole cent). All grants of Company Options were validly issued such converted Purchase Rights shall be assumed by Parent, and properly approved by each offering period in effect under the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) ESPP immediately prior to the Effective Time shall be continued in material compliance accordance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on ESPP until the end of such offering period. No additional offering periods will be granted under the ESPP following the Effective Time, provided that references to the Company Financials in the ESPP and related documents shall mean Parent (except that the purchase price as defined in Section 2.4(b)) in accordance of the enrollment date for a relevant period shall be determined with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than respect to the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on such date, as adjusted hereby). Parent agrees that, from and after the applicable date of grant. As Effective Time, the Company's employees not participating in an offering which has been continued under the Company's ESPP may participate in the employee stock purchase plan sponsored by Parent (the "Parent ESPP"), subject to the terms and conditions of the Reference DateParent ESPP, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards and that service with respect to the Company other than shall be treated as set forth in Sections 2.2(b) and (c) service with Parent for purposes of determining eligibility of the Company Disclosure ScheduleCompany's employees under the Parent ESPP.

Stock Options. As (a) At the Effective Time, each outstanding CompCore Option, whether vested or unvested, shall be deemed to constitute an option (an "Assumed Option") to acquire, on the same terms and conditions as were applicable under the CompCore Option, such number of shares of ▇▇▇▇▇ Common Stock as the holder of such CompCore Option would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time (rounded down to the nearest whole share), at a price per share (rounded up to the nearest whole cent) equal to (x) the aggregate exercise price per share of CompCore Common Stock otherwise purchasable pursuant to such CompCore Option immediately prior to the Effective Time divided by (y) the number of full shares of ▇▇▇▇▇ Common Stock deemed purchasable pursuant to such CompCore Option in accordance with the foregoing; PROVIDED, HOWEVER, that, in the case of any CompCore Option to which Section 422 of the close Code applies ("incentive stock options"), the option price, the number of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance purchasable pursuant to outstanding Company Options (as defined below) such option and the terms and conditions of exercise of such option shall be determined in order to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in comply with Section 2.12(b425(a) of the Company Disclosure Schedule (Code and PROVIDED FURTHER, that in the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares case of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company any Assumed Option that remains outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name termination of the holder of such Company Option, Escrow (3as provided in Article IX and the Escrow Agreement) the number of shares of Company ▇▇▇▇▇ Common Stock subject to such Company Option, (4) issuable upon the subsequent exercise price of such Company Option, (5) Assumed Option shall be reduced in proportion to any reduction in the date on which such Company Option was granted, (6) number of shares of ▇▇▇▇▇ Common Stock received by holders of Assumed Options exercised prior to the applicable vesting schedule, termination of the Escrow as a result of any distribution of Escrow Shares to members of the ▇▇▇▇▇ Group pursuant to Article IX and the extent Escrow Agreement. (b) As soon as practicable after the Effective Time, ▇▇▇▇▇ shall deliver to which the participants in the CompCore Option Plan an appropriate notice setting forth such Company participants' rights pursuant thereto and the grants pursuant to the CompCore Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance Plan shall continue in effect on the same terms and conditions specified in (subject only to the instruments pursuant adjustments required by this Section 6.14 after giving effect to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessablethe Merger). All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance ▇▇▇▇▇ shall comply with the terms of the applicable Company Benefit CompCore Option Plan and all applicable Legal Requirements ensure, to the extent required by and recorded on subject to the Company Financials (provisions of the CompCore Option Plan, that the Assumed Options representing assumed CompCore Options which qualified as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than incentive stock options prior the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended Effective Time continue to qualify as an “incentive stock option” under Section 422 options after the Effective Time. (c) ▇▇▇▇▇ shall take all corporate action necessary to reserve for issuance a sufficient number of the Code so qualifies and the per share exercise price shares of each Company Option was not less than the fair market value of a share of Company ▇▇▇▇▇ Common Stock for delivery under the Assumed Options. Within thirty (30) days after the Effective Time, ▇▇▇▇▇ shall file a registration statement on the applicable date of grant. As of the Reference Date, there are no outstanding Form S-8 (or authorized stock appreciation, phantom stock, profit participation any successor or other similar rights appropriate forms), or equity based awards another appropriate form, with respect to Company other than the shares of ▇▇▇▇▇ Common Stock subject to the Assumed Options and shall use its best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses in connection therewith) for so long as set forth in Sections 2.2(b) and (cany Assumed Options remain outstanding. With respect to those individuals who subsequent to the Merger will be subject to the reporting requirements under Section 16(a) of the Company Disclosure ScheduleExchange Act, where applicable, ▇▇▇▇▇ shall administer the Assumed Options in a manner that complies with Rule 16b-3 promulgated under the Exchange Act.

Stock Options. As (a) Except as provided in Section 3.06(b), contingent on and immediately following the Effective Time, each Company Stock Option outstanding at the Effective Time with an exercise price less than $1.65 per Company Share (each, an “In-the-Money Company Option”) that is unvested at the Effective Time and held by a then-current employee of the close of business Company or its Subsidiaries shall cease to represent a right to acquire Company Shares and shall be converted automatically into an option to purchase Parent Shares on the Reference Date: same terms and conditions (including vesting schedule) as applied to such In-the-Money Company Option immediately prior to the Effective Time, except that (i) 7,785,062 shares the number of Parent Shares (rounded down to the nearest whole share) subject to each assumed In-the-Money Company Option shall be determined by multiplying the number of Company Common Stock were Shares subject to issuance pursuant to outstanding the unvested portion of such In-the-Money Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule Option by a fraction (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company OptionsOption Exchange Ratio”), the numerator of which is the per share Merger Consideration, and the denominator of which is the average closing price of the Parent Shares on the Nasdaq over the five trading days immediately preceding (but not including) the date on which the Effective Time occurs, and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, per Parent Share (5rounded up to the nearest whole cent) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and shall equal the per share exercise price of such In-the-Money Company Option immediately prior to the Effective Time divided by the Option Exchange Ratio. (b) Each (i) In-the-Money Company Option that is fully vested at the Effective Time, (ii) In-the-Money Company Option held by a non-employee director or former director of the Company and (iii) In-the-Money Company Option which by its terms, or the terms of the Company Equity Plan under which such option was granted, provides that such option shall become fully vested and convert into a right to receive a payment of cash upon the Merger or the other transactions contemplated hereby, shall in each case, contingent on and immediately following the Effective Time, be cancelled and converted automatically into the right to receive, as soon as practicable after the Effective Time, an amount in cash determined by multiplying (x) the excess, if any, of $1.65 over the applicable exercise price of such option by (y) the number of Company Shares subject to the vested portion of such In-the-Money Company Option. (c) Contingent on and immediately following the Effective Time, each Company Stock Option was that is not less than an In-the-Money Company Option assumed pursuant to Section 3.06(a) shall cease to represent a right to acquire Company Shares and shall be cancelled in full. (d) Parent shall take such actions as are necessary for the fair market value assumption of In-the-Money Company Options pursuant to Section 3.06(a), including the reservation, issuance and listing of Parent Shares as is necessary to effectuate the transactions contemplated by Section 3.06(a). Parent shall prepare and file with the SEC a share of Company Common Stock registration statement on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards Form S-8 with respect to the Parent Shares subject to such assumed In-the-Money Company other than Options and shall use its reasonable best efforts to have such registration statement declared effective as set forth in Sections 2.2(b) soon as practicable following the Effective Time and to maintain the effectiveness of such registration statement covering such assumed In-the-Money Company Options (c) and to maintain the current status of the prospectus contained therein) for so long as such In-the-Money Company Disclosure ScheduleOptions remain outstanding, subject in each case to policies and practices generally applicable to options to purchase Parent Common Stock at such time. It is intended that the assumption of the In-the-Money Company Options assumed by Parent shall comply with Sections 409A and 424 of the Code and this Section 3.06 shall be construed consistent with such intent.

Stock Options. As (a) Prior to the Effective Time, the Board of Directors shall adopt such resolutions and take such other actions as are required to approve and effect the matters contemplated by this Section 1.7. The Company shall use its best efforts to obtain any necessary consents of the close holders of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase effect this Section 1.7. (b) The Company Common Stock under the applicable Company Benefit Plans shall take all necessary steps to ensure that are each option to acquire shares of capital stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (“Option”) that has been granted under the Company’s 1992 Stock Option Plan, 1993 Non-Employee Directors Stock Option Plan and the 1999 Non-Statutory Stock Option Plan (each, as amended and in effect on the date hereof, the “Company Stock Option Plans”) (equity or other equity-based awards), whether payable in cash, shares or otherwise, granted under or pursuant and is outstanding as of immediately prior to the Company Effective Time, will (i) become fully exercisable or “vested” for a period of at least 10 days prior to the Effective Time, contingent upon the occurrence of the Effective Time, with respect to the 1999 Non-Statutory Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), Option Plan and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under with respect to the Company Stock Plans. Company has made available other Option Plans or other Option-related agreements, at the Effective Time to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent unexercised, automatically shall be cancelled and converted into the right to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plansreceive, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms provisions noted below, a lump sum cash payment in an amount equal to the product of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on following: (i) the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 excess, if any, of the Code so qualifies and Per Share Merger Consideration payable per Share over the per share exercise price of each Company Share subject to such Option, multiplied by (ii) the number of shares of Capital Stock covered by such Option, and in each case less applicable Taxes to be withheld (any payment made pursuant to this Section 1.7 to the holder of any Option was not shall be reduced by any income or employment Tax withholding required under (x) the Code, (y) any applicable state, local or foreign Tax laws and (z) any other applicable Laws, and, to the extent that any amounts are so withheld, those amounts shall be treated as having been paid to the holder of that Option for all purposes under this Agreement). (c) If, in accordance with Section 1.7(b)(i), the Per Share Merger Consideration payable per Share is less than the fair market value per share exercise price of a share any Option, then any such Option shall automatically be cancelled without any consideration as of Company Common Stock on the applicable date of grant. Effective Time. (d) As of the Reference DateEffective Time, there each of the Option Plans and any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of securities or rights to acquire securities of the Company shall be terminated and cancelled (without any liability on the part of Parent or the Surviving Corporation other than as expressly set forth in this Section 1.7). (e) No party to this Agreement shall be liable to any holder of any Option for any cash delivered to a public official pursuant to and in accordance with any abandoned property, escheat or similar Law. (f) The Company and the Board of Directors shall take any and all actions (including, but not limited to, giving requisite notices to, and using their best efforts to obtain all necessary consents from, holders of Options advising them of such cancellations and any rights pursuant to this Section 1.7) as are no outstanding necessary to (i) fully advise holders of Options of their rights under the Option Plans or authorized stock appreciationotherwise and the Options in connection with the Merger, phantom stock, profit participation and (ii) effectuate the provisions of this Section 1.7 under the terms of the Option Plans or other similar rights or equity based awards with respect to Company Option-related agreements. From and after the Effective Time, other than as expressly set forth in this Section 1.7, no holder of an Option shall have any rights in respect thereof other than to receive payment (if any) for the Options as set forth in Sections 2.2(bthis Section 1.7, and neither Parent nor the Surviving Corporation shall have any liability or obligation under any of the Option Plans or, other than the obligation to make any required payment set forth in this Section 1.7, with respect to the Options. (g) Any payment to be made to a holder of any Option in accordance with this Section 1.7 shall be made by the Surviving Corporation and, as a prerequisite to receiving any consideration pursuant to this Section 1.7, each holder of an Option shall be required to execute a written acknowledgment to the effect that (i) the payment of such consideration, if any, will satisfy in full the Company’s obligation to such person pursuant to such Option and (cii) subject to the payment of the such Consideration, if any, such Option held by such holder shall, without any action on the part of the Company Disclosure Scheduleor the holder, be deemed terminated, canceled, void and of no further force and effect as between the Company and the holder and neither party shall have any further rights or obligations with respect thereto. Such written acknowledgment shall be substantially in the form attached hereto as Exhibit 1.7. Until the provisions of this Section 1.7 are satisfied by the holder of each Option, such Option shall represent for all purposes after the Effective Time only the right to receive the payments, if any, without interest, from the Surviving Corporation pursuant to this Section 1.7. (h) The Company shall take all necessary action to provide that the Company’s 1993 Employee Stock Purchase Plan (the “ESPP”) and all options or other rights to purchase Shares granted under the ESPP shall be terminated effective as of the date of this Agreement and no participant in the ESPP shall thereafter be granted any rights thereunder to acquire any equity securities of the Company, the Surviving Corporation, Parent or any Subsidiary of any of the foregoing. The Company shall refund the payroll deductions, if any, credited to each participant’s account under the ESPP, without interest, in accordance with the terms of the ESPP.

Stock Options. As of (a) At the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject Effective Time, all rights with respect to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under Company Options then outstanding shall be converted into and become rights with respect to Veeco Shares, and Veeco shall assume each such Company Option in accordance with the applicable Company Benefit Plans that are stock plans terms (as set forth in Section 2.12(beffect as of the date of this Merger Agreement) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity stock option plan or other equity-based awardsarrangement under which it was issued and the terms of the stock option agreement by which it is evidenced. From and after the Effective Time, whether payable in cash(i) each Company Option assumed by Veeco may be exercised by the holder thereof solely for Veeco Shares, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares the number of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available Veeco Shares subject to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, shall be equal to the product of (2) the name of the holder of such Company Option, (3A) the number of shares of Company Common Stock subject to such Company OptionOption immediately prior to the Effective Time multiplied by (B) the Exchange Ratio, rounding to the nearest whole share, (4iii) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price under each such Company Option shall be adjusted by dividing (x) the per share exercise price under such Company Option by (y) the Exchange Ratio and rounding to the nearest cent and (iv) any restriction on the exercise or transfer of any such Company Option shall continue in full force and effect in accordance with its terms and the term, exercisability, vesting schedule and other provisions of or relating to such Company Option shall otherwise remain unchanged; PROVIDED, HOWEVER, that each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Dateassumed by Veeco in accordance with this Section 5.05(a) shall, there are no outstanding or authorized in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock appreciationsplit, phantom stockstock dividend, profit participation reverse stock split, reclassification, recapitalization or other similar rights or equity based awards transaction subsequent to the Effective Time. Veeco shall file with the SEC, no later than the date on which the Merger becomes effective, a registration statement on Form S-8 relating to the Veeco Shares issuable with respect to the Company Options assumed by Veeco in accordance with this Section 5.05(a). (b) Prior to the Effective Time, the Company shall take all action that may be necessary (under the plans pursuant to which Company Options are outstanding and otherwise) to effectuate the provisions of this Section 5.05 and to ensure that, from and after the Effective Time, holders of Company Options have no rights with respect thereto other than as set forth those specifically provided in Sections 2.2(b) and (c) of the Company Disclosure Schedulethis Section 5.05.

Stock Options. As (a) Each grantee under any of the close of business on the Reference Date: CHK Legacy Equity Plans (i) 7,785,062 who will be a SSE Employee and (ii) who holds as of the Distribution Date, one or more CHK Options, shall receive, effective as of the last to occur of the Distribution Date and the Registration Statement Effectiveness Date, as a replacement award in substitution for each such CHK Option (which shall be cancelled), an option to purchase a number of shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company SSE Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(bSSE Equity Plan (each a “Replacement SSE Option”) having a value (calculated using the SSE Share Price) equal to the value of the Company Disclosure Schedule (the “Company CHK Common Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant subject to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”CHK Option (calculated using the Pre-Distribution CHK Share Price), and (ii) 7,748,679 . The number of shares of Company SSE Common Stock are reserved for future issuance under subject to a Replacement SSE Option shall be equal to the Company Stock Plans. Company has made available to Parent a true, complete and correct list product of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3i) the number of shares of Company CHK Common Stock subject to a CHK Option as of the Distribution Date multiplied by (ii) a fraction, the numerator of which is the Pre-Distribution CHK Share Price and the denominator of which is the SSE Share Price, with the resulting number being rounded down to the nearest whole share. Each such Company Option, (4) Replacement SSE Option shall have the same comparative ratio of the exercise price to the SSE Share Price as the exercise price of such Company Option, each CHK Option to the Pre-Distribution CHK Share Price as provided under Code Section 424 and the applicable regulations thereunder. SSE shall be responsible for (5i) the date satisfaction of all tax reporting and withholding requirements in respect of the exercise of Replacement SSE Options issued in accordance with this Section 3.4(a) and (ii) remitting the appropriate tax or withholding amounts to the appropriate taxing authorities. Replacement SSE Options shall not be exercisable until the Registration Statement Effectiveness Date. Except as provided in the foregoing provisions of this Section 3.4(a), Replacement SSE Options granted under this Section 3.4(a) shall be granted on terms which such Company Option was granted, are in all material respects identical (6including with respect to vesting) to the applicable vesting schedule, and terms of the extent CHK Options with respect to which such Company Option was vested they replace. (b) Each grantee under any of the CHK Legacy Equity Plans (i) who is a CHK Legacy Award Holder, will be a CHK Employee or CHK Director and exercisable (ii) who will hold one or more CHK Options as of the Reference Distribution Date, shall receive, effective as of the last to occur of the Distribution Date and the Registration Statement Effectiveness Date, in substitution for each such CHK Option (7) the date on which such Company Option expires. All shall be cancelled), an option to purchase shares of Company CHK Common Stock under one of the CHK Legacy Equity Plans (each a “Post-Distribution CHK Option”) having a value (calculated using the Post-Distribution CHK Share Price) equal to the value of the shares of CHK Common Stock subject to issuance the CHK Option (calculated using the SSE Share Price). The number of shares of CHK Common Stock subject to a Post-Distribution CHK Option shall be equal to the product of (i) the number of shares of CHK Common Stock subject to a CHK Option as of the Distribution Date multiplied by (ii) a fraction, the numerator of which is the Pre-Distribution CHK Share Price and the denominator of which is the Post-Distribution CHK Share Price, with the resulting number being rounded down to the nearest whole share. Each such Post-Distribution CHK Option shall have the same comparative ratio of the exercise price to the Post-Distribution CHK Share Price as the exercise price of each CHK Option to the Pre-Distribution CHK Share Price as provided under Code Section 424 and the applicable Company Benefit Plansregulations thereunder. CHK (or one or more of the CHK Subsidiaries, upon issuance as designated by CHK) shall be responsible for (i) the satisfaction of all tax reporting and withholding requirements in respect of the exercise of Post-Distribution CHK Options issued in accordance with this Section 3.4(b) and (ii) remitting the appropriate tax or withholding amounts to the appropriate taxing authorities. Except as provided in the foregoing provisions of this Section 3.4(b), Post-Distribution CHK Options shall be granted on terms which are in all material respects identical (including with respect to vesting) to the terms and conditions specified in of the instruments pursuant CHK Options with respect to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Schedulesubstituted.

Stock Options. As of (a) All options (individually, a "Company Option" and collectively, the close of business on "Company Options") outstanding at the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock Effective Time under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) 1992 Stock Option Plan of the Company Disclosure Schedule (the “"Company Stock Plans”Plan") (equity or other equity-based awardsshall remain outstanding following the Effective Time. At the Effective Time, whether payable in cashsuch Company Options shall, shares or otherwise, granted under or pursuant to by virtue of the Merger and without any further action on the part of the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company OptionOptions, be assumed by Parent in such manner that Parent (a) is a corporation (or a parent or a subsidiary corporation of such corporation) "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code; or (b) to the extent that Section 424 of the Code does not apply to any such Company Options, would be such a corporation (or a parent or a subsidiary corporation of such corporation) were Section 424 applicable to such option. At the Effective Time, (3i) all references in the Company Plan to the Company shall be deemed to refer to Parent and (ii) as soon as practicable, but in no event later than 30 days following the Effective Time, Parent shall issue to each holder of a Company Option a document evidencing the assumption of such option by Parent in accordance herewith. Each Company Option assumed by Company (as assumed, the "Parent Options") shall be exercisable upon the same terms and conditions including, without limitation, vesting, as under the Company Plan and the applicable option agreement issued thereunder, except that (x) each such Company Option shall be exercisable for that whole number of shares of Parent Common Stock (rounded down to the nearest whole share) into which the number of shares of Company Common Stock subject to such Company Option, Option immediately prior to the Effective Time would be converted under Section 1.8 of this Agreement; and (4y) the exercise option price per share of such Company Option, (5) Parent Common Stock shall be an amount equal to the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as option price per share of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under such Company Option in effect immediately prior to the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved Effective Time divided by the Board of Directors of Company Exchange Ratio (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of option price per share, as so determined, being rounded upward to the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)nearest full cent). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company each Parent Option intended to qualify as an “incentive stock option” under Section 422 of shall be the Code so qualifies and date on which the per share exercise price of each corresponding Company Option was not less than granted. A cash payment shall be made for any fractional share based upon the fair market value of a last reported sale price per share of Company Parent Common Stock on the applicable Trading Day immediately preceding the date of grantexercise. (b) Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Parent Options in accordance with this Section 1.10. As of soon as practicable after the Reference DateEffective Time, there are no outstanding Parent shall file a registration statement on Form S-3 or authorized stock appreciationForm S-8, phantom stock, profit participation as the case may be (or any successor or other similar rights appropriate forms), or equity based awards another appropriate form with respect to Company other than as set forth in Sections 2.2(b) the shares of Parent Common Stock subject to the Parent Options and shall use its best efforts to maintain the effectiveness of such registration statement or registration statements (c) and maintain the current status of the Company Disclosure Scheduleprospectus or prospectuses contained therein) for so long as the Parent Options remain outstanding.

Stock Options. As (a) On or prior to the Reverse Split, Oryx will take all action necessary such that each Oryx Stock Option (as defined in Section 3.2(b)) that was granted pursuant to the Oryx Stock Option Plans (as defined in Section 3.2(b)) prior to the Reverse Split and which remains outstanding immediately prior to the Effective Time shall cease to represent a right to acquire shares of Oryx Common Stock and shall be converted, at the close of business Effective Time, into an option to acquire, on the Reference Date: (i) 7,785,062 same terms and conditions as were applicable under the Oryx Stock Option, that number of shares of Company Common Stock were determined by multiplying the number of shares of Oryx Common Stock subject to issuance pursuant such Oryx Stock Option by the Exchange Ratio, rounded, if necessary, to outstanding the nearest whole share of Company Common Stock, at a price per share (rounded to the nearest one- hundredth of a cent) equal to the per share exercise price specified in such Oryx Stock Option divided by the Exchange Ratio; provided, however, that in the case of any Oryx Stock Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code, the option price, the number of shares subject to such option and the terms and conditions of exercise of such option shall be determined in a manner consistent with the requirements of Section 424(a) of the Code. On or prior to the Reverse Split, Oryx will amend the Oryx Stock Options (as defined below) and the Oryx Stock Option Plans to purchase give effect to this Section 1.10 and Section 5.5 and to make such changes in phraseology and form to give effect to the Reverse Split and the Merger and to the substitution of the Surviving Corporation for Oryx and Company Common Stock under for Oryx Common Stock. (b) As soon as practicable after the applicable Company Benefit Plans that are stock plans as set Effective Time, the Surviving Corporation shall deliver to the holders of Oryx Stock Options appropriate notices setting forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or such holders' rights pursuant to the Company Oryx Stock Option Plans (including, as applicable, that, by virtue of the Merger and pursuant to the terms of the Oryx Stock Option Plans, other than Company Restricted the Oryx Stock Options have become fully vested and exercisable) and the agreements evidencing the grants of such Oryx Stock Options shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 1.10 after giving effect to the Reverse Split and the Merger and the terms of the Oryx Stock Option Plans). To the extent permitted by law, the Surviving Corporation shall comply with the terms of the Oryx Stock Option Plans and shall take such reasonable steps as are necessary or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”)required by, and subject to the provisions of, such Oryx Stock Option Plans, to have the Oryx Stock Options which qualified as incentive stock options prior to the Effective Time continue to qualify as incentive stock options of the Surviving Corporation after the Effective Time. (iic) 7,748,679 The Surviving Corporation shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Company Common Stock are reserved for future issuance under delivery upon exercise of Oryx Stock Options in accordance with this Section 1.10. Promptly after the Company Stock Plans. Company has made available Effective Time, the Surviving Corporation shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor or other appropriate forms), with respect to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) options and shall use commercially reasonable efforts to maintain the exercise price effectiveness of such Company Option, registration statement or registration statements (5) and maintain the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as current status of the Reference Date, and (7prospectus or prospectuses contained therein) the date on which for so long as such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleoptions remain outstanding.

Stock Options. As of (a) At the close of business on the Reference Date: (i) 7,785,062 Effective Time, all outstanding and unexercised employee and director options to purchase shares of Company Common Stock were subject (each, a “Company Stock Option”) will vest in full and then cease to issuance pursuant to outstanding Company Options (as defined below) represent an option to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “and will be converted automatically into options to purchase Purchaser Common Stock, and Purchaser will assume each Company Stock Plans”Option subject to its terms; provided, however, that after the Effective Time: (i) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 number of shares of Company Purchaser Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list purchasable upon exercise of each Company Stock Option outstanding as will equal the product of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3x) the number of shares of Company Common Stock subject to such that were purchasable under the Company Option, Stock Option immediately before the Effective Time and (4y) the Merger Consideration, rounded to the nearest whole share; and (ii) the per share exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of for each Company Stock Option is not less than will equal the fair market value quotient of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and (x) the per share exercise price of the Company Stock Option in effect immediately before the Effective Time and (y) the Merger Consideration, rounded to the nearest cent. (b) Notwithstanding the foregoing, (i) the exercise price and the number of shares of Purchaser Common Stock purchasable pursuant to the Company Stock Options shall be determined in a manner consistent with any applicable requirements of Section 409A of the Code and (ii) in the case of any Company Stock Option to which Section 422 of the Code applies, the exercise price and the number of shares of Purchaser Common Stock purchasable pursuant to such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. Except as specifically provided above, following the Effective Time, each Company Stock Option was not less than shall continue to be governed by the fair market value of a share of same terms and conditions as were applicable under such Company Common Stock on Option immediately prior to the Effective Time (after giving effect to any rights resulting from the transactions contemplated under this Agreement pursuant to the Company Stock Plans, the award agreements thereunder or any other agreement applicable date of grantto such Company Stock Options). As of used in this Agreement, the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to term “Company other than as Stock Plans” means the plans set forth in Sections 2.2(b) and (cSection 1.5(b) of the Company Disclosure Schedule.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 At the Effective Time, each outstanding option to purchase Shares (a "Company Option") under the Stock Plan, whether vested or unvested, shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Option, the same number of shares of Company Parent Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company OptionOption would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time and the Shares received in such exercise been deemed to be Stock Election Shares (without regard to any proration thereof) (rounded down to the nearest whole number), at a price per share (3rounded up to the nearest whole cent) equal to (y) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Option divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to such Company Option in accordance with the foregoing; provided, however, that in the case of any Company Option which is intended to be an "incentive stock option" (as defined in Section 422 of the Code), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. At or prior to the Effective Time, the Company shall make all necessary arrangements to permit the assumption of the unexercised Company Options by Parent pursuant to this Section. (ii) Effective at the Effective Time, Parent shall assume each Company Option in accordance with the terms of the Stock Plan under which it was issued and the stock option agreement by which it is evidenced. At or prior to the Effective Time, Parent shall take all corpo- rate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Options assumed by it in accordance with this Section. As soon as practicable after the Effec- tive Time, Parent shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor or other appropriate forms), with respect to the Parent Common Stock subject to such Company OptionOptions, (4) and shall use its best efforts to maintain the exercise price effectiveness of such Company Option, registration statements (5and maintain the current status of the prospectus or prospectuses contained therein) the date on which for so long as such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleremain outstanding.

Stock Options. As of (a) At the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject Effective Time, all rights with respect to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under each Company Option then outstanding shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each such Company Option in accordance with the applicable Company Benefit Plans that are stock plans terms (as set forth in Section 2.12(beffect as of the date of this Agreement) of the stock option plan under which it was issued and the stock option agreement by which it is evidenced. From and after the Effective Time, (i) each Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awardsOption assumed by Parent may be exercised solely for shares of Parent Common Stock, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 the number of shares of Company Parent Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available subject to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) shall be equal to the number of shares of Company Common Stock subject to such Company OptionOption immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole share, (4iii) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price under each such Company Option shall be adjusted by dividing the per share 39. exercise price under such Company Option by the Exchange Ratio and rounded up to the nearest cent and (iv) any restriction on the exercise of any such Company Option shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Company Option shall otherwise remain unchanged; provided, however, that each Company Option was not less than assumed by Parent in accordance with this Section 5.4(a) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction subsequent to the fair market value Effective Time. Parent shall file with the SEC, promptly after the date on which the Merger becomes effective, a registration statement on Form S-8 relating to the shares of a share Parent Common Stock issuable with respect to the Company Options assumed by Parent in accordance with this Section 5.4(a). (b) The Company shall take all action that may be necessary (under the plans pursuant to which Company Options are outstanding and otherwise) to effectuate the provisions of this Section 5.4 and to ensure that, from and after the Effective Time, holders of Company Common Stock on the applicable date of grant. Options have no rights with respect thereto other than those specifically provided in this Section 5.4. (c) As of the Reference DateEffective Time, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar the ESPP shall be terminated. The rights or equity based awards of participants in the ESPP with respect to any offering period then underway under the ESPP shall be determined by treating the last business day prior to the Effective Time as the last day of such offering period and by making such other pro-rata adjustments as may be necessary to reflect the reduced offering period but otherwise treating such offering period as a fully effective and completed offering period for all purposes of such Plan. Prior to the Effective Time, the Company other than as set forth in Sections 2.2(b) and shall take all actions (c) including, if appropriate, amending the terms of the Company Disclosure ScheduleESPP) that are necessary to give effect to the transactions contemplated by this Section 5.4(d).

Stock Options. As Each option (an "Option") to purchase Shares issued ------------- by the Company which is outstanding at the Effective Time shall be cancelled by virtue of the close Merger, without consideration except as provided in this Section 2.6, and shall cease to exist. Each holder of business an Option, whether or not immediately exercisable, shall be entitled to receive, for each Share issuable on exercise of such Option, an amount in cash equal to the Reference Date: excess of (x) the Common Stock Consideration over (y) the per Share exercise price of the Option as in effect immediately prior to the Effective Time. The consideration due under this Section 2.6 shall be payable without interest after (a) verification by the Paying Agent of the ownership and terms of the particular Option by reference to the Company's records, and (b) delivery in the manner provided in Section 2.8 of a written instrument duly executed by the owner of the applicable Option, in a form provided by the Paying Agent and setting forth (i) 7,785,062 shares the aggregate number of Company Options owned by that person and their respective issue dates and exercise prices; (ii) a representation by the person that he or she is the owner of all Options described pursuant to clause (i), and that none of those Options has expired or ceased to be exercisable; and (iii) a confirmation of and consent to the cancellation of all of the Options described pursuant to clause (i). Each holder of an Option who is a participant in the Company's Special Executive Deferred Compensation Plan may elect before the Offer commences to surrender any Option that is not immediately exercisable at the time of the holder's election and receive, for each Share that would have been issuable on exercise of such Option, a credit in the Special Executive Deferred Compensation Plan equal to the excess of (x) the Common Stock were subject to issuance pursuant to outstanding Company Options Consideration over (as defined belowy) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) per Share exercise price of the Company Disclosure Schedule (Option as in effect at the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or time of the election. Such credit shall be funded pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares change of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as control provisions of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleSpecial Executive Deferred Compensation Plan.

Stock Options. As of the close of business on the Reference Date: (ia) 7,785,062 The Company shall take all actions necessary to provide that all outstanding options to acquire shares of Company Common Stock were subject ("Options") granted under any stock option plan, program or similar arrangement of the Company or any of its Subsidiaries, each as amended (the "Stock Option Plans"), shall become fully exercisable and vested immediately prior to issuance the Effective Time whether or not otherwise exercisable and vested. The Company shall comply with the terms of the Stock Option Plans, as applicable, and, to the extent required thereunder, provide written notice to the holders of Options that such Options shall be treated as set forth herein. All Options which are outstanding immediately prior to the Effective Time shall be canceled and become null and void and the holders thereof shall be entitled to elect (1) to receive from the Company at the same times and in the same manner as the Company Stockholders pursuant to outstanding this Article III, for each Option to acquire one share of Company Options Common Stock, (as defined belowA) an amount in cash equal to purchase (x) the cash payable to the holder of one share of Company Common Stock under pursuant to Section 3.2 assuming all Options had been exercised prior to the applicable Effective Time minus (y) the exercise price per share of such Option (the "Exercise Difference"), plus (B) certificates representing that number of shares of Buyer Class A Common Stock which the holder of one share of Company Benefit Plans that are stock plans Common Stock would have the right to receive pursuant to Sections 3.1 and 3.2 as adjusted as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant 3.3 hereof assuming all Options had been exercised prior to the Company Stock PlansEffective Time, other than Company Restricted Stock or Company Restricted Stock Units, are referred plus (C) Warrants in an amount issued to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a one share of Company Common Stock as determined on pursuant to Section 3.5, plus (D) the date right to receive the Contingent Additional Consideration that may be payable to the holder of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a one share of Company Common Stock on pursuant to Section 3.4, or (2) if the applicable date of grant. As of Exercise Difference is negative, as a condition for receiving the Reference DateBuyer Class A Common Stock, there are no outstanding or authorized stock appreciationthe Warrants and the right to receive the Contingent Additional Consideration under clause (1) above, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth pay such difference in Sections 2.2(b) and (c) of cash to the Company Disclosure Scheduleon or before the Closing Date. All applicable withholding taxes attributable to the payments made hereunder or to distributions contemplated hereby shall be deducted from the amounts payable under clause (A) above or by payment of cash by the Option holder if amounts payable under clause (A) are insufficient. (b) The Stock Option Plans shall terminate immediately prior to the Effective Time.

Stock Options. As of the close of business on the Reference Datedate hereof: (i) 7,785,062 21,388,695 shares of Company Common Stock were are subject to issuance pursuant to outstanding Company Options (as defined below) options to purchase Company Common Stock (such options to purchase Company Common Stock, whether or not outstanding, “Company Options”) under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule Company’s 1998 Equity Incentive Plan, 1999 Executive Equity Incentive Plan, 2000 Equity Incentive Plan and Bluelark 2000 Equity Incentive Plan (collectively, the “Company Stock Plans”) or otherwise (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to than the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”Purchase Plan), ; and (ii) 7,748,679 as of the date hereof, 1,237,661 shares of Company Common Stock are reserved for future issuance under the Company Stock PlansPurchase Plan. Section 2.2(b) of the Company has made available to Parent Disclosure Letter sets forth a true, complete and correct list of each outstanding Company Option outstanding as of issued other than pursuant to the Reference DateCompany Purchase Plan, and (1a) the particular Company Stock Plan (if any) pursuant to which such Company Option was granted), (2b) the name of the holder of such Company Option, (3c) the number of shares of Company Common Stock subject to such Company Option, (4d) the exercise price of such Company Option, (5e) the date on which such Company Option was granted, (6f) the applicable vesting schedule, and the extent to which such Company Option was is vested and exercisable as of the Reference Datedate hereof, and (7g) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under pursuant to the applicable exercise of Company Benefit PlansOptions and the Company Purchase Plan, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuedissuable, are duly authorized and will be duly authorized, validly issued, fully paid and nonassessable. All grants There are no commitments or agreements of any character to which the Company Options were validly issued and properly approved by is bound obligating the Board Company to accelerate the vesting of Directors of any Company (or Option as a duly authorized committee or subcommittee thereof) in material compliance with the terms result of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on Merger (whether alone or upon the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)occurrence of any additional or subsequent events). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleCompany.

Stock Options. As (a) Except as otherwise agreed to in writing between the Company and the holder of the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to any outstanding Company Options (as defined below) options to purchase Company Common Stock ("Options"), and as consented to by Merger Sub, immediately prior to the Effective Time, each outstanding Option granted under the applicable Company Benefit Company's Incentive Stock Option Plans that are stock plans as set forth in Section 2.12(b) of whether or not then exercisable, shall be canceled by the Company, and at the Effective Time, the former holder thereof shall receive from the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant consideration for such cancellation an amount in cash equal to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred product of (i) the number of Shares previously subject to in this Agreement as “Company Options”), such Option and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a trueexcess, complete and correct list of each Company Option outstanding as if any, of the Reference DateMerger Consideration over the exercise price per share, and (1) the particular Company Stock Plan pursuant to which such Company Option was grantedif any, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock previously subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved reduced by the Board amount of Directors of Company withholding or other taxes required by law to be withheld (or a duly authorized committee or subcommittee thereof) in material compliance the "Net Value"); provided, however, that with respect to the individuals listed on Schedule 1.5 (as such schedule may be amended by Merger Sub, with the terms consent of any affected individual, from time to time prior to the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(bEffective Time)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price , Options held by each such individual representing an aggregate Net Value of each Company Option is not less than the fair market value of a share of Company Common amount set forth opposite such person's name on Schedule 1.5 shall be retained and shall not be cancelled. (b) Except as provided herein or as otherwise agreed by the parties, the Company's Incentive Stock as determined on Option Plans and any provision under all other plans, programs or arrangements providing for the date of issuance or grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 any other interest in respect of the Code so qualifies capital stock of the Company or any Subsidiary shall terminate as of the Effective Time, and the per share exercise price of each Company shall ensure that following the Effective Time, no current or former employee or director shall have any Option was not less than to purchase Shares or any other equity interest in the fair market value of a share of Company Common Stock on the applicable date of grant. As under any of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and Company's Incentive Stock Option Plans. (c) Prior to the Effective Time, the board of directors of the Company Disclosure Schedule(the "Board of Directors") (or, if appropriate, any committee administering the Company's Incentive Stock Option Plans) shall adopt such resolutions or take such actions as are necessary to carry out the terms of this Section 1.5.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to At the Effective Time, each outstanding Company Options (as defined below) option to purchase Company Common Stock Shares (a "Company Option") under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock whether vested or Company Restricted Stock Unitsunvested, are referred shall be deemed to in this Agreement constitute an option to acquire, on the same terms and conditions as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance were applicable under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted(except to the extent such terms and conditions are altered in accordance with their terms as a result of the consummation of the transactions contemplated by this Agreement), the same number of shares of SBC Common Stock as the holder of such Company Option would have been entitled to receive pursuant to the Merger had such holder exercised such Company Option in full immediately prior to the Effective Time (2rounded down to the nearest whole number) (a "Substitute Option"), at an exercise price per share (rounded up to the nearest whole cent)(the "Substitute Option Price") equal to (y) the name aggregate exercise price for the Company Shares otherwise purchasable pursuant to such Company Option divided by (z) the number of full shares of SBC Common Stock deemed purchasable pursuant to such Company Option in accordance with the foregoing. For each Substitute Option substituted for a Company Option that included a right under certain circumstances to receive dividend equivalents in the form of stock units ("Company Stock Units"), all Company Stock Units credited to the account of the holder of such Company OptionSubstitute Option at the Effective Time shall, as of the Effective Time, be deemed to constitute a number of stock units, each of which shall represent one share of SBC Common Stock (3) "SBC Stock Units"), equal to the number of shares of Company SBC Common Stock subject the holder of such Substitute Option would have been entitled to receive pursuant to this Agreement had such Company Stock Units been distributed to such Company Option, (4) holder in full immediately prior to the exercise price Effective Time and thereafter SBC Stock Units shall continue to be credited to the account of the holder of such Company Option, (5) Substitute Option to the date on which such Company Option was granted, (6) the applicable vesting schedule, same extent and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the same terms and conditions specified as they would have under the Company Option for which the Substitute Option was substituted (except that the record dates and dividend amounts shall be the record dates and dividend amounts for SBC Common Stock), and all such SBC Stock Units shall be distributed at the same times and in the instruments same manner as the Company Stock Units would have been distributed had the Substitute Option not been substituted for the Company Option (except that the option price used to determine if the SBC Stock Units can be distributed shall be the Substitute Option Price). At or prior to the Effective Time, the Company shall make all necessary arrangements with respect to the Company Stock Plans to permit the assumption of the unexercised Company Options by SBC pursuant to which they are issued, are duly authorized this Section and will be validly issued, fully paid as soon as practicable after the Effective Time SBC shall use its best efforts to register under the Securities Act on Form S-8 or other appropriate form (and nonassessable. All grants of Company Options were validly issued and properly approved by use its best efforts to maintain the Board of Directors of Company (or a duly authorized committee or subcommittee effectiveness thereof) shares of SBC Common Stock issuable pursuant to all Substitute Options. (ii) Effective at the Effective Time, SBC shall assume each Company Option in material compliance accordance with the terms of the applicable Company Benefit Stock Plan under which it was issued and all applicable Legal Requirements and recorded on the stock option agreement by which it is evidenced. As promptly as practicable after the Effective Time, the Company Financials (as defined shall deliver to the participants in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each the Stock Plans appropriate notices setting forth such participants' rights pursuant to such assumed Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleOptions.

Stock Options. As of (a) At the close of business on the Reference Date: (i) 7,785,062 Effective Time, all outstanding and unexercised employee and director options to purchase shares of Company Common Stock were subject (each, a “Company Stock Option”) will vest and then cease to issuance pursuant to outstanding Company Options (as defined below) represent an option to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “and will be converted automatically into options to purchase Purchaser Common Stock, and Purchaser will assume each Company Stock Plans”Option subject to its terms; provided, however, that after the Effective Time: (i) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 number of shares of Company Purchaser Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list purchasable upon exercise of each Company Stock Option outstanding as will equal the product of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3i) the number of shares of Company Common Stock subject to such that were purchasable under the Company Option, Stock Option immediately before the Effective Time and (4ii) the Exchange Ratio, rounded down to the nearest whole share; and (ii) the per share exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of for each Company Stock Option is not less than will equal the fair market value quotient of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and (i) the per share exercise price of the Company Stock Option in effect immediately before the Effective Time and (ii) the Exchange Ratio, rounded up to the nearest cent. (b) Notwithstanding the foregoing, (i) the exercise price and the number of shares of Purchaser Common Stock purchasable pursuant to the Company Stock Options shall be determined in a manner consistent with any applicable requirements of Section 409A of the Code and (ii) in the case of any Company Stock Option to which Section 422 of the Code applies, the exercise price and the number of shares of Purchaser Common Stock purchasable pursuant to such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. Except as specifically provided above, following the Effective Time, each Company Stock Option was not less than shall continue to be governed by the fair market value of a share of same terms and conditions as were applicable under such Company Common Stock on Option immediately prior to the applicable date of grantEffective Time (after giving effect to any rights resulting from the transactions contemplated under this Agreement pursuant to the Company Stock Plans and the award agreements thereunder). As of used in this Agreement, the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to term “Company other than as Stock Plans” means the plans set forth in Sections 2.2(b) and (cSection 1.5(b) of the Company Disclosure Schedule.

Stock Options. As of (a) At the close of business on Effective Time, all options granted by the Reference Date: Company (i"Company Options") 7,785,062 to purchase shares of Company Common Stock were which are outstanding and unexercised immediately prior thereto shall, at the Company's election to be made by written notice to the Buyer within 30 days of the date hereof, be converted, in their entirety, automatically into either options to purchase shares of Buyer Common Stock in an amount and at an exercise price determined as provided below (and otherwise subject to issuance pursuant to outstanding Company Options the terms of the Company's 1986 and 1993 Stock Option and Incentive Plans and the Company's 1997 Directors Stock Option Plan and 1997 Stock Compensation Plan (as defined belowcollectively, the "Company's Stock Plans")) to purchase Company or shares of Buyer Common Stock under in an amount and at an exercise price determined as provided below, provided, however, that such conversion does not impair the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) pooling of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and interests accounting treatment: (1) The number of shares of Buyer Common Stock to be subject to the particular new options or to the exchange for Company Stock Plan pursuant Options shall be equal to which such Company Option was granted, (2) the name product of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to the original options and the Exchange Ratio, provided that any fractional shares of Buyer Common Stock resulting from such multiplication shall be rounded down to the nearest share; and (2) The exercise price per share of the Company OptionOptions if exchanged for shares of Buyer Common Stock, (4) or of Buyer Common Stock under the new options if exchanged for options for Buyer Common Stock shall be equal to the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares per share of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved original option divided by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. The adjustment provided herein with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials respect to any options which are "incentive stock options" (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code so qualifies of 1986, as amended (the "Code")) shall be and the per share exercise price of each Company Option was not less than the fair market value of is intended to be effected in a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards manner which is consistent with respect to Company other than as set forth in Sections 2.2(b) and (cSection 424(a) of the Code. The duration and other terms of the new option shall be the same as the original option, except that all references to the Company Disclosure Scheduleshall be deemed to be references to Buyer.

Stock Options. As (a) Each of the close Company's stock option plans, each of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as which is set forth in Section 2.12(b3.5(a) of the Company Disclosure Schedule (the “Company Stock Plans”as defined in Section 5.1) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock "Option Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”"), and (ii) 7,748,679 each option to acquire shares of Company Common Stock are reserved for future issuance under outstanding immediately prior to the Company Stock Plans. Company has made available to Effective Date thereunder, whether vested or unvested (each, an "Option" and collectively, the "Options"), shall be assumed by the Parent a true, complete and correct list of each Company Option outstanding as of at the Reference Effective Date, and each such Option shall become an option to purchase a number of shares of Parent Common Stock (1a "Substitute Option") (rounded to the particular Company Stock Plan pursuant nearest whole share, with 0.5 shares being rounded up) equal to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved multiplied by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials Option Exchange Ratio (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)below). The per share exercise price of for each Company Substitute Option is not less than shall be the fair market value of a current exercise price per share of Company Common Stock as determined on divided by the date of grant of such Company Option. Each Company Option intended Exchange Ratio (rounded up to qualify as an “incentive stock option” under Section 422 the nearest full cent), and each Substitute Option otherwise shall after the Effective Date be subject to all of the Code so qualifies other terms and conditions of the original Option to which it relates (including, without limitation, all provisions relating to acceleration of vesting). Prior to the Effective Date, the Company shall take such additional actions as are necessary under applicable law and the per share exercise price of applicable agreements and Option Plans to ensure that each Company outstanding Option was not less than shall, from and after the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Effective Date, there are no outstanding or authorized stock appreciationrepresent only the right to purchase, phantom stockupon exercise, profit participation or other similar rights or equity based awards with respect to Company other than shares of Parent Common Stock. Except as set forth in Sections 2.2(b) and (cSection 3.5(a) of the Company Disclosure Schedule, the vesting of no Option shall be accelerated by reason of the Merger unless the agreement or arrangement under which it was granted or by which it is otherwise governed specifically provides for such acceleration. For avoidance of doubt, it is the intention of Parent and the Company that the Substitute Options be identical in all respects to the Options (except for the number and type of shares for which they shall be exercisable and the exercise price thereof) and that, without limitation, (i) all terms of the plans under which such Options were issued and (ii) all policies set forth in Sections 3.5 and 5.8 of the Company Disclosure Schedule, shall apply thereto from and after the Effective Date. (b) For purposes of this Amended and Restated Agreement, the term "Option Exchange Ratio" shall mean the ratio of (x) $20.50 to (y) the average of the closing prices per share of the Parent Common Stock on the New York Stock Exchange, as reported in the Wall Street Journal, for each of the ten trading days immediately preceding the Effective Date.

Stock Options. As of (a) Except as provided in (b) below with respect to the close of business on the Reference Date: (i) 7,785,062 Company's Employee Stock Purchase Plan, each option to purchase shares of Company Common Stock were subject to issuance pursuant to that is outstanding at the Effective Time, whether or not exercisable and whether or not vested (a "Company Options (as defined belowOption") to purchase Company Common Stock under shall, by virtue of the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) Merger and without any action on the part of the Company Disclosure Schedule or the holder thereof, be assumed by Parent in such manner that Parent (i) is a corporation "assuming a stock option in a transaction to which Section 424(a) applies" within the “Company Stock Plans”) (equity meaning of Section 424 of the Code and the regulations thereunder or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under to the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as extent that Section 424 of the Reference Date, and (1) the particular Company Stock Plan pursuant Code does not apply to which such Company Option was granted, (2) the name of the holder of any such Company Option, would be such a corporation were Section 424 of the Code applicable to such Company Option. Prior to the Effective Time, the Company's Board of Directors and Compensation Committee thereof shall adopt resolutions preventing the value of any outstanding Company Options, stock appreciation rights, restricted stock, performance units or other stock based awards from being paid in cash to the holders thereof. From and after the Effective Time, all references to the Company in the Company Options shall be deemed to refer to Parent. The Company Options assumed by Parent shall be exercisable upon the same terms and conditions as under the Company Options (3including provisions regarding vesting and the acceleration thereof, and if and to the extent caused by and in accordance with the current terms of a Company Option, such Company Option shall vest fully as of the date on which the Merger is approved by the Company's shareholders) except that (i) such Company Options shall entitle the holder to purchase from Parent the number of shares of Parent Common Stock (rounded down to the nearest whole number of such shares) that equals the product of the Conversion Ratio multiplied by the number of shares of Company Common Stock subject to such Company OptionOption immediately prior to the Effective Time, and (4ii) the option exercise price per share of Parent Common Stock shall be an amount (rounded up to the nearest full cent) equal to the option exercise price per share of Company Common Stock in effect immediately prior to the Effective Time divided by the Conversion Ratio. Prior to the Effective Time, the Board of Directors of the Parent shall, for purposes of Rule 16b-3(d)(1) promulgated under Section 16 of the 1934 Act, specifically approve (i) the assumption by Parent of the Company Options and (ii) the issuance of Parent Common Stock in the Merger to directors, officers and shareholders of the Company subject to Section 16 of the 1934 Act. As promptly as practicable after the Effective Time, Parent shall issue to each holder of a Company Option a written instrument informing such holder of the assumption by Parent of such Company Option. As soon as reasonably practicable after the Effective Time (and in any event no later than five business days after the Effective Time), Parent shall file a registration statement on Form S-8 (5or any successor form) with respect to such shares of Parent Common Stock and shall use its best efforts to maintain such registration statement (or any successor form), including the date current status of any related prospectus or prospectuses, for so long as the Company Options remain outstanding. In addition, Parent shall use all reasonable efforts to cause the shares of Parent Common Stock subject to Company Options to be listed on which the NYSE and such other exchanges as Parent shall determine. Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Option was granted, Options pursuant to the terms set forth in this Section 1.7. (6b) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable The current phase in process as of the Reference Datedate of this Agreement under the Company's Employee Stock Purchase Plan shall continue and shares shall be issued to participants thereunder as provided under, and (7) subject to the date on which terms and conditions of, such Company Option expires. All Plan; provided, however, that if the Effective Time occurs prior to the originally scheduled expiration of such current phase, then immediately prior to the Effective Time, the current phase under the Company's Employee Stock Purchase Plan shall be ended, and each participant shall be deemed to have purchased immediately prior to the Effective Time, to the extent of payroll deductions accumulated by such participant as of such phase end, the number of whole shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments at a per share price determined pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms provisions of the applicable Company Benefit Plan Company's Employee Stock Purchase Plan, and all applicable Legal Requirements and recorded on each participant shall receive a cash payment equal to the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b))balance, if any, of such accumulated payroll deductions remaining after such purchase of such shares. The exercise price As of the Effective Time, each Company Option is not less than participant shall receive by virtue of the fair market value of a Merger, for each share of Company Common Stock such participant has so purchased under the Employee Stock Purchase Plan, such number of shares of Parent Common Stock equal to the Conversion Ratio. No phases under the Company's Employee Stock Purchase Plan that are subsequent to the phase in process as determined on of the date of grant of such Company Option. Each Company Option intended to qualify this Agreement shall be commenced, and, the Company's Employee Stock Purchase Plan and all purchase rights thereunder shall terminate effective as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleEffective Time.

Stock Options. As Subject to the absolute authority of the close Stock Option Committee of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of the Company from time to time to grant (or not to grant) to eligible individuals options to purchase common stock of the Company (or a duly authorized committee or subcommittee thereof) "Options"), it is the intention of the Company and the expectation of the Executive that 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 material compliance with the terms hereof with any terms and conditions in any stock option agreement): (a) Target awards will be in an amount (plus or minus 25%) equal to 150% of Executive's salary; (b) For purposes of determining the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on number of shares 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 Financials for its senior executives; (as defined in Section 2.4(b)c) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price per share of each Company Option is not less than the Options shall be the fair market value of a share of Company Common Stock as determined the common stock on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 grant, and the Options shall expire on the tenth anniversary of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As ; and (d) The Options shall vest ratably on the first three anniversaries of the Reference Datedate of grant; provided, there however, that all such Options and all other options to purchase Common Shares then held by the Executive which are no outstanding or authorized stock appreciationnot then vested (in the aggregate being referred to herein as "Accelerated Options") shall become fully vested and immediately exercisable during the remaining original term of each such Accelerated Option, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) 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 Disclosure Schedulewithout Cause or by the Executive for Good Reason; and (e) The Options shall be granted on such other terms and conditions as are generally made applicable to Options granted to the other senior executives of the Company.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to At the Effective Time, each outstanding Company Options (as defined below) option to purchase Company Common Stock Shares (a "Company Option") under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than whether vested or unvested, shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Restricted Stock or Company Restricted Stock UnitsOption, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 the same number of shares of Company Keystone Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option would have been entitled to receive pursuant to the Merger had such holder exercised such Company Option in full immediately prior to the Effective Time (rounded down to the nearest whole number) (a "Substitute Option"), at an exercise price per share (3rounded up to, the nearest whole cent) equal to (y) the aggregate exercise price for the Company Shares otherwise purchasable pursuant to such Company Option divided by (z) the number of full shares of Company Keystone Common Stock subject deemed purchasable pursuant to such Company OptionOption in accordance with the foregoing. At or prior to the Effective Time, the Company shall make all necessary arrangements with respect to the Stock Plans, including any necessary amendments thereto, to permit the assumption of the unexercised Company Options by Keystone pursuant to this Section and no later than the Effective Time Keystone shall register under the Securities Act of 1933 on Form S-8 or other appropriate form (4and use its best efforts to maintain the effectiveness thereof) shares of Keystone Common Stock issuable pursuant to all Substitute Options. As promptly as practicable after the exercise price of Effective Time, the Company shall deliver to the participants in the Stock Plans appropriate notices setting forth such participants' rights pursuant to such assumed Company OptionOptions. (ii) Effective at the Effective Time, (5) the date on which such Keystone shall assume each Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance accordance with the terms of the applicable Company Benefit Stock Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies which it was issued and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleoption agreement by which it is evidenced.

Stock Options. As of (a) At the close of business on the Reference Date: (i) 7,785,062 shares of Company Effective Time, each outstanding option to purchase Drilex Common Stock were subject to issuance that has been granted pursuant to outstanding Company Options the Drilex Stock Plan (as defined below"Drilex Stock Option") to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans shall be treated as set forth in this Section 2.12(b) 5.10. Drilex shall not grant any stock appreciation rights or limited stock appreciation rights and shall not permit cash payments to holders of Drilex Stock Options in lieu of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to treatment thereof as provided in this Agreement as “Company Options”)Section 5.10. (b) The portion, and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a trueif any, complete and correct list of each Company Drilex Stock Option outstanding that is exercisable as of the Reference DateEffective Time in accordance with the terms thereof shall be assumed by Bake▇ ▇▇▇h▇▇. ▇▇ so assumed, such option shall be deemed to constitute an option to acquire, on the same terms and (1) the particular Company conditions as were applicable under such Drilex Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) a number of shares of Bake▇ ▇▇▇h▇▇ ▇▇▇mon Stock equal to the number of shares of Company Drilex Common Stock purchasable pursuant to such exercisable portion of such Drilex Stock Option multiplied by the Exchange Ratio, at a price per share equal to the per-share exercise price for the shares of Drilex Common Stock purchasable pursuant to such Drilex Stock Option divided by the Exchange Ratio; provided, however, that in the case of any option to which Section 421 of the Code applies by reason of its qualification under any of sections 422-424 of the Code, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code; and provided further, that the number of shares of Bake▇ ▇▇▇h▇▇ ▇▇▇mon Stock that may be purchased upon exercise of such Drilex Stock Option shall not include any fractional share and, upon exercise of such Drilex Stock Option, a cash payment shall be made for any fractional share based upon the closing price of a share of Bake▇ ▇▇▇h▇▇ ▇▇▇mon Stock on the NYSE on the 27 34 last trading day of the calendar month immediately preceding the date of exercise. After the Effective Time, except as provided above in this Section 5.10(b), each assumed option shall be exercisable upon the same terms and conditions as were applicable to the related Drilex Stock Option immediately prior to the Effective Time. (c) Drilex shall take all reasonable action as may be required such that the portion, if any, of each Drilex Stock Option that is not exercisable as of the Effective Time (an "Unexercisable Option") shall be canceled in exchange for the number of shares of Bake▇ ▇▇▇h▇▇ ▇▇▇mon Stock, decreased to the nearest whole share, having an aggregate market value at the Effective Time (based on the Average Closing Price) equal to the number of shares of Drilex Common Stock subject to such Company OptionUnexercisable Option multiplied by the excess, (4) if any, of the Drilex Value over the per-share exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and thereof. To the extent the terms of an Unexercisable Option allow for withholding to which satisfy tax obligations, such Company Option was vested and exercisable as rights shall apply to the consideration provided for by this Section 5.10(c). (d) Bake▇ ▇▇▇h▇▇ ▇▇▇ll take all corporate action necessary to reserve for issuance a sufficient number of shares of Bake▇ ▇▇▇h▇▇ ▇▇▇mon Stock for delivery upon exercise of the Reference DateDrilex Stock Options assumed in accordance with this Section 5.10. As soon as practicable after the Effective Time, and Bake▇ ▇▇▇h▇▇ ▇▇▇ll file with the SEC a registration statement on Form S-8 (7or any successor form) or another appropriate form with respect to the date on which such Company Option expires. All shares of Company Common Bake▇ ▇▇▇h▇▇ ▇▇▇mon Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on Drilex Stock Options and shall use its best efforts to maintain the terms effectiveness of such registration statement or registration statements (and conditions specified in maintain the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms current status of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (prospectus or prospectuses contained therein) for so long as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Drilex Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleOptions remain outstanding.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 shares of Each Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance Option under the Company Stock Plans. Company has made available to Parent a truePlans shall, complete and correct list of each Company Option outstanding as at the Effective Time, in accordance with the terms of the Reference Date, and (1) the particular Company Stock Plan Plans pursuant to which such Company Option was grantedOptions were issued, (2) be deemed to constitute options to acquire, on the name of the holder of same terms and conditions as were applicable under such Company OptionOptions immediately prior to the Effective Time, (3) the a number of shares of Parent Common Stock equal to the product (rounded down to the nearest whole number) obtained by multiplying (x) the number equal to the number of Shares the holder of each such Company Option would have been entitled to receive immediately prior to the Effective Time had such holder exercised such Company Option in full (assuming for such purposes that such Company Option was fully exercisable at such time) immediately prior to the Effective Time and (y) the Exchange Ratio, at a price per share of Parent Common Stock (rounded up to the nearest whole cent) equal to (A) the aggregate exercise price for the Shares otherwise purchasable pursuant to each such Company Option (assuming for such purposes that such Company Option was fully exercisable at such time) divided by (B) the 38 44 number of full shares of Parent Common Stock deemed purchasable pursuant to each such Company Option in accordance with the foregoing; provided, however, the term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Code, if applicable, and all of the other terms of the Options shall otherwise remain unchanged, and any such adjustment for a Company option intended to be an incentive stock option shall comply with Section 422 of the Code. (ii) At or prior to the Effective Time, the Company shall make all necessary arrangements with respect to the Company Stock Plans to permit the assumption of the Company Options by Parent. Effective at the Effective Time, Parent shall assume each Company Option in accordance with the terms of the Stock Plans under which it was issued and the stock option agreement by which it is evidenced. At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Options. As soon as practicable after the Effective Time, Parent shall file a registration statement on Form S-8, or, if unavailable, a registration statement on Form S-3 (or any successor forms), or another appropriate form with respect to the Parent Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting scheduleOptions, and shall use its commercially reasonable efforts to cause such registration statement to become and remain effective (and maintain the extent to which such Company Option was vested and exercisable as current status of the Reference Dateprospectus or prospectuses contained therein), and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the as well as comply with any applicable Company Benefit Plansstate securities or "blue sky" laws, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of for so long as any Company Options were validly issued and properly approved by remain outstanding. (iii) Prior to the Effective Time, the Board of Directors of Parent shall take all actions necessary to ensure that the options to purchase Parent Common Stock (resulting from Company (or a duly authorized committee or subcommittee thereofOptions) in material compliance with held by the terms officers and directors of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in this Section 2.4(b)). The exercise price 7.11(a) shall be exempt for purposes of each Company Option is not less than Rule 16b-3 under the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleExchange Act.

Stock Options. As of (a) At the close of business on the Reference Date: (i) 7,785,062 Effective Time, all rights with respect to shares of Company Common Stock that were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock issuable upon the exercise of options granted under the applicable Company Benefit Plans that are stock option plans as and other options set forth in Section 2.12(bon SECTION 3.02(b) of the Company Disclosure Schedule (collectively, the “"COMPANY OPTIONS") and warrants set forth on SECTION 3.02(b) of the Disclosure Schedule (collectively, the "COMPANY WARRANTS") then outstanding, shall be converted into and become rights with respect to Veeco Shares, and Veeco shall assume each such Company Stock Plans”Option and Company Warrant in accordance with the terms (as in effect as of the date of this Merger Agreement) (equity of the stock option plan, warrant instrument or other equity-based awardsarrangement under which it was issued and the terms of the stock option agreement or other document by which it is evidenced. From and after the Effective Time, whether payable in cash(i) each Company Option and Company Warrant assumed by Veeco may be exercised by the holder thereof solely for Veeco Shares, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares the number of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available Veeco Shares subject to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, or Company Warrant shall be equal to the product of (2) the name of the holder of such Company Option, (3a) the number of shares of Company Common Stock subject to such Company OptionOption or Company Warrant immediately prior to the Effective Time multiplied by (b) 0.184, rounding to the nearest whole share, (4iii) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price under each such Company Option or Company Warrant shall be adjusted by dividing (x) the per share exercise price under such Company Option or Company Warrant by (y) 0.184 and rounding to the nearest cent and (iv) any restriction on the exercise or transfer of any such Company Option or Company Warrant shall continue in full force and effect in accordance with its terms and the term, exercisability, vesting schedule and other provisions of or relating to such Company Option or Company Warrant shall otherwise remain unchanged; PROVIDED, HOWEVER, that each Company Option was not less than the fair market value of a share of and Company Common Stock on the applicable date of grant. As of the Reference DateWarrant assumed by Veeco in accordance with this Section 5.15(a) shall, there are no outstanding or authorized in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock appreciationsplit, phantom stockstock dividend, profit participation reverse stock split, reclassification, recapitalization or other similar rights or equity based awards transaction subsequent to the Effective Time. Veeco shall file with the SEC, no later than the date on which the Merger becomes effective, a registration statement on Form S-8 relating to the Veeco Shares issuable with respect to the Company Options assumed by Veeco in accordance with this Section 5.15(a). (b) Prior to the Effective Time, the Company shall take all action that may be necessary (under the plans and instruments pursuant to which Company Options and Company Warrants are outstanding and otherwise) to effectuate the provisions of this Section 5.15 and to ensure that, from and after the Effective Time, holders of Company Options and Company Warrants have no rights with respect thereto other than as set forth those specifically provided in Sections 2.2(b) and (c) of the Company Disclosure Schedulethis Section 5.15.

Stock Options. As of (a) At the close of business on Effective Time, each option granted by the Reference Date: Company (ia "Company Option") 7,785,062 to purchase shares of Company Common Stock were subject to issuance pursuant to which is outstanding Company Options and unexercised (as defined belowwhether vested or unvested) immediately prior thereto shall be assumed by Buyer and converted automatically into an option (a "Buyer Option") to purchase Company shares of Buyer Common Stock under in an amount and at an exercise price determined as provided below (and otherwise subject to the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) terms of the Company's 1994 Stock Incentive Plan and the Company's 1997 Independent Directors' Stock Option Plan (collectively, the "Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”"), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and ): (1) the particular Company number of shares of Buyer Common Stock Plan pursuant to which such Company Option was granted, (2) be subject to the name new option shall be equal to the product of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to the original option and the Exchange Ratio, provided that any fractional shares of Buyer Common Stock resulting from such Company Option, multiplication shall be rounded down to the nearest whole share; and (42) the exercise price per share of such Company Option, (5) Buyer Common Stock under the date on which such Company Option was granted, (6) new option shall be equal to the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares exercise price per share of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved original option divided by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance Exchange Ratio, provided that such exercise price shall be rounded up to the nearest whole cent. The adjustment provided herein with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials respect to any options which are "incentive stock options" (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code) shall be and is intended to be effected in a manner which is consistent with Section 424(a) of the Code and, to the extent it is not so qualifies consistent, such Section 424(a) shall override anything to the contrary contained herein. The duration and other terms of the per share exercise price new option shall be the same as the original option, except that all references to the Company shall be deemed to be references to Buyer. (b) Buyer shall take all corporate action necessary to reserve for issuance a sufficient number of each Company Option was not less than the fair market value shares of a share of Company Buyer Common Stock for delivery upon exercise of Buyer Options, and, at or prior to the Effective Time, Buyer shall file a registration statement on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation Form S-8 (or other similar rights or equity based awards appropriate form) with respect to Company other than the shares of Buyer Common Stock subject to Buyer Options, and shall use its best efforts to maintain the effectiveness of such registration statement for so long as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleany Buyer Options remain outstanding.

Stock Options. (a) As soon as practicable following -------------- the date of this Agreement, the Board of Directors of the close of business on Company (or, if appropriate, any committee administering the Reference Date: Company Stock Plans) shall adopt such resolutions or take such other actions as may be required to effect the following: (i) 7,785,062 adjust the terms of all outstanding options to purchase shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined belowthe "Stock Options") granted under any plan or arrangement providing for the grant of options to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under to current or former officers, directors, employees or consultants of the Company or its Subsidiaries (the "Company Stock Plans. Company has made available "), whether vested or unvested, as necessary to Parent a trueprovide that, complete and correct list of at the Effective Time, each Company Stock Option outstanding immediately prior to the Effective Time shall be amended and converted into an option to acquire, on the same terms and conditions as of were applicable under the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, the number of shares of Parent Common Stock (3rounded down to the nearest whole share) determined by multiplying the number of shares of Company Common Stock subject to such Company OptionStock Option by the Exchange Ratio, at a price per share of Parent Common Stock equal to (4A) the aggregate exercise price of such Company Option, (5) for the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments otherwise purchasable pursuant to which they are issuedsuch Stock Option divided by (B) the aggregate number of shares of Parent Common Stock deemed purchasable pursuant to such Stock Option (each, are duly authorized and will as so adjusted, an "Adjusted Option"); provided that such exercise price shall be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by rounded up -------- to the Board of Directors of Company nearest whole cent; and (or a duly authorized committee or subcommittee thereofii) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on make such other changes to the Company Financials Stock Plans as Parent and the Company may agree are appropriate to give effect to the Merger. (b) The adjustments provided herein with respect to any Stock Options that are "incentive stock options" as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies shall be and the per share exercise price of each Company Option was not less than the fair market value of are intended to be effected in a share of Company Common Stock on the applicable date of grant. As manner which is consistent with Section 424(a) of the Reference DateCode. (c) At the Effective Time, there are no outstanding or authorized stock appreciationby virtue of the Merger and without the need of any further corporate action, phantom stockParent shall assume the Company Stock Plans, profit participation or other similar rights or equity based awards with the result that all obligations of the Company under the Company Stock Plans, including with respect to Stock Options outstanding at the Effective Time, shall be obligations of Parent following the Effective Time. Prior to the Effective Time, Parent shall take all necessary actions (including, if required to comply with Section 162(m) of the Code (and the regulations thereunder) or applicable law or rule of the NYSE, obtaining the approval of its shareholders at the next regularly scheduled annual meeting of Parent following the Effective Time) for the assumption of the Company Stock Plans, including the reservation, issuance and listing of Parent Common Stock in a number at least equal to the number of shares of Parent Common Stock that will be subject to the Adjusted Options. (d) As soon as practicable following the Effective Time, Parent shall prepare and file with the SEC a registration statement on Form S-8 (or another appropriate form) registering a number of shares of Parent Common Stock equal to the number of shares subject to the Adjusted Options. Such registration statement shall be kept effective (and the current status of the prospectus or prospectuses required thereby shall be maintained) at least for so long as any Adjusted Options or any unsettled awards granted under the Company Stock Plans after the Effective Time, may remain outstanding. (e) As soon as practicable after the Effective Time, Parent shall deliver to the holders of Stock Options appropriate notices setting forth such holders' rights pursuant to the respective Company Stock Plans and the agreements evidencing the grants of such Stock Options and that such Stock Options and agreements shall be assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 5.06 after giving effect to the Merger). (f) A holder of an Adjusted Option may exercise such Adjusted Option in whole or in part in accordance with its terms by delivering a properly executed notice of exercise to Parent, together with the consideration therefor and the United States Federal withholding tax information, if any, required in accordance with the related Company Stock Plan. (g) Except as otherwise contemplated by this Section 5.06 and except to the extent required under the respective terms of the Stock Options, all restrictions or limitations on transfer and vesting with respect to Stock Options awarded under the Company Stock Plans or any other than plan, program or arrangement of the Company or any of its Subsidiaries, to the extent that such restrictions or limitations shall not have already lapsed, shall remain in full force and effect with respect to such options after giving effect to the Merger and the assumption by Parent as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleabove.

Stock Options. As (a) At the Effective Time, each Company Option, other than Cancelled Company Options, then outstanding under any Company Stock Option Plan, whether or not then exercisable, shall be converted into an option to purchase Parent Common Stock in accordance with this Section 2.4(a). Each Company Option so converted shall continue to have, and be subject to, the same terms and conditions (including vesting schedule) as set forth in the applicable Company Stock Option Plan and any agreements thereunder immediately prior to the Effective Time, except that, as of the close of business on the Reference Date: Effective Time, (i) 7,785,062 each Company Option shall be exercisable (or shall become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of the number of shares that were issuable upon exercise of such Company Option immediately prior to the Effective Time multiplied by 0.52 (the "Option Exchange --------------- Ratio"), rounded down to the nearest whole number of shares of Parent Common ----- Stock, (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such Company Option so converted shall be equal to the quotient determined by dividing the exercise price per share of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to at which such Company Option was grantedexercisable immediately prior to the Effective Time by the Option Exchange Ratio, rounded up to the nearest whole cent, and (iii) each Company Option which (a) is outstanding as of the date of this Agreement, (2b) remains outstanding at the name Effective Time, and (c) constitutes an Accelerated Company Option immediately prior to the Effective Time, shall be fully vested and exercisable as to all shares of Parent Common Stock subject thereto. Notwithstanding the foregoing, the conversion of any Company Options which are "incentive stock options," within the meaning of Section 422 of the holder Code, into options to purchase Parent Common Stock shall be made so as not to constitute a "modification" of such Company Options within the meaning of Section 424 of the Code. (b) At the Effective Time, each Cancelled Company Option then outstanding under any Company Stock Option Plan shall be cancelled, and in exchange therefor, shall be converted into an option ("Replacement Option, (3") to purchase ------------------ that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock subject to such the related Cancelled Company OptionOption multiplied by 0.4, (4) rounded down to the nearest whole number of shares of Parent Common Stock, with an exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent per share equal to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Parent Common Stock as determined on of the date of grant of such Company Option. Each the Replacement Option (which shall be as of the close of market on the date of the Effective Time)and otherwise subject to the terms and conditions (including the vesting schedule) that were applicable to the related Cancelled Company Option intended immediately prior to qualify as an “incentive stock option” under Section 422 the Effective Time, and neither the vesting nor exercisability of the Code so qualifies and the per share exercise price of each any Cancelled Company Option was not less than or Replacement Option shall be accelerated except as provided in the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect addendums to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleStock Option Plans.

Stock Options. As of (a) At the close of business on Effective Time, each option granted by the Reference Date: (i) 7,785,062 Company to purchase shares of Company Common Stock were subject to issuance (each a "Company Option") pursuant to outstanding Company Options (as defined below) to purchase Company Common the Company's Stock under the applicable Company Benefit Option Plans that are stock plans as set forth in Section 2.12(b4.2(a) of the Company Disclosure Schedule (the “Company Stock Plans”as hereinafter defined) (equity or other equity-based awardsthe "Company Option Plans") which is outstanding and unexercised, immediately prior thereto, whether payable or not then vested or exercisable, will, at the election of the individual holders of the Company Options be either: (i) cancelled and all rights thereunder be extinguished ("Cancelled Option Holder"), in cash, shares or otherwise, granted under or pursuant consideration for which the Company shall make payment immediately prior to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and Effective Time an amount determined by multiplying (iiA) 7,748,679 the number of shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each underlying such Company Option outstanding as by (B) an amount equal to the excess (if any) of the Reference Date, and (1) the Per Share Consideration, over (2) the exercise price per share of such Company Option; or (ii) converted automatically into an option to purchase shares of ICBC Common Stock ("Continuing Option Holder") in an amount, for a term and at an exercise price determined as provided below (and otherwise subject to the terms of the particular Company Stock Option Plan pursuant to which each such Company Option was grantedissued, the agreements evidencing grants thereunder and any other agreements between the Company and an optionee regarding Company Options which have been delivered to ICBC prior to the date of this Agreement): (2A) the name number of shares to be subject to the holder new option shall be equal to the product of such Company Option, (3) the number of shares of Company Common Stock subject to the Company Option immediately prior to the Effective Time and the Final Exchange Ratio, provided that any fractional shares of ICBC Common Stock resulting from such Company Option, multiplication shall be rounded down to the nearest whole share; (4B) the exercise price per share of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company ICBC Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on new option shall be equal to the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a per share of Company Common Stock as determined on under the date of grant of such Company Option. Each Company Option intended divided by the Final Exchange Ratio, provided that such exercise price shall be rounded up to qualify as an “incentive stock option” under Section 422 the nearest cent; (C) The term or duration of the Code so qualifies and new option shall be the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than same as set forth in Sections 2.2(b) and (c) that of the Company Disclosure Schedule.Option; and

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 At the Effective Time, each Company Option, whether vested or unvested, shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Option, the same number of shares of Company Parent Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company OptionOption would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time (rounded down to the nearest whole number), at a price per share (3rounded up to the nearest whole cent) equal to (y) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Option divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to such Company Option in accordance with the foregoing; provided, however, that in the case of any Company Option to which Section 422 of the Code applies, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. At or prior to the Effective Time, the Company shall make all necessary arrangements with respect to the Company Stock Plans to permit the assumption of the unexercised Company Options by Parent pursuant to this Section. (ii) Effective at the Effective Time, Parent shall assume each Company Option in accordance with the terms of the relevant Company Stock Plan under which it was issued and the stock option agreement by which it is evidenced. At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of the Company Options assumed by it in accordance with this Section. As soon as practicable after the Effective Time, Parent shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor or other appropriate forms), or another appropriate form (or shall cause such Company Option to be deemed to be an option issued pursuant to a Parent Stock Plan for which shares of Parent Common Stock have previously been registered pursuant to an appropriate registration form) with respect to the Parent Common Stock subject to such Company OptionOptions, (4) and shall use its reasonable best efforts to maintain the exercise price effectiveness of such Company Option, registration statements (5and maintain the current status of the prospectus or prospectuses contained therein) the date on which for so long as such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleremain outstanding.

Stock Options. As At the Effective Time, the outstanding options to ------------- purchase an aggregate of the close of business on the Reference Date: (i) 7,785,062 58,731 shares of Company Common Stock (each a "Stock Option") granted under the Company's 1995 Stock Option Plan (the "Company Stock Option Plan"), whether vested or unvested, shall be deemed assumed by the Parent and deemed to constitute an option to acquire, on the same terms and conditions as were subject applicable under such Stock Option prior to issuance the Effective Time (including terms and conditions relating to such Stock Option's term, exercisability, vesting schedule and status as an "incentive stock option" under Section 422 of the Code), the number (rounded down to the nearest whole number) of shares of Parent Common Stock equal to the aggregate of that number of shares of Parent Common Stock (based on the Exchange Ratio) as the holder of such Stock Option would have been entitled to receive pursuant to outstanding Company the Merger had such holder exercised such Option in full immediately prior to the Effective Time (not taking into account whether or not such Option was in fact exercisable). The exercise price for such Stock Options shall be the price per share equal to (as defined belowx) to purchase the aggregate exercise price for Company Common Stock under otherwise purchasable pursuant to such Stock Option divided by (y) the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) number of the Company Disclosure Schedule shares of Parent Common Stock deemed purchasable pursuant to such Stock Option (the “Company exercise price per share, so determined, being rounded up to the nearest full cent). No payment shall be made for fractional shares. The aggregate number of shares of Parent Common Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or issuable upon the exercise of Options assumed by Parent pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are this Section 2.2(c) shall be referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available "Option Shares." Any adjustment to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” option made under this Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards 2.2(c) shall comply with respect to Company other than as set forth in Sections 2.2(b) and (cSection 424(a) of the Company Disclosure ScheduleCode.

Stock Options. As (a) Upon the conversion of the close Company B Stock into Company A Stock as provided in Section 1.2(a) and Section 3.7(a), each FBG Option to purchase one share of business on the Reference Date: (i) 7,785,062 Company B Stock shall be converted into an option to purchase 1.35 shares of Company Common A Stock. (b) At the Effective Time, the holder of an FBG Option that has been properly exercised prior to the Effective Time in accordance with its terms shall be entitled to receive the Merger Consideration in accordance with Section 1.2(b)(iii), for each share of Company A Stock were subject acquired or to issuance be acquired by virtue of the exercise of such FBG Option. (c) At the Effective Time, each FBG Option outstanding pursuant to outstanding Company Options Financial Benefit Group, Inc.'s Non-Qualified Option Plan, whether or not exercisable, and whether or not vested, shall terminate and the Surviving Corporation shall pay to each holder of such an FBG Option cash in an amount equal to the product of: (as defined belowx) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) excess of the Company Disclosure Schedule Merger Consideration (with the “Company Parent Stock Plans”portion of the Merger Consideration valued at the Parent Stock Price and the Parent Warrant portion of the Merger Consideration valued at $.31) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to over the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”)exercise price per Share of such Option, and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3y) the number of shares of Company Common Stock Shares subject to such Company option. (d) At the Effective Time, if the holder of an FBG Option outstanding pursuant to Financial Benefit Group, Inc.'s Equity Incentive Non-Qualified Warrant/Option Program, whether or not exercisable, and whether or not vested, has elected (on or prior to ten days preceding the Effective Time) to receive cash for such Option, such Option shall terminate and the Surviving Corporation shall pay to each holder of such an FBG Option cash in an amount equal to the product of (4x) the excess of the Merger Consideration (with the Parent Stock portion of the Merger Consideration valued at the Parent Stock Price and the Parent Warrant portion of the Merger Consideration valued at $.31) over the exercise price per Share of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7y) the date on which such Company Option expires. All shares number of Company Common Stock Shares subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments such option. (e) The holder of an FBG Option outstanding pursuant to which they are issuedFinancial Benefit Group, are duly authorized Inc.'s Employee Incentive Stock Option Plan, whether or not exercisable, and whether or not vested, will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by given the Board of Directors of opportunity to request the Company (on or a duly authorized committee or subcommittee thereofprior to ten days preceding the Effective Time) to allow such holder to receive cash from the Surviving Corporation for such Option in material compliance an amount equal to the product of (x) the excess of the Merger Consideration (with the terms Parent Stock portion of the applicable Company Benefit Plan Merger Consideration valued at the Parent Stock Price and all applicable Legal Requirements the Parent Warrant portion of the Merger Consideration valued at $.31) over the exercise price per Share of such Option, and recorded on (y) the number of Shares subject to such option. If the Company Financials consents to any such request, such Option shall terminate at the Effective Time and such holder shall receive such amount. (as defined in Section 2.4(b)f) At the Effective Time, if the holder of an FBG Option outstanding pursuant to Financial Benefit Group, Inc.'s Employee Incentive Stock Option Plan, whether or not exercisable, and whether or not vested, has not elected (on or prior to ten days preceding the Effective Time) to receive cash for such FBG Option, such FBG Option shall in accordance with GAAP the provisions of such plan become an option to acquire shares of Parent Stock (as defined in Section 2.4(b)an "ISO Continuing Option"). The exercise price number of each Company Option is not less than the fair market value shares of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Schedule.37

Stock Options. As At the Effective Time, the outstanding options to ------------- purchase an aggregate of the close of business on the Reference Date: (i) 7,785,062 up to 3,545,662 shares of Company Common Stock (each a "Stock Option") granted under the Company's 1995 Stock Plan (the "Company Stock Plan"), whether vested or unvested, shall be deemed assumed by the Parent and deemed to constitute an option to acquire, on the same terms and conditions as were subject applicable under such Stock Option prior to issuance the Effective Time (including terms and conditions relating to such Stock Option's term, exercisability, vesting schedule and status as an "incentive stock option" under Section 422 of the Code), the number (rounded down to the nearest whole number) of shares of Parent Common Stock equal to the aggregate of that number of shares of Parent Common Stock (based on the Exchange Ratio) as the holder of such Stock Option would have been entitled to receive pursuant to outstanding Company the Merger had such holder exercised such Option in full immediately prior to the Effective Time (not taking into account whether or not such Option was in fact exercisable). The exercise price for such Stock Options shall be the price per share equal to (as defined belowx) to purchase the aggregate exercise price for Company Common Stock under otherwise purchasable pursuant to such Stock Option divided by (y) the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) number of the Company Disclosure Schedule shares of Parent Common Stock deemed purchasable pursuant to such Stock Option (the “Company exercise price per share, so determined, being rounded up to the nearest full cent). No payment shall be made for fractional shares. The aggregate number of shares of Parent Common Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or issuable upon the exercise of Options assumed by Parent pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are this Section 2.2(c) shall be referred to in this Agreement as “Company Options”), and (iithe "Option Shares." Any adjustment to an incentive stock option made under this Section 2.2(c) 7,748,679 shares shall comply with Section 424(a) of Company Common Stock are reserved for future issuance under the Company Stock PlansCode. Company has made available to Parent a true, complete and correct list The Parent's assumption of each Company Stock Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2this Section 2.2(c) the name of shall be subject to the holder of such Company Option, Stock Option executing and delivering to the Parent the Stock Option Assumption Agreement in the form of Exhibit I hereto providing that --------- ten percent (310%) of the number of shares of Company Common Stock Option Shares subject to such Company Option, (4) Stock Option will be deposited in escrow as security for the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as indemnification obligations of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance Holders under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleArticle XI hereof.

Stock Options. As of (a) At the close of business Effective Time, each outstanding Platform Option under the Platform Option Plan, whether vested or unvested, shall be deemed to constitute an option (a "ESS OPTION") to acquire, on the Reference Date: (i) 7,785,062 same terms and conditions as were applicable under the Platform Option, the same number of shares of Company ESS Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company OptionPlatform Option would have been entitled to receive pursuant to the Merger had such holder exercised such option to purchase Platform Common Stock or Platform Class B Common Stock in full immediately prior to the Effective Time (rounded down to the nearest whole number), at a price per share (3rounded up to the nearest whole cent) equal to (i) the aggregate exercise price for the shares of Platform Common Stock or Platform Class B Common Stock otherwise purchasable pursuant to such Platform Option divided by (ii) the number of full shares of Company ESS Common Stock deemed purchasable pursuant to such ESS Option in accordance with the foregoing; provided, however, that, in the case of any Platform Option to which Section 422 of the Code applies ("INCENTIVE STOCK OPTIONS"), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code. In connection with the assumption by ESS of the Platform Options pursuant to this Section 6.5(a), Platform shall assign to ESS, effective at the Effective Time, Platform's right to repurchase unvested shares of Platform Common Stock issuable upon the exercise of the Platform Options or previously issued upon the exercise of options granted under the Platform Option Plan, in accordance with the terms of the Platform Option Plan and the related stock option agreements and stock purchase agreements entered into under the Platform Option Plan. (b) As soon as practicable after the Effective Time, ESS shall deliver to the participants in the Platform Option Plan appropriate notice setting forth such participants' rights pursuant thereto and the grants pursuant to the Platform Option Plan shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 6.5 after giving effect to the Merger). ESS shall comply with the terms of the Platform Option Plan and ensure, to the extent required by, and subject to the provisions of, such Platform Option Plan and Sections 422 and 424(a) of the Code, that Platform Options which qualified as incentive stock options prior the Effective Time continue to qualify as incentive stock options after the Effective Time. (c) ESS shall take all corporate action necessary to reserve for issuance a sufficient number of shares of ESS Common Stock for delivery under Platform Options assumed in accordance with this Section 6.5. As soon as practicable after the Effective Time and in any event no later than 10 business days after the Closing Date, ESS shall file a registration statement on Form S-8 (or any successor forms) under the Securities Act of 1933, as amended, (the "SECURITIES ACT"), with respect to the shares of ESS Common Stock subject to such Company Option, (4) options and shall use its best efforts to maintain the exercise price effectiveness of such Company Option, registration statement or registration statements (5) and maintain the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as current status of the Reference Date, and (7prospectus or prospectuses contained therein) the date on which for so long as such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleoptions remain outstanding.

Stock Options. As of Each option outstanding at the close of business on the Reference Date: (i) 7,785,062 Effective Time to purchase shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined belowa "STOCK OPTION") to purchase Company Common granted under (A) the Company's Executive Long Term Incentive Plan, (B) the Company's Amended and Restated 1987 Directors Stock under Option Plan, (C) the applicable Company Benefit Plans that are Company's Amended and Restated 1990 Incentive Plan (the "1990 PLAN"), (D) the Company's 1996 Directors Stock Option Plan, (E) the Company's Bonus Deferral Plan (the "BONUS DEFERRAL PLAN"), (F) the 1981 Stock Option Plan or (G) any other written or otherwise binding stock plans as set forth in Section 2.12(b) option plan or agreement of the Company Disclosure Schedule except the Company's 1984 Employee Stock Purchase Plan, the 1985 Employee Stock Purchase Plan and the Amended and Restated Raychem Corporation Limited Employee Stock Purchase Plan (the “Company Stock Plans”"STOCK PURCHASE PLANS") (equity or other equity-based awardscollectively, whether payable in cashthe "COMPANY STOCK OPTION PLANS"), shares or otherwiseshall constitute an option (an "ADJUSTED OPTION") to acquire, granted under or pursuant on the same terms and conditions MUTATIS MUTANDIS as were applicable to such Stock Option prior to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”Effective Time (but taking account of the Merger), and the number of Parent Common Shares (iirounded down to a whole Parent Common Share) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and determined by multiplying (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3x) the number of shares of Company Common Stock subject to such Company OptionStock Options immediately prior to the Effective Time by (y) 0.4140, at a price per share (4rounded up to a whole cent) the exercise price of such Company Option, equal to (5u) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of for Company Common Stock otherwise purchasable pursuant to such Stock Option divided by (v) 0.4140. The other terms of each such Stock Option, and the Company Stock Option Plans under which they were issued, shall continue to apply in accordance with their terms, including, to the extent provided therein or under the Company's Key Employee Retention and Severance Plan, the acceleration of vesting of such Stock Options in connection with the transactions contemplated hereby or upon the termination of employment of a holder of an Adjusted Option. As soon as practicable after the Effective Time, Merger Sub shall cause to be delivered to each holder of an outstanding Stock Option an appropriate notice setting forth such holder's rights pursuant thereto, and stating that such Stock Option shall continue in effect on the applicable date of grant. As same terms and conditions (subject to the adjustments as a result of the Reference DateMerger described in this Section 1.06(c)). Parent shall comply with the terms of all such Adjusted Options and ensure, there are no outstanding or authorized to the extent required by, and subject to the provisions of, the Company Stock Option Plans, that Adjusted Options which qualified as incentive stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (coptions under Section 422(b) of the Company Disclosure ScheduleCode ("ISOS") prior to the Effective Time continue to qualify as ISOs after the Effective Time to the extent permissible under governing law. Nothing in this paragraph is intended to or shall amend or modify the terms of any Stock Option, including any provision for its expiration, cancellation or forfeiture in a transaction such as the Merger.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to At the Effective Time, each outstanding Company Options (as defined below) option to purchase Company Common Stock Shares (a "Company Option") under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than whether -------------- vested or unvested, shall be converted to an option to acquire, on the same terms and conditions as were applicable under such Company Restricted Stock or Company Restricted Stock UnitsOption, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 the same number of shares of Company Parent Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option would have been entitled to receive pursuant to the Merger had such holder exercised such Company Option in full immediately prior to the Effective Time (rounded down to the nearest whole number) (a "Substitute Option"), at an exercise price per share ----------------- (3rounded up to the nearest whole cent) equal to (y) the aggregate exercise price for the Company Shares otherwise purchasable pursuant to such Company Option divided by (z) the number of full shares of Company Parent Common Stock subject deemed purchasable pursuant to such Company OptionOption in accordance with the foregoing. Notwithstanding the foregoing, each purchase right granted under the Company's Employee Stock Purchase Plan or the Company's Supplemental Employee Stock Purchase Plan (4the "Purchase Plans") that is outstanding at the exercise price Effective Time shall --------- ----- be converted to a right to acquire upon the same terms and conditions as were applicable to such right immediately before the Effective Time, that number of such shares (rounded down to the nearest whole share) of Parent Common Stock equal to the Exchange Ratio multiplied by the number of Company Option, (5) the date on Shares for which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and purchase right would otherwise have been exercisable determined as of the Reference Date, and (7) the relevant grant date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Purchase Plan at a purchase price per share equal to 85% of the lower of (A) the fair market value of a Company Benefit Plans, upon issuance Share on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved relevant grant date divided by the Board of Directors of Company Exchange Ratio or (or a duly authorized committee or subcommittee thereofB) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Parent Common Stock on the applicable date of grant. relevant purchase date. (ii) As of promptly as practicable after the Reference DateEffective Time, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect the Surviving Corporation shall deliver to Company other than as set forth the participants in Sections 2.2(b) and (c) of the Company Disclosure ScheduleStock Plans appropriate notices setting forth such participants' rights pursuant to the Substitute Options.

Stock Options. As (a) Subject to Section 5.1(b), at the Effective Time, each Company Option which is outstanding and unexercised immediately prior to the Effective Time, whether or not vested, shall be converted into and become an option to purchase Parent Common Stock, and Parent shall assume each such Company Option in accordance with the terms (as in effect as of the close date of business on this Agreement) of the Reference Date: stock option plan under which it was issued and the terms of the stock option agreement by which it is evidenced in a manner consistent with the requirements of Section 422 of the Code. Accordingly, from and after the Effective Time, (i) 7,785,062 each Company Option assumed by Parent may be exercised solely for shares of Company Parent Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awardsStock, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 the number of shares of Company Parent Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of be subject to each assumed Company Option outstanding as shall be equal to the product of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3A) the number of shares of Company Common Stock subject to such the original Company Option, Option and (4B) the Exchange Ratio (rounded down to the nearest whole share); (iii) the exercise price per share of such Parent Common Stock under the assumed Company Option, Option shall be equal to the quotient of (5A) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares exercise price per share of Company Common Stock under the original Company Option divided by the Exchange Ratio (rounded up to the nearest whole cent); and (iv) any restriction on the exercise of any such Company Option shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Company Option shall otherwise remain unchanged; PROVIDED, HOWEVER, that each Company Option assumed by Parent in accordance with this Section 5.1(a) shall, in accordance with its terms, be subject to issuance under further adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction subsequent to the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant Effective Time. The adjustments provided herein with respect to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of any Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials which are "incentive stock options" (as defined in Section 2.4(b)422 of the Code) shall be effected in a manner consistent with the requirements of Section 424(a) of the Code. Parent shall file with the SEC, no later than 60 days after the date on which the Merger becomes effective, a registration statement on Form S-8 relating to the shares of Parent Common Stock issuable with respect to the Company Options assumed by Parent in accordance with GAAP this Section 5.1(a). (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than b) With the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 exception of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock Options set forth on the applicable date of grant. As Part 2.3(b) of the Reference DateDisclosure Schedule, there are no outstanding or authorized Parent shall not assume any stock appreciationoptions, phantom stock, profit participation warrants or other similar rights or equity based awards with respect to Company convertible securities of the Company, and all such options, warrants and other than as set forth in Sections 2.2(b) and convertible securities shall terminate at the Effective Time. (c) of Prior to the Effective Time, the Company Disclosure Schedule.shall take all action that may be necessary (under the plans pursuant to which Company Options are outstanding and otherwise)

Stock Options. As (a) At the Effective Time, the Company will assume the Seller's 1991 Stock Option and Incentive Plan, the 1995 Equity Incentive Plan and the 1996 Non- Employee Director Stock Option Plan (the "Option Plans") and all of the close of business on Seller's obligations thereunder. At the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to Effective Time, each outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or option issued pursuant to the Company Stock PlansOption Plans shall be deemed to constitute an option to acquire, other than Company Restricted Stock or Company Restricted Stock Unitson the same terms and conditions as were applicable under such option (as amended as contemplated in Section 4.1(g) and Annex A) (including, are referred to in this Agreement as “Company Options”without limitation, the time periods allowed for exercise), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock equal to the product of the Exchange Ratio and the number of shares of Seller Common Stock subject to such option (provided that any fractional shares of Company OptionCommon Stock resulting from such multiplication shall be rounded down to the nearest share), at a price per share (4rounded up to the nearest cent) equal to the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as per share of the Reference Dateshares of Seller Common Stock subject to such option divided by the Exchange Ratio. (b) Within five days after the Effective Time, and (7) the date Company shall file with the SEC a registration statement on which such Company Option expires. All an appropriate form under the Securities Act with respect to the shares of Company Common Stock subject to issuance under the applicable options to acquire Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments Common Stock issued pursuant to Section 5.7(a) hereof, and shall use its best efforts to maintain the current status of the prospectus related thereto, as well as comply with applicable state securities or Blue Sky Laws, for so long as such options remain outstanding. The adjustment provided herein with respect to any options which they are issued, are duly authorized ISOs shall be and will is intended to be validly issued, fully paid effected in a manner which is consistent with Section 424(a) of the Code. The duration and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the other terms of the applicable Company Benefit Plan and new option shall be the same as the original option, except that all applicable Legal Requirements and recorded on references to the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than Seller shall be deemed to be references to the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleCompany.

Stock Options. As of Unless the close of business on Buyer and the Reference Date: Company agree otherwise and subject to local laws, the Buyer shall take all actions necessary to convert each outstanding option to purchase Company Shares (each, a "COMPANY STOCK OPTION" and, collectively, the "COMPANY STOCK OPTIONS") that is outstanding immediately prior to the Closing Time into a stock option to purchase the Buyer Shares subject to the Buyer 2000 Stock Plan with substantially equal value and substantially equivalent provisions as the Company Stock Option (collectively, the "BUYER STOCK OPTIONS"), effective immediately after the Closing Time. (i) 7,785,062 shares of Unless the Buyer and the Company Common Stock were agree otherwise and subject to issuance pursuant local laws, the Company shall use commercially reasonable efforts, to the extent the Buyer provides funding for such activity, to repurchase prior to the Closing Time each outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans Option that are stock plans as set forth in Section 2.12(b) is outstanding and held by an optionee who is not an employee of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and any of its Subsidiaries. (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under Unless the Buyer and the Company agree otherwise and subject to local laws, each Buyer Stock Plans. Company has made available to Parent Option covering a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” option under Section 422 of the Code so qualifies (A) shall be exercisable for, and represent the right to acquire, that number of shares of Buyer Common Stock (rounded down to the nearest whole share) equal to (i) the number of Company Shares subject to such Company Stock Option in effect immediately prior to the Closing Time multiplied by (ii) the Fixed Offer Price; and (B) shall have an exercise price per share of Buyer Common Stock subject to such converted Company Stock Option equal to (i) the exercise price per Company Share subject to such Company Stock Option in effect immediately prior to the Closing Time divided by (ii) the Fixed Offer Price (rounded up to the nearest whole cent). With respect to all other outstanding Company Stock Options, the Buyer shall determine whether the Buyer Stock Options covering all other such Company Stock Options shall (A) (x) be exercisable for, and represent the right to acquire, that number of shares of Buyer Common Stock (rounded up to the nearest whole share) equal to (i) the number of Company Shares subject to such Company Stock Option in effect immediately prior to the Closing Time multiplied by (ii) the Fixed Offer Price; and (y) have an exercise price per share of Buyer Common Stock subject to such converted Company Stock Option equal to (i) the exercise price per Company Share subject to such Company Stock Option in effect immediately prior to the Closing Time divided by (ii) the Fixed Offer Price (rounded down to the nearest whole cent) (the "FIXED OPTION ALTERNATIVE") or (B) (x) be exercisable for, and represent the right to acquire shares of Buyer Common Stock pursuant to the terms of the Fixed Option Alternative or, to the extent the holder thereof makes an effective written election prior to the Closing Time, (y) (I) be exercisable for, and represent the right to acquire, a number of units equal to the number of Company Shares subject to such Company Stock Option in effect immediately prior to the Closing Time, each such unit comprised of that number of shares of Buyer Common Stock and CVRs equal to the Contingent Offer Price and (II) have an exercise price per such unit equal to the exercise price per Company Share subject to such Company Stock Option in effect immediately prior to the Closing Time. (iii) The Company shall use commercially reasonable efforts to obtain an executed copy of each Buyer Stock Option. Copies of each Buyer Stock Option that are not executed and returned to the Buyer shall not be entered into the Buyer's computer system. (iv) Each Company Stock Option may be subject to a blackout period for as brief a period as is reasonably practicable, and in any event not more than two weeks, after the Closing Time due to administrative constraints. Holders of a converted Company Stock Option will not be able to exercise any such option during any such blackout period. (v) The Company and the per share exercise price of Buyer further agree that each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleOption Plans and agreements shall be amended, to the extent necessary, to reflect the transactions contemplated by this Agreement.

Stock Options. As of At the close of business on Effective Time, all options to purchase ------------- Company Common Stock (each a "Company Option") then outstanding (whether or not exercisable at such time) under Chili!Soft's 1997 Stock Option Plan, 1998 Stock Option Plan and 1999 Stock Option Plan (collectively, the Reference Date: "Option Plan"), a Key Employee Option (as defined in Section 4.1(i) below) or otherwise, shall remain outstanding following the Effective Time and shall be assumed by Parent in accordance with provisions described below. (i) 7,785,062 shares of Each Company Common Stock were Option so assumed by Parent under this Agreement shall continue to have, and be subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under to, the applicable Company Benefit Plans that are stock plans as same terms and conditions set forth in Section 2.12(b) of the Company Disclosure Schedule (Option Plan and/or as provided in the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which respective option agreement governing such Company Option was grantedimmediately prior to the Effective Time, except that (2A) the name of the holder of such Company Option, (3) Option shall be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock subject to that were issuable (in the event of full vesting) upon exercise of such Company OptionOption immediately prior to the Effective Time multiplied by the Common Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock and (4B) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Option shall be equal to the quotient determined by dividing the exercise price per share of such Company Option, (5) the date on Common Stock at which such Company Option was grantedexercisable immediately prior to the Effective Time by the Common Exchange Ratio, rounded up to the nearest whole cent. (6ii) In the applicable vesting schedule, and the extent case of any Company Option to which such Company Option was vested and exercisable as Section 421 of the Reference Date, and (7) the date on which such Company Option expires. All shares Code applies by reason of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” its qualification under Section 422 of the Code so qualifies ("qualified stock option"), the option price, the number of shares purchasable pursuant to such assumed Parent Common Stock option and the per share terms and conditions of exercise price of each Company Option was not less than such assumed Parent Common Stock option shall be determined in order to comply with Section 424(a) of the fair market value of a share Code. (iii) As soon as practicable after the Effective Time, Parent shall deliver to the holders of Company Options appropriate notices setting forth such holders' rights pursuant to the Option Plan, and the agreements evidencing the grants of such Company Options shall be deemed to be appropriately amended so that such Company Options shall represent rights to acquire Parent Common Stock on the applicable date of grant. As of same terms and conditions as contained in the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect Company Options (subject to Company other than the adjustments required by this Section 4.1(f) after giving effect to the assumption by Parent as set forth in Sections 2.2(b) and (c) above). Parent shall comply with the terms of the Option Plan and use commercially reasonable efforts to ensure, to the extent permitted by the Code and to the extent required by, and subject to the provisions of, the Option Plan, that Company Disclosure ScheduleOptions which qualified as qualified stock options prior to the Effective Time continue to qualify as qualified stock options of Parent after the Effective Time. (iv) Notwithstanding anything to the contrary in this Section 4.1, in lieu of assuming outstanding Company Options in accordance with this Section 4.1(f), Parent may, at its election, cause such outstanding Company Options to be replaced by issuing substantially similar replacement stock options in substitution therefor pursuant to a stock option plan of Parent, which is substantially similar to the Option Plan.

Stock Options. As (a) Subject to Section 2.04(b), as of the close Effective Time, each stock option outstanding under any stock option or compensation plan, agreement or arrangement of business the Company (each, a “Company Stock Option”) that is outstanding immediately prior to the Effective Time, whether or not then vested or exercisable, shall cease to represent a right to acquire Company Common Stock and shall be converted automatically into an option to purchase shares of Parent Common Stock on substantially the Reference Date: same terms and conditions (including vesting schedule) as applied to such Company Stock Option immediately prior to the Effective Time, except that (i) 7,785,062 the number of shares of Company Parent Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “each assumed Company Stock Plans”) Option shall be determined by multiplying (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3A) the number of shares of Company Common Stock subject to such Company Option, Stock Option by (4B) the Option Exchange Ratio (such product to be rounded down to the nearest whole share); and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Option, Stock Option will be equal to the quotient determined by dividing (5A) the date on which such Company Option was granted, (6) per share exercise price for the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject in respect of which such Company Stock Option was exercisable immediately prior to issuance the Effective Time by (B) the Option Exchange Ratio. (b) At or immediately prior to the Effective Time, each Company Stock Option held by a non-employee director or former director of the Company outstanding under any employee stock option or compensation plan or arrangement of the Company, whether or not exercisable or vested, shall be canceled, and the Company shall pay each such holder at or promptly after the Effective Time for each such option an amount in cash determined by multiplying (i) the excess, if any, of (A) the per share Merger Consideration over (B) the applicable exercise price of such option by (ii) the number of shares of Company Common Stock such holder could have purchased (assuming full vesting of all options) had such holder exercised such option in full immediately prior to the Effective Time. (c) Prior to the Effective Time, the Company shall (i) use its commercially reasonable efforts to obtain any consents from holders of options to purchase shares of Company Common Stock granted under the applicable Company Benefit Plans, upon issuance on the terms Company’s stock option or compensation plans or arrangements and conditions specified in the instruments pursuant (ii) make any amendments to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of such stock option or compensation plans or arrangements that are necessary to give effect to the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on transactions contemplated by this Section 2.04. Notwithstanding any other provision of this Section 2.04, payment may be withheld in respect of any employee stock option until such necessary consents are obtained. (d) To the extent the Company Financials Stock Options are assumed by Parent pursuant to Section 2.04(a) above: (i) Parent shall take such actions as are necessary for such assumption of Company Stock Options, including the reservation, issuance and listing of Parent Common Stock as is necessary to effectuate the transactions contemplated by this Section 2.04; (ii) Parent shall prepare and file with the SEC a registration statement on an appropriate form, or a post-effective amendment to a registration statement previously filed under the 1933 Act, with respect to the shares of Parent Common Stock subject to such assumed Company Stock Options and, where applicable, shall use its reasonable best efforts to have such registration statement declared effective as soon as practicable following the Effective Time and to maintain the effectiveness of such registration statement covering such assumed Company Stock Options (and to maintain the current status of the prospectus contained therein) for so long as such Company Stock Options remain outstanding; (iii) Parent shall take all actions required under the rules and regulations of the Nasdaq with respect to the assumption by it of the Company Stock Options; and (iv) it is intended that the Company Stock Options assumed by Parent shall qualify following the Effective Time as incentive stock options (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and Code) to the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of extent the Company Disclosure ScheduleStock Options qualified as incentive stock options immediately prior to the Effective Time and this Section 2.04 shall be construed consistent with such intent.

Stock Options. As of the close of business on the Reference Date: (ia) 7,785,062 Each option to purchase shares of Company Common Stock were subject to issuance pursuant to that is outstanding at the Effective Time (including the Existing Options and the New Options), whether or not exercisable and whether or not vested (a "Company Options (as defined below) to purchase Company Common Stock under Option"), shall, without any action on the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) part of the Company Disclosure Schedule or the holder thereof, be assumed by Parent in such manner that Parent (i) is a corporation "assuming a stock option in a transaction to which Section 424(a) applies" within the “Company Stock Plans”) (equity meaning of Section 424 of the Code and the regulations thereunder or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under to the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as extent that Section 424 of the Reference Date, and (1) the particular Company Stock Plan pursuant Code does not apply to which such Company Option was granted, (2) the name of the holder of any such Company Option, would be such a corporation were Section 424 of the Code applicable to such Company Option. From and after the Effective Time, all references to the Company in the Company Options shall be deemed to refer to Parent. The Company Options assumed by Parent shall be exercisable upon the same terms and conditions as under the Company Options (3including provisions regarding vesting and the acceleration thereof) except that (i) such Existing Options or New Options, as the case may be, shall entitle the holder to purchase from Parent the number of shares of Parent Common Stock (rounded down to the nearest whole number of such shares) that equals the product of the Conversion Ratio multiplied by the number of shares of Company Common Stock subject to such Company Existing Option or New Option, as the case may be, immediately prior to the Effective Time, (4ii) the option exercise price per share of Parent Common Stock shall be an amount (rounded up to the nearest full cent) equal to (y) the option exercise price per share of such Existing Option or New Option, as the case may be, immediately prior to the Effective Time, divided by (z) the Conversion Ratio, and (iii) the Company Options shall vest to the extent required pursuant to the current terms of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable Options or other agreements as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined described in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c2.6(a) of the Company Disclosure Schedule. Except to the extent required pursuant to the current terms of such Company Options or other agreements as described in Section 2.6(c) of the Company Disclosure Schedule, the Company shall not take any action to accelerate the vesting of any Company Options. The New Options assumed by the Parent shall, to the extent permitted under law, maintain their status as "incentive stock options.". (b) Prior to the Closing, the Company shall grant the New Options to the individuals set forth on EXHIBIT D attached hereto in the respective amounts and at the exercise price per share set forth opposite such individual's name. The other terms and conditions of the New Options shall be set forth in an incentive stock option agreement, in a form mutually acceptable to the Company and Parent. (c) In addition to and not in limitation of the foregoing, each holder of an Existing Option to purchase one share of Company Common Stock shall be entitled to receive for each such option cash (i) at the Effective Time in an amount equal to the quotient of (x) $1,184,000 divided by (y) the Existing Options, and (ii) from time to time after the Effective Time, the quotient of (x) the Additional Cash Consideration (if any), divided by (y) the Diluted Company Share Amount (collectively, the "Optionee Consideration"). (d) On the Effective Time, Parent shall issue to each holder of a Company Option a written instrument informing such holder of the assumption by Parent of such Company Option. As soon as practicable after the Effective Time, but in no event to exceed thirty (30) days from the Effective Time, Parent shall file a registration statement on Form S-8 (or any successor form) with respect to the shares of Parent Common Stock subject to the Company Options and shall use commercially reasonable efforts to maintain such registration statement (or any successor form), including the current status of any related prospectus or prospectuses, for so long as the Company Options remain outstanding. In addition, Parent shall use commercially reasonable efforts to cause the shares of Parent Common Stock subject to Company Options to be listed on the Nasdaq and such other exchanges as Parent shall determine. Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Options pursuant to the terms set forth in this Section 2.6. Parent shall comply with the terms of the Company Option Plan (as defined in Section 4.4) and use commercially reasonable efforts to cause those Company Options that qualified as incentive stock options prior to the Effective Time to continue to qualify as incentive stock options immediately after the Effective Time.

Stock Options. As (a) At the Effective Time, each holder of the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) an option to purchase Company Common Stock under (a "Company Option") then outstanding pursuant to the applicable -------------- Company's 1995 Incentive Stock Option Plan ("ISO Plan"), whether or not such -------- Company Benefit Plans that are stock plans Option is exercisable at such time, and whether or not such Company Option is vested at such time, shall be entitled, in exchange for the termination of such Company Option, to receive (i) cash from the Payment Agent in an amount equal to the product of (x) the difference of (A) the Initial Per Share Merger Consideration minus (B) the exercise price per share of such Company Option multiplied by (y) the number of shares underlying such Company Option (with respect to each such holder individually, such holder's "Initial ------- Company Option Consideration"), and together with the aggregate Initial Company ---------------------------- Option Consideration of all other such holders, the "Initial Aggregate Company ------------------------- Option Consideration"), plus (ii) an additional amount in cash from the -------------------- Securityholder Committee, payable in accordance with Section 1.5(b), equal to such Eligible Holder's Percentage Interest in the Deferred Consideration and (iii) an additional pro rata amount of cash, payable as set forth in Section 2.12(b) 1.4, equal to such Eligible Holder's Percentage Interest in the Escrow Amount and the Opportunity Premium Payment. Any amounts payable by ▇▇▇▇▇▇ to the holders of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or Options pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”(i), and (ii) 7,748,679 shares and (iii) above shall be paid to such holders by ▇▇▇▇▇▇ net of any applicable withholding taxes. (b) Each holder of a Company Common Stock are reserved for future issuance under Option, upon surrender to the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as Payment Agent of the Reference Date, and (1) the particular Company Stock Plan pursuant Option Agreement relating to which any such Company Option was granted, (2) the name together with a properly completed letter of the holder of transmittal covering such Company Option, (3) will receive the number of shares of Initial Company Common Stock subject to such Company Option, (4) the exercise price Option Consideration in respect of such Company OptionOption (and, (5) the date on which if applicable, such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as Eligible Holder's Percentage Interest of any portion of the Reference Date, and (7) Deferred Consideration or the date on which such Company Option expires. All shares of Company Common Stock subject Escrow Amount payable prior to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of surrender). Until so surrendered, each such Company OptionOption Agreement shall, after the Effective Time, represent for all purposes only the right to receive the amounts provided for herein. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock No interest shall be paid on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Schedulesuch amounts.

Stock Options. As of (a) At the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) Effective Time, each option to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule Shares (the “a "Company Stock Plans”Option" or collectively "Company Stock Options") (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or issued pursuant to the Company Company's 1996 Stock PlansOption Plan or other agreement or arrangement, other than Company Restricted Stock whether vested or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”)unvested, and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) Effective Time shall be converted as of the particular Company Effective Time into options to purchase shares of Parent Common Stock Plan in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which such any Company Stock Option was granted, (2) has been issued or may be issued are referred to collectively as the name "Company Plans." Each Company Stock Option shall be converted into an option to acquire a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such Company Stock Option, whether or not vested, in full immediately prior to the Effective Time (3rounded to the nearest whole share) at a price per share (rounded to the nearest whole cent) equal to (i) the number of shares of Company Common Stock subject per share exercise price for each Share otherwise purchasable pursuant to such Company Option, Stock Option divided by (4ii) the exercise price Exchange Ratio; provided, however, that in the case of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent any option to which such Company Option was vested and exercisable as Section 421 of the Reference Date, and (7) the date on which such Company Option expires. All shares Code applies by reason of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” its qualification under Section 422 of the Code so qualifies ("incentive stock options") the option price, the number of shares purchasable pursuant to such option and the per share terms and conditions of exercise price of each Company Option was not less than such option shall be adjusted as necessary in order to comply with Section 424(a) of the fair market value of a share Code. (b) As soon as practicable after the date hereof, Parent shall deliver to the holders of Company Stock Options appropriate notices setting forth such holders' rights pursuant to the Company Plans and that the agreements evidencing the grants of such options shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 1.11 after giving effect to the Merger). Parent shall comply with the terms of the Company Plans and ensure, to the extent required by and subject to the provisions of such Company Plans, that Company Stock Options that qualified as incentive stock options prior to the Effective Time continue to qualify as incentive stock options of Parent after the Effective Time. (c) Parent shall cause a sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Stock Options assumed in accordance with this Section 1.11 to be reserved for issuance for as long as such options remain outstanding. Within thirty (30) days after the Effective Time, Parent shall (i) if no registration statement is in effect covering such shares of Parent Common Stock, file a registration statement on the applicable date of grant. As of the Reference Date, there are no outstanding Form S-8 (or authorized stock appreciation, phantom stock, profit participation any successor or other similar rights or equity based awards appropriate forms) with respect to the shares of Parent Common Stock subject to any Company other than Stock Options held by persons who are directors, officers or employees of the Company, which will include or be accompanied by a registration statement on an appropriate form with respect to the resale of any shares of Parent Common Stock acquired pursuant to the exercise, prior to the effectiveness of the S-8, of Company Stock Options, and shall use commercially reasonable efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as set forth in Sections 2.2(b) such options remain outstanding and (cii) cause such shares of Parent Common Stock to be approved for listing on the Company Disclosure ScheduleNasdaq National Market, subject to official notice of issuance.

Stock Options. As of the close of business on the Reference Date: With respect to each outstanding (ia) 7,785,062 option to purchase shares of Company Target Common Stock were subject to issuance granted by Target pursuant to outstanding Company Options Target's 1996 Stock Option Plan and Directors Stock Option Plan (as defined below) to purchase Company Common collectively, the "Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Option Plans”") (equity collectively, the "Options") (whether or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant not then exercisable) immediately prior to the Company Stock PlansEffective Time, other than Company Restricted Stock or Company Restricted Stock Units, are referred Target shall (a) cancel immediately prior to in this Agreement as “Company Options”)the Effective Time each Option that it has the right to cancel, and (iib) 7,748,679 shares of Company Common Stock are reserved for future issuance under with respect to Options that it does not have the Company Stock Plans. Company has made available right to Parent a truecancel, complete and correct list of each Company Option outstanding as of use its commercially reasonable efforts to obtain the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name consent of the holder of such Company Option to its cancellation and, subject to such consent, cancel such Option immediately prior to the Effective Time. In consideration for the cancellation of such Option, Target agrees to and shall pay to the holder of each canceled Option, at the Effective Time (3whether or not such Option was exercisable immediately prior to its cancellation), an amount in cash equal to the product of (i) the excess, if any, of the Per Share Amount over the per-share exercise price for such Option, and (ii) the number of shares of Company Target Common Stock previously subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on . Each Option which such Company Option was granted, (6) the applicable vesting scheduleis not canceled as described above shall continue to have, and be subject to, the extent same terms and conditions set forth in the stock option plans and agreements pursuant to which such Company Option was vested and Options were issued as in effect immediately prior to the Effective Time, except that such Options shall be exercisable as for an amount in cash equal to the product of (i) the excess, if any, of the Reference Date, and (7) Per Share Amount over the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per per-share exercise price for such Option, multiplied by (ii) the number of each Company Option was not less than the fair market value shares of a share of Company Target Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect previously subject to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Schedulesuch Option.

Stock Options. As The Company shall adopt a new stock option ------------- plan pursuant to which 5 million shares of Common Stock, or such greater number of shares of Common Stock as shall be determined by the board of directors of the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to Company, shall be reserved for issuance pursuant to outstanding Company Options (as defined below) options or other awards granted pursuant to purchase Company such plan. Of the total number of shares of Common Stock under reserved for issuance pursuant to such plan, the applicable board of directors of the Company Benefit Plans that shall grant to Persons who are stock plans members of the management of the Company as of the date of this Agreement options relating to 1.5 million shares of Common Stock, having an exercise price equal to the Conversion Price of Common Stock set forth in Section 2.12(bthe Convertible Subordinated Debt and having such vesting schedule and term to expiration (which shall not exceed 10 years) as shall be determined by the Compensation Committee of the board of directors of the Company Disclosure Schedule (as constituted as of the “Company Stock Plans”) (equity or other equity-based awardsdate of this Agreement, whether payable in cash, shares or otherwise, granted under or pursuant to which Committee shall also determine the allocation of such options among such Persons. The foregoing determinations by such Committee so constituted shall be binding upon the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are and its Board of Directors notwithstanding that adoption and implementation of the new stock option plan referred to in this Agreement Section 5.9 may occur at a later date as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under which the composition of the Compensation Committee of the board of directors of the Company Stock Planshas changed. In the event the Company has made available is unable for any reason to Parent adopt or implement a truenew stock option plan as contemplated in this Section 5.9, complete the Company shall promptly make such alternative arrangements, including, without limitation, adoption and correct list implementation of each Company Option outstanding one or more phantom stock or other compensation plans, as it shall reasonably determine to be appropriate to provide comparable incentive compensation opportunities to the Persons referred to in this Section 5.9. The provisions of this Section 5.9 are intended to confer upon the Persons designated by the existing Compensation Committee of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Company's Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of right to receive the applicable Company Benefit Plan compensation opportunities hereinabove described and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of to be enforceable by each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure SchedulePersons.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 shares The Company shall take all necessary actions to cause (including plan amendments) prior to the Effective Time each outstanding option to purchase Shares which had not vested immediately prior to such time to become vested and fully exercisable. (ii) Prior to the Effective Time, the Company shall use its reasonable best efforts to cause each then outstanding option granted under the Stock Plans to purchase Shares (a "Company Option"), whether vested or unvested, to be cancelled, with the holder thereof becoming entitled to receive an amount of Company Common Stock were cash equal to the product of (x) the amount, if any, by which the Merger Consideration exceeds the exercise price per Share subject to issuance such Company Option (whether vested or unvested) and (y) the number of Shares issuable pursuant to outstanding the unexercised portion of such Option, less any required withholding of taxes (such amount being hereinafter referred to as the "OPTION CONSIDERATION"). The Option Consideration shall be paid as soon as practicable following the Effective Time, but in any event within five (5) days following the Effective Time. The cancellation of a Company Option in exchange for the Option Consideration shall be deemed a release of any and all rights the holder had or may have had in respect of such Company Option, and any required consents received from Company Option holders shall so provide. (iii) In the event that any Company Options are not cancelled in accordance with the provisions of Section 7.8(a)(ii), such Company Options (as defined belowthe "Remaining Options") shall be subject to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth following provisions of this Section 7.8(a)(iii). Each Remaining Option, shall, at the Effective Time, in Section 2.12(b) accordance with the terms of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was grantedissued, be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Remaining Option immediately prior to the Effective Time, (2A) a number of shares of Parent Common Stock equal to the product (rounded up to the nearest whole number) obtained by multiplying (x) the number of Shares the holder of such Remaining Option would have been entitled to receive immediately prior to the Effective Time had such holder exercised such Remaining Option in full immediately prior to the Effective Time and (y) the quotient obtained by dividing the Merger Consideration by the average of the closing prices per share of Parent Common Stock on the NYSE Composite Transactions tape for the five trading days immediately preceding the date of the Effective Time as reported in the Wall Street Journal, New York City edition, (B) at a price per share of Parent Common Stock (rounded down to the nearest whole cent) equal to (A) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Remaining Option (assuming for such purposes that such Remaining Option was fully exercisable at such time) divided by (B) the number of full shares of Parent Common Stock deemed purchasable pursuant to such Remaining Option in accordance with the foregoing; PROVIDED, HOWEVER, that any Remaining Option which is intended to be an "incentive stock option" (as defined in Section 422 of the Code) shall be adjusted in accordance with the requirements of Section 424 of the Code. (iv) At or prior to the Effective Time, the Company shall make all necessary arrangements with respect to the Stock Plans to permit the assumption of the Remaining Options by Parent. Effective at the Effective Time, Parent shall assume each Remaining Option in accordance with the terms of the Stock Plan under which it was issued and the stock option agreement by which it is evidenced. At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Remaining Options. At the Effective Time, Parent shall file a registration statement on Form S-8, or, if unavailable, a registration statement on Form S-3 (or any successor forms), or another appropriate form with respect to the Parent Common Stock subject to Remaining Options, and shall use its best efforts to cause such registration statement to become and remain effective (and maintain the current status of the prospectus or prospectuses contained therein), as well as comply with any applicable state securities or "blue sky" laws, for so long as any Remaining Options remain outstanding. (v) Prior to the Effective Time, the Board of Directors of Parent shall use reasonable efforts to take all actions necessary to ensure that the options to purchase Parent Common Stock (resulting from Remaining Options) held by the officers and directors of the Company in accordance with this Section 7.8(a) shall be exempt for purposes of Rule 16b-3 under the Exchange Act (including, with respect to each officer and director of the Company, having the full Board of Directors of Parent adopt, prior to the Effective Time, resolutions providing (i) the name of the holder of each such Company Optionofficer and director, (3ii) the number of shares of Company Parent Common Stock to be subject to each Remaining Option held by each such Company Optionofficer or director, (4iii) any other material terms of such options and (iv) the exercise price fact that such approval is for the purpose of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance obtaining an exemption under Rule 16b-3 under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(bExchange Act)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Schedule.

Stock Options. As Prior to the Effective Time, C▇▇▇▇ shall use its commercially reasonable efforts to provide that each option to purchase C▇▇▇▇ Shares granted under C▇▇▇▇’▇ 1997 Employee, Director and Consultant Stock Option Plan and its 2005 Stock Plan (in each case, a “C▇▇▇▇ Option”) outstanding at the Effective Time which is vested (in each case, a “Vested C▇▇▇▇ Option”) shall entitle each holder thereof to receive a payment in cash from the Surviving Corporation, upon the Effective Time, equal to the product of the close of business on the Reference Date: (i) 7,785,062 shares the number of Company Common Stock were C▇▇▇▇ Shares previously subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), such Vested C▇▇▇▇ Option and (ii) 7,748,679 shares the excess, if any, of Company Common Stock are reserved the Merger Consideration over the exercise price per C▇▇▇▇ Share previously subject to such Vested C▇▇▇▇ Option. All applicable withholding taxes attributable to the payments made hereunder shall be deducted from the amounts payable hereunder; provided, however, that with respect to any person subject to Section 16 of the Exchange Act, any such amount shall be paid as soon as practicable after the first date payment can be made without liability to such person under Section 16(b) of the Exchange Act. C▇▇▇▇ shall, upon the request of any holder of Vested C▇▇▇▇ Options, permit such holder to execute and deliver to C▇▇▇▇, prior to the expiration of the Offer, an agreement substantially in the form of Annex B (an “Option Election”) under which such holder would agree, contingent upon the purchase of C▇▇▇▇ Shares by Acquisition Subsidiary pursuant to the Offer, to cause, immediately prior to the expiration of the Offer, such Vested C▇▇▇▇ Options to be exercised and the C▇▇▇▇ Shares issued as a result of that exercise to be tendered in the Offer. C▇▇▇▇ and Acquisition Subsidiary shall reflect on their books and records the transactions effected pursuant to the Option Elections. At the Effective Time, (A) each C▇▇▇▇ Option (whether vested or not) outstanding immediately prior to the Effective Time with an exercise price per share that is less than the applicable Merger Consideration for future issuance under the Company Stock Plans. Company has made available class of C▇▇▇▇ Shares into which such C▇▇▇▇ Option is exercisable shall be cancelled by C▇▇▇▇ in exchange for the right to Parent receive, without interest, a truecash amount equal to the product of (1) the excess, complete and correct list if any, of (x) such Merger Consideration, over (y) the exercise price per share of such C▇▇▇▇ Option multiplied by (2) the total number of C▇▇▇▇ Shares subject to such C▇▇▇▇ Option (such product, as applied to C▇▇▇▇ Options referred to as “Option Consideration”); (B) each Company C▇▇▇▇ Option (whether vested or not) outstanding as of the Reference DateEffective Time with an exercise price per share that is equal to or greater than the applicable Merger Consideration for the class of C▇▇▇▇ Shares into which such C▇▇▇▇ Option is exercisable shall be terminated, without any consideration therefor; and (1C) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company C▇▇▇▇ shall take any actions necessary to effect the transactions anticipated by this Section 2.5(e) under its 1997 Employee, Director and Consultant Stock Option Plan and its 2005 Stock Plan and all C▇▇▇▇ Option agreements and any other plan or arrangement of C▇▇▇▇ (whether written or oral, formal or informal). As soon as practicable following the date hereof, C▇▇▇▇ shall deliver or cause to be delivered to each holder of a duly authorized committee C▇▇▇▇ Option any certifications, notices or subcommittee thereof) in material compliance with other communications required by the terms of such C▇▇▇▇ Option or any agreement entered into with respect thereto to be delivered to such holder prior to the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies Effective Time and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduletransactions contemplated by this Agreement.

Stock Options. As (a) Immediately prior to the Effective Time, each outstanding option under the Company Stock Plans shall become fully vested and exercisable. At the Effective Time and without any action on the part of the close parties hereto or any holder of business on such stock options, each then outstanding option shall be canceled and converted into and shall thereafter represent only the Reference Date: right to receive: (i) 7,785,062 a payment in cash equal to (i) 45% of the Cash Merger Consideration, minus 45% of the per Share cash exercise price for such respective Shares under such stock options, multiplied by (ii) the aggregate number of Shares issuable upon exercise of such options; and (ii) a number of shares of Company Parent Stock equal to (i) 0.46739 multiplied by (ii) the number determined pursuant to the following formula: X = Y x (A-B) A Where X = the number to be multiplied by 0.46739 Y = the total number of Shares subject to the option A = 0.46739 times the average closing sale prices for a share of Parent Stock over the five consecutive trading days ending on and including the second full trading day prior to the Effective Time plus $37.80 B = the exercise price of the Shares subject to the option; provided, however, that in lieu of any fractional shares of Parent Stock that otherwise would be issuable pursuant to this subparagraph (ii), the option holder will receive an amount in cash (without interest) equal to such holder’s Table of Contents respective proportionate interest in the proceeds from the sale or sales in the open market by the Exchange Agent for the Offer, on behalf of all such holders, of the aggregate fractional shares of Parent Stock otherwise issuable pursuant to this subparagraph (ii). (b) The amount of cash and number of shares of Parent Common Stock were subject to issuance which the optionee otherwise would be entitled pursuant to outstanding Company Options subparagraphs (a) and (b) above shall be reduced by the total amount of withholding for applicable Taxes with respect to the aggregate options canceled and converted into the right to receive cash and Parent Stock pursuant to this Section 3.05. Such amounts for withholding shall first be deducted from the amounts otherwise payable pursuant to subparagraph (a) and, to the extent additional withholding is required, the number of shares of Parent Stock otherwise deliverable pursuant to subparagraph (b) will be reduced by the amount of remaining withholding, based on the value of a share of Parent Stock over the five consecutive trading days ending on and including the second full trading day prior to the Effective Time. (c) Parent shall cause Merger Sub to make all such payments as defined below) to purchase Company Common Stock under promptly as practicable, and in any event within 15 Business Days, after the applicable Company Benefit Plans that are stock plans Effective Time. As promptly as set forth in Section 2.12(b) of practicable after the date hereof, the Company Disclosure Schedule shall (x) effect any amendments to the “Company Stock Plans”) (equity Plans or other equity-based awards, whether payable in cash, shares any instruments granting or otherwise, granted defining the rights of holders of options to acquire Shares under or pursuant to the Company Stock Plans, other than Company Restricted Stock (y) obtain any necessary consents or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”)approvals of the applicable holders of such stock options, and (iiz) 7,748,679 shares take any other actions as may be permitted or required under the terms of the Company Common Stock are reserved for future issuance Plans, any instruments granting or defining the rights of holders of such options, or applicable Law, necessary to effectuate this Section 3.05. Prior to the Effective Time, the Company shall provide notice to each holder of an option outstanding under the Company Stock Plans. Company has made available to Parent a true, complete Plans describing the accelerated vesting and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder cash out of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) options in accordance with GAAP (as defined in this Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Schedule3.05.

Stock Options. As With respect to all stock options that have been ------------- granted by the Company to the Employee prior to the date hereof, the Company and the Employee agree as follows. (a) On the date of the close expiration or earlier termination of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awardsthis Agreement, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of the Company has approved an amendment to all of Employee's stock options whereby all stock options previously granted to the Employee by the Company that are not vested as of such date shall vest in full. (b) In the event that this Agreement is terminated by the Employee prior to the end of the Term (other than by reason of death or a duly authorized committee disability of the Employee, which is treated in Section 8(c) below), or subcommittee thereof) in material compliance with following the expiration ------------ of the Term of this Agreement, Employee would, under the terms of such stock options, have the right to retain the status of any applicable Company Benefit Plan and all applicable Legal Requirements and recorded on stock options as "incentive stock options" under the Company Financials Internal Revenue Code of 1986, as amended (the "Code"), by exercising any "incentive stock options" within ninety (90) ---- days after the date of such termination by Employee or the expiration of the Term of this Agreement, as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b))applicable. The Board of Directors has approved an amendment to all of Employee's stock options whereby the Employee may, at his election, exercise price of each Company Option is not less than any or all such stock options until May 1, 2001. In the fair market value of a share of Company Common Stock event that Employee elects to exercise stock options that were characterized as determined "incentive stock options" under the Code on the date of grant at any time after the date that is ninety (90) days after termination of this Agreement by Employee or the expiration of the Term of this Agreement, as applicable, Employee acknowledges that such Company Optionoptions will be treated as "non-qualified stock options" under the Code. Each Company Option intended With respect to qualify as an “any "incentive stock option” under Section 422 options" that have been granted to Employee, Employee shall notify the Company in writing within ninety (90) days of the Code so qualifies and termination of this Agreement by Employee (other than termination arising from the per share Employee's death or disability) or the expiration of the Term of this Agreement, as applicable, whether he has elected to exercise price "incentive stock options" for a period of each Company Option was not less than time equal to ninety (90) days from the fair market value of a share of Company Common Stock on the applicable date of grant. As termination of this Agreement by Employee or the expiration of the Reference DateTerm of this Agreement, there are no outstanding as applicable, and have such options treated as "incentive stock options," or authorized to exercise stock appreciationoptions until May 1, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than 2001 and have such options treated as set forth in Sections 2.2(b) and "non-qualified stock options." (c) Following any termination of this Agreement arising from the death or disability of the Company Disclosure ScheduleEmployee, Employee will continue to have the right to retain the status of any applicable stock options as "incentive stock options" under the Code, as well as to exercise all "non-qualified stock options," by exercising stock options for a period of one (1) year after the date of any termination of this Agreement arising from the death or disability of the Employee.

Stock Options. As Subject to the absolute authority of the close Stock Option Committee of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of the Company from time to time to grant (or not to grant) to eligible individuals options to purchase common stock of the Company (or a duly authorized committee or subcommittee thereof) "Options"), it is the intention of the Company and the expectation of the Executive that 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 material compliance with the terms hereof with any terms and conditions in any stock option agreement): (a) Target awards will be in an amount (plus or minus 25%) equal to 400% of Executive's salary; (b) For purposes of determining the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on number of shares 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 Financials for its senior executives; (as defined in Section 2.4(b)c) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price per share of each Company Option is not less than the Options shall be the fair market value of a share of Company Common Stock as determined the common stock on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 grant, and the Options shall expire on the tenth anniversary of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As ; and (d) The Options shall vest ratably on the first three anniversaries of the Reference Datedate of grant; provided, there however, that all Options and all other options to purchase Common Shares then held by the Executive which are no outstanding or authorized stock appreciationnot then vested (in the aggregate being referred to herein as "Accelerated Options") shall become fully vested and immediately exercisable during the remaining original term of each such Accelerated Option, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) 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 Disclosure Schedulewithout Cause or by the Executive for Good Reason; and (e) The Options shall be granted on such other terms and conditions as are generally made applicable to Options granted to the other senior executives of the Company.

Stock Options. As (a) The terms of the close of business on the Reference Date: each outstanding option (ia "COMPANY STOCK OPTION") 7,785,062 to purchase shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are any employee stock plans as set forth in Section 2.12(b) option or compensation plan or arrangement of the Company Disclosure Schedule (a "COMPANY STOCK OPTION PLAN"), whether or not exercisable or vested, shall be adjusted as necessary to provide that, at the “Effective Time, each Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant Option outstanding immediately prior to the Effective Time shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock PlansOption, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 the same number of shares of Company Common Parent Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company OptionStock Option would have been entitled to receive pursuant to the Merger had such holder exercised such Company Stock Option in full immediately prior to the Effective Time, at a price per share of Parent Stock equal to (3A) the aggregate exercise price for the shares of Company Stock otherwise purchasable pursuant to such Company Stock Option divided by (B) the aggregate number of shares of Parent Stock deemed purchasable pursuant to such Company Stock Option (each, as so adjusted, an "ADJUSTED OPTION"), provided that any fractional share of Parent Stock resulting from an aggregation of all the shares of a holder subject to Company Stock Option shall be rounded down to the nearest whole share, and provided further that, for any Company Stock Option to which Section 421 of the Code applies by reason of its qualification under any of Sections 422 through 424 of the Code, the option price, the number of shares of Company Common Stock subject purchasable pursuant to such Company Option, (4) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, option and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified of exercise of such option shall be determined in order to comply with Section 424 of the instruments Code. (b) Prior to the Effective Time, Company shall take any actions that are necessary to give effect to the transactions contemplated by this Section 2.04. (c) Parent shall take such actions as are necessary for the assumption of the Company Stock Options pursuant to which they are issuedthis Section 2.04, are duly authorized including the reservation, issuance and will be validly issuedlisting of Parent Stock as is necessary to effectuate the transactions contemplated by this Section 2.04. Parent shall prepare and file with the SEC a registration statement on an appropriate form, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with post-effective amendment to a registration statement previously filed under the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date1933 Act, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than the shares of Parent Stock subject to the Adjusted Option and, where applicable, shall have such registration statement declared effective as set forth in Sections 2.2(b) soon as is reasonably practicable following the Effective Time and maintain the effectiveness of such registration statement covering such Adjusted Option (c) and to maintain the current status of the Company Disclosure Scheduleprospectus contained therein) for so long as such Adjusted Option remains outstanding.

Stock Options. As of (a) At the close of business on the Reference Date: (i) 7,785,062 shares of Company Effective Time, each outstanding option to purchase Drilex Common Stock were subject to issuance that has been granted pursuant to outstanding Company Options the Drilex Stock Plan (as defined below"Drilex Stock Option") to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans shall be treated as set forth in this Section 2.12(b) 5.10. Drilex shall not grant any stock appreciation rights or limited stock appreciation rights and shall not permit cash payments to holders of Drilex Stock Options in lieu of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to treatment thereof as provided in this Agreement as “Company Options”)Section 5.10. (b) The portion, and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a trueif any, complete and correct list of each Company Drilex Stock Option outstanding that is exercisable as of the Reference DateEffective Time in accordance with the terms thereof shall be assumed by Bake▇ ▇▇▇h▇▇. ▇▇ so assumed, such option shall be deemed to constitute an option to acquire, on the same terms and (1) the particular Company conditions as were applicable under such Drilex Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) a number of shares of Bake▇ ▇▇▇h▇▇ ▇▇▇mon Stock equal to the number of shares of Company Drilex Common Stock purchasable pursuant to such exercisable portion of such Drilex Stock Option multiplied by the Exchange Ratio, at a price per share equal to the per-share exercise price for the shares of Drilex Common Stock purchasable pursuant to such Drilex Stock Option divided by the Exchange Ratio; provided, however, that in the case of any option to which Section 421 of the Code applies by reason of its qualification under any of sections 422-424 of the Code, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code; and provided further, that the number of shares of Bake▇ ▇▇▇h▇▇ ▇▇▇mon Stock that may be purchased upon exercise of such Drilex Stock Option shall not include any fractional share and, upon exercise of such Drilex Stock Option, a cash payment shall be made for any fractional share based upon the closing price of a share of Bake▇ ▇▇▇h▇▇ ▇▇▇mon Stock on the NYSE on the last trading day of the calendar month immediately preceding the date of exercise. After the Effective Time, except as provided above in this Section 5.10(b), each assumed option shall be exercisable upon the same terms and conditions as were applicable to the related Drilex Stock Option immediately prior to the Effective Time. (c) Drilex shall take all reasonable action as may be required such that the portion, if any, of each Drilex Stock Option that is not exercisable as of the Effective Time (an "Unexercisable Option") shall be canceled in exchange for the number of shares of Bake▇ ▇▇▇h▇▇ ▇▇▇mon Stock, decreased to the nearest whole share, having an aggregate market value at the Effective Time (based on the Average Closing Price) equal to the number of shares of Drilex Common Stock subject to such Company OptionUnexercisable Option multiplied by the excess, (4) if any, of the Drilex Value over the per-share exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and thereof. To the extent the terms of an Unexercisable Option allow for withholding to which satisfy tax obligations, such Company Option was vested and exercisable as rights shall apply to the consideration provided for by this Section 5.10(c). (d) Bake▇ ▇▇▇h▇▇ ▇▇▇ll take all corporate action necessary to reserve for issuance a sufficient number of shares of Bake▇ ▇▇▇h▇▇ ▇▇▇mon Stock for delivery upon exercise of the Reference DateDrilex Stock Options assumed in accordance with this Section 5.10. As soon as practicable after the Effective Time, and Bake▇ ▇▇▇h▇▇ ▇▇▇ll file with the SEC a registration statement on Form S-8 (7or any successor form) or another appropriate form with respect to the date on which such Company Option expires. All shares of Company Common Bake▇ ▇▇▇h▇▇ ▇▇▇mon Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on Drilex Stock Options and shall use its best efforts to maintain the terms effectiveness of such registration statement or registration statements (and conditions specified in maintain the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms current status of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (prospectus or prospectuses contained therein) for so long as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Drilex Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleOptions remain outstanding.

Stock Options. As At or immediately prior to the Effective Time, each outstanding employee and director stock option to purchase Shares (an "Option") granted under the ▇▇▇▇▇▇ Industries, Inc. 1995 Stock Incentive Plan for Key Employees (such plans or arrangements, the "Company Stock Option Plan"), shall be canceled, and each holder of any such Option, whether or not then vested or exercisable, shall be paid by the close of business on Company, at or immediately prior to the Reference Date: Effective Time for each such Option, in consideration therefor an amount in cash determined by multiplying (i) 7,785,062 shares the excess, if any, of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under $37.00 per Share over the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) exercise price of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and such Option by (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares Shares such holder could have purchased (assuming full vesting of all Options) had such holder exercised such Option in full immediately prior to the Effective Time. The Company Common Stock subject shall use all reasonable efforts to such Company Optioneffectuate the foregoing, (4) including without limitation, amending the exercise price of such Company OptionOption Plans and obtaining any necessary consents from Option holders; provided, (5) however, that prior to the date on which such Company Option was grantedEffective Time, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of the Company (shall adopt such resolutions or a duly authorized committee or subcommittee thereof) take such other actions as are required to adjust and which action, if any, shall be acceptable in material compliance with all reasonable respects to the Parent, effective immediately prior to the Effective Time, the terms of each outstanding Option as to which any such consent is not obtained prior to the Effective Time to provide that such Option shall be converted into the right, upon exercise of such Option at any time after the Effective Time, to receive an amount in cash equal to $37.00 for each Share subject to such Option, or, alternatively, upon the surrender and cancellation of such Option at any time after the Effective Time to receive an amount in cash determined by multiplying (i) the excess, if any, of $37.00 per Share over the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company such Option is not less than by (ii) the fair market value number of a share of Company Common Stock as determined on the date of grant of Shares subject to such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding in either case without interest or authorized stock appreciation, phantom stock, profit participation or any other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleadjustment thereto.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 shares of All options and warrants to acquire Company Common Stock were subject to issuance pursuant to (individually, a "Company Option" and collectively, the "Company Options") outstanding Company Options (as defined below) to purchase Company Common Stock at the Effective Time under the applicable Company's 1992 Stock Option Plan, the Company's 1995 Stock Option Plan or otherwise (the "Company Benefit Plans that are stock plans as set forth in Section 2.12(bStock Option Plans") shall remain outstanding following the Effective Time. At the Effective Time, such Company Options, by virtue of the Merger and without any further action on the part of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company OptionOptions, shall be assumed by Wats▇▇ ▇▇ such manner that Wats▇▇ (3▇) is a corporation (or a parent or a subsidiary corporation of such corporation) "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code; or (b) to the extent that Section 424 of the Code does not apply to any such Company Options, would be such a corporation (or a parent or a subsidiary corporation of such corporation) were Section 424 applicable to such option. Each Company Option assumed by Wats▇▇ ▇▇▇ll be exercisable upon 4 the same terms and conditions as under the applicable Company Stock Option Plan and the applicable option agreement issued thereunder, except that (x) the unexercised portion of each such Company Option shall be exercisable for that whole number of shares of Wats▇▇ ▇▇▇mon Stock (rounded to the nearest whole share, with 0.5 rounded upward) equal to the number of shares of Company Common Stock subject to such Company Option, (4) the exercise price unexercised portion of such Company Option, Option multiplied by the Exchange Ratio; and (5y) the date on which such Company Option was granted, (6) option exercise price per share of Wats▇▇ ▇▇▇mon Stock shall be an amount equal to the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares option exercise price per share of Company Common Stock subject to issuance under such Company Option in effect at the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved Effective Time divided by the Board of Directors of Company Exchange Ratio (or a duly authorized committee or subcommittee thereof) in material compliance the option price per share, as so determined, being rounded to the nearest full cent, with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)$0.005 rounded upward). No payment shall be made for fractional interests. The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify term, exercisability, vesting schedule, status as an “"incentive stock option” " under Section 422 of the Code so qualifies Code, if applicable, and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As all of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) terms of the Company Disclosure ScheduleOptions shall otherwise remain unchanged unless modified by or as a result of the transaction contemplated by this Agreement. As soon as practicable after the Effective Time, Wats▇▇ ▇▇▇ll deliver to the holders of Company Options appropriate notices setting forth such holders' rights pursuant to such Company Options, as amended by this Section 1.5 as well as notice of Wats▇▇'▇ ▇▇▇umption of the Company's obligations with respect thereto (which occurs by virtue of this Agreement). Wats▇▇ ▇▇▇ll take all corporate actions necessary to reserve for issuance such number of shares of Wats▇▇ ▇▇▇mon Stock as will be necessary to satisfy exercises in full of all Company Options after the Effective Time.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 The Company has reserved 12,791,518 shares of Company Common Stock were subject to for issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred Plan of which options with respect to in this Agreement as “Company Options”), and (ii) 7,748,679 7,996,132 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Datedate of this Agreement, 3,507,577 of which are fully vested and (1exercisable as of the date of this Agreement. Part 2.3(b) of the particular Company Stock Plan pursuant Disclosure Schedule accurately sets forth, with respect to which such each Company Option was granted, that is outstanding as of the date of this Agreement: (2i) the name of the holder of such Company Option, ; (3ii) the total number of shares of Company Common Stock that are or were subject to such Company Option; (iii) the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule and vesting commencement date of such Company Option (including the number of shares of Company Common Stock subject to such Company OptionOption that are vested and unvested as of the date of this Agreement) and whether the vesting of such Company Option is subject to any acceleration in connection with the Merger, any termination of employment or separation from service, or any of the other transactions contemplated by this Agreement or otherwise; (4v) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a per share of Company Common Stock as determined on the date of grant of purchasable under such Company Option. Each ; (vi) whether such Company Option is intended to qualify as an “incentive stock option” under as defined in Section 422 of the Code so qualifies Code; and (vii) whether such Company Option may be early-exercised; and (viii) the extent to which such Company Option has been early exercised. 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, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto and is in full force and effect, each such grant was made in accordance with the terms of the Company Stock Plan and all other applicable Legal Requirements, the per share exercise price of each Company Option was not less more than or equal to the fair market value of a share of Company Common Stock on the applicable Grant Date as determined under Section 409A of the Code and each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company. All options with respect to shares of Company Common Stock that were ever issued by the Company ceased to vest on the date on which the holder thereof ceased to be an employee, consultant or director of grantan Acquired Entity. As of the Reference DateEffective Time, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar former holder of a Company Option will have any rights or equity based awards with respect to any Company Option other than as set forth in Sections 2.2(b) the rights contemplated by Section 1.6. The Company has delivered to Parent an accurate and (c) complete copy of the Company Disclosure ScheduleStock Plan, each form of agreement used thereunder and each Contract pursuant to which any Company Option is outstanding.

Stock Options. As At or immediately prior to the Effective Time, each outstanding employee and director stock option to purchase Shares (an "Option") granted under the Howe▇▇ ▇▇▇ustries, Inc. 1995 Stock Incentive Plan for Key Employees (such plans or arrangements, the "Company Stock Option Plan"), shall be canceled, and each holder of any such Option, whether or not then vested or exercisable, shall be paid by the close of business on Company, at or immediately prior to the Reference Date: Effective Time for each such Option, in consideration therefor an amount in cash determined by multiplying (i) 7,785,062 shares the excess, if any, of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under $37.00 per Share over the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) exercise price of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and such Option by (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares Shares such holder could have purchased (assuming full vesting of all Options) had such holder exercised such Option in full immediately prior to the Effective Time. The Company Common Stock subject shall use all reasonable efforts to such Company Optioneffectuate the foregoing, (4) including without limitation, amending the exercise price of such Company OptionOption Plans and obtaining any necessary consents from Option holders; provided, (5) however, that prior to the date on which such Company Option was grantedEffective Time, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of the Company (shall adopt such resolutions or a duly authorized committee or subcommittee thereof) take such other actions as are required to adjust and which action, if any, shall be acceptable in material compliance with all reasonable respects to the Parent, effective immediately prior to the Effective Time, the terms of each outstanding Option as to which any such consent is not obtained prior to the Effective Time to provide that such Option shall be converted into the right, upon exercise of such Option at any time after the Effective Time, to receive an amount in cash equal to $37.00 for each Share subject to such Option, or, alternatively, upon the surrender and cancellation of such Option at any time after the Effective Time to receive an amount in cash determined by multiplying (i) the excess, if any, of $37.00 per Share over the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company such Option is not less than by (ii) the fair market value number of a share of Company Common Stock as determined on the date of grant of Shares subject to such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding in either case without interest or authorized stock appreciation, phantom stock, profit participation or any other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleadjustment thereto.

Stock Options. As (1) At the Effective Time, each option granted by W▇▇▇▇▇▇ ▇▇▇▇ to purchase shares of W▇▇▇▇▇▇ ▇▇▇▇ Common Stock (“W▇▇▇▇▇▇ ▇▇▇▇ Option”) which is outstanding and unexercised immediately prior to the Effective Time, whether or not then vested and exercisable, shall cease to represent a right to acquire shares of W▇▇▇▇▇▇ ▇▇▇▇ Common Stock and shall be converted automatically into an option to purchase shares of Mid Penn Common Stock, and Mid Penn shall assume each W▇▇▇▇▇▇ ▇▇▇▇ Option, and, thereafter, each such assumed W▇▇▇▇▇▇ ▇▇▇▇ Option shall continue to be subject to the terms of the close of business on applicable W▇▇▇▇▇▇ ▇▇▇▇ Benefit Plan or other agreement by which it is evidenced, except that from and after the Reference Date: Effective Time, (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) Mid Penn and a disinterested committee of the Company Disclosure Schedule (Mid Penn board of directors shall be substituted for W▇▇▇▇▇▇ ▇▇▇▇ and the “Company Stock Plans”) (equity or other equity-based awardscommittee of the W▇▇▇▇▇▇ ▇▇▇▇ board of directors administering such W▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Plan, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 each W▇▇▇▇▇▇ ▇▇▇▇ Option assumed by Mid Penn may be exercised solely for shares of Company Mid Penn Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was grantedStock, (2) the name of the holder of such Company Option, (3iii) the number of shares of Company Mid Penn Common Stock subject to such Company Option, (4) W▇▇▇▇▇▇ ▇▇▇▇ Option shall be equal to the exercise price number of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company W▇▇▇▇▇▇ ▇▇▇▇ Common Stock subject to issuance under such W▇▇▇▇▇▇ ▇▇▇▇ Option immediately prior to the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved Effective Time multiplied by the Board Exchange Ratio, provided that any fractional shares of Directors of Company Mid Penn Common Stock resulting from such multiplication shall be rounded down to the nearest share and (or a duly authorized committee or subcommittee thereofiv) in material compliance with the terms per share exercise price under each such W▇▇▇▇▇▇ ▇▇▇▇ Option shall be adjusted by dividing the per share exercise price under each such W▇▇▇▇▇▇ ▇▇▇▇ Option by the Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. Notwithstanding clauses (iii) and (iv) of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of immediately preceding sentence, each Company W▇▇▇▇▇▇ ▇▇▇▇ Option which is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 shall be adjusted as required by Sections 409A and 424 of the Code so qualifies Code, and the per share exercise price regulations and guidance promulgated thereunder, so as not to constitute a modification, extension or renewal of each Company Option was not less than the fair market value option within the meaning of Sections 409A and 424(h) of the Code. Mid Penn and W▇▇▇▇▇▇ ▇▇▇▇ agree to take all necessary steps to effect the foregoing provisions of this Section 3.1(e)(1), including in the case of Mid Penn taking all corporate action necessary to reserve for issuance a share sufficient number of Company shares of Mid Penn Common Stock on the applicable date of grant. As for delivery upon exercise of the Reference Dateoptions to issue shares of Mid Penn Common Stock issued in accordance herewith. (2) As soon as practicable after the Effective Time, there are no outstanding Mid Penn shall use its reasonable efforts to file a registration statement on Form S-3 or authorized stock appreciationForm S-8, phantom stock, profit participation as the case may be (or any successor or other similar rights or equity based awards appropriate forms), with respect to Company other than as set forth the shares of Mid Penn Common Stock subject to the options referred to in Sections 2.2(bSection 3.1(e)(1) and shall use its reasonable efforts to maintain the current status of the prospectus or prospectuses contained therein for so long as such options remain outstanding in the case of a Form S-8 or, in the case of a Form S-3, until the shares subject to such options may be sold without a further holding period under Rule 144 of the Securities Act. (c3) As soon as practicable after the Effective Time, Mid Penn shall deliver to the holders of W▇▇▇▇▇▇ ▇▇▇▇ Options at the Effective Time appropriate notices setting forth the effect of the adjustments described in Section 3.1(e)(1) and advising of the registration of the shares of Mid Penn Common Stock issuable upon exercise thereof after consummation of the Merger. (4) With respect to those individuals who, subsequent to the Merger, will be subject to the reporting requirements under Section 16(a) of the Company Disclosure ScheduleExchange Act, where applicable, Mid Penn shall administer the W▇▇▇▇▇▇ ▇▇▇▇ Benefit Plans in a manner consistent with the exemptions provided by Rule 16b-3 promulgated under the Exchange Act.

Stock Options. As of (a) Except as provided in (c) below with respect to the close of business on Company's 1997 Employee Stock Purchase Plan, as amended (the Reference Date: (i) 7,785,062 "Company ESPP"), each option to purchase shares of Company Common Stock were subject to issuance pursuant to that is outstanding at the Effective Time, whether or not exercisable and whether or not vested (a "Company Options (as defined belowOption") to purchase Company Common Stock under shall, without any action on the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) part of the Company Disclosure Schedule or the holder thereof, be assumed by Parent in such manner that Parent (i) is a corporation "assuming a stock option in a transaction to which Section 424(a) applies" within the “Company Stock Plans”) (equity meaning of Section 424 of the Code and the regulations thereunder or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under to the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as extent that Section 424 of the Reference Date, and (1) the particular Company Stock Plan pursuant Code does not apply to which such Company Option was granted, (2) the name of the holder of any such Company Option, would be such a corporation were Section 424 of the Code applicable to such Company Option. From and after the Effective Time, all references to the Company in the Company Options shall be deemed to refer to Parent. The Company Options assumed by Parent shall be exercisable upon the same terms and conditions as under the Company Options (3including provisions regarding vesting and the acceleration thereof) except that (i) such Company Options shall entitle the holder to purchase from Parent the number of shares of Parent Common Stock (rounded down to the nearest whole number of such shares) that equals the product of the Conversion Ratio multiplied by the number of shares of Company Common Stock subject to such Company OptionOption immediately prior to the Effective Time, (4ii) the option exercise price per share of Parent Common Stock shall be an amount (rounded up to the nearest full cent) equal to the option exercise price per share of Company Common Stock in effect immediately prior to the Effective Time divided by the Conversion Ratio, and (iii) the Company Options shall vest to the extent required pursuant to the current terms of such Company Options or other agreements as described in Section 1.7 of the Company Disclosure Schedule (as defined below); provided that if such vesting of Company Options or other provisions with respect to the Company Options would jeopardize the Merger being accounted for as a "pooling of interests", then the Company shall, subject to Parent's written consent not to be unreasonably withheld, use reasonable best efforts to prevent such vesting or effect of other provisions. Except to the extent required pursuant to the current terms of such Company Options or other agreements as described in Section 1.7 of the Company Disclosure Schedule (as defined below), the Company shall not take any action to accelerate the vesting of any Company Options. Prior to the Effective Time, the Board of Directors of Parent shall, for purposes of Rule 16b-3(d)(1) promulgated under Section 16 of the Securities Exchange Act of 1934, and the rules and regulations thereunder (the "1934 Act"), specifically approve (i) the assumption by Parent of the Company Options and (ii) the issuance of Parent Common Stock in the Merger to directors, officers and stockholders of the Company subject to Section 16 of the 1934 Act. (b) As promptly as practicable after the Effective Time, Parent shall issue to each holder of a Company Option a written instrument informing such holder of the assumption by Parent of such Company Option. As soon as reasonably practicable after the Effective Time (and in any event no later than five business days after the Effective Time, provided current option information required therefor is delivered to Parent at the Effective Time), Parent shall file a registration statement on Form S-8 (5or any successor form) with respect to the date shares of Parent Common Stock subject to Company Options and shall use commercially reasonable efforts to maintain such registration statement (or any successor form), including the current status of any related prospectus or prospectuses, for so long as the Company Options remain outstanding. In addition, Parent shall use commercially reasonable efforts to cause the shares of Parent Common Stock subject to Company Options to be listed on the NYSE and such other exchanges as Parent shall determine. Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Options pursuant to the terms set forth in this Section 1.7. Parent shall comply with the terms of the Company Stock Option Plans (as defined in Section 3.3) and use commercially reasonable efforts to cause those Company Options which such Company Option was granted, qualified as incentive stock options prior to the Effective Time to continue to qualify as incentive stock options immediately after the Effective Time. (6c) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable The current offerings in process as of the Reference Datedate of this Agreement under the Company ESPP shall continue, and (7) shares shall be issued to participants thereunder on the next currently scheduled purchase dates thereunder occurring after the date hereof as provided under, and subject to the terms and conditions of, the Company ESPP. The Company may, consistent with past practice, commence a new offering period under the Company ESPP on which or after February 1, 1999 and prior to the Effective Time at an exercise price for such offering not less than as is required under the Company Option expiresESPP. All Immediately prior to the Effective Time, pursuant to Section 12(b) of the Company ESPP, all offerings under the Company ESPP shall be terminated, and each participant shall be deemed to have purchased immediately prior to the Effective Time, to the extent of payroll deductions accumulated by such participant as of such offering period end, the number of whole shares of Company Common Stock subject at a per share price determined pursuant to issuance the provisions of the Company ESPP, and each participant shall receive a cash payment equal to the balance, if any, of such accumulated payroll deductions remaining after such purchase of such shares. As of the Effective Time, each participant shall receive, by virtue of the Merger, the number of whole shares of Parent Common Stock into which the shares of Company Common Stock such participant has so purchased under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments ESPP have been converted pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (Merger as defined provided in Section 2.4(b)1.3(a) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price hereof, plus the cash value of each Company Option is not less than the fair market value any fraction of a share of Company Parent Common Stock as determined on the date of grant of such provided in Section 1.5(f) hereof, plus any dividends or distributions as provided in Section 1.5(c). The Company Option. Each Company Option intended to qualify ESPP and all purchase rights thereunder shall terminate effective as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleEffective Time.

Stock Options. As (a) Subject to the terms and conditions of the close Employee Stock Option Plan of business ATS (the "ATS Option Plan") and the stock option agreements with each of ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇, the ATS Option Plan and each option to purchase ATS Stock granted thereunder that is outstanding on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) Effective Date of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awardsMerger, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding shall be assumed by Vertex as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name Effective Date of the holder Merger and continued in accordance with its respective terms and each such option shall become a right to purchase a number of shares of Vertex Common, as more fully described below. (b) At the Effective Date of the Merger, each outstanding option to purchase shares of ATS Stock (a "ATS Stock Option") under the ATS Option Plan, whether vested or unvested, shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company ATS Stock Option, a number of shares of Vertex Common equal to the product (3rounded down to the nearest whole share) of (i) the number of shares of Company ATS Stock issuable upon exercise of the option immediately prior to the Effective Date of the Merger and (ii) the Exchange Ratio; and the exercise price per share of Vertex Common Stock subject at which such option is exercisable shall be the amount (rounded up to such Company Option, the nearest whole cent) obtained by dividing (4x) the exercise price per share of ATS Stock at which such Company Option, option is exercisable immediately prior to the Effective Date of the Merger by (5y) the date on which such Company Exchange Ratio; provided, however, that, in the case of any ATS Stock Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as Section 421 of the Reference DateCode applies by reason of its qualification under any of Sections 422-424 of the Code ("qualified stock options"), the exercise price, the number of shares purchasable pursuant to such option and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified of exercise of such option shall be determined in order to comply with Section 425(a) of the Code. (c) As soon as practicable after the Effective Date of the Merger, Vertex shall deliver to the participants in the instruments ATS Option Plan appropriate notices setting forth such participants' rights pursuant thereto and that the grants pursuant to which they are issuedthe ATS Option Plan shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 3.5 after giving effect to the Merger), are duly authorized and will be validly issued, fully paid and nonassessableproviding for the assumption by Vertex of such participant options. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance Vertex shall comply with the terms of the applicable Company Benefit ATS Option Plan and ensure, to the extent required by, and subject to the provisions of the ATS Option Plan and applicable laws, that ATS Stock Options which qualified as qualified stock options prior to the Effective Date of the Merger continue to qualify as qualified stock options after the Effective Date of the Merger. (d) Vertex shall take all applicable Legal Requirements and recorded on corporate action necessary to reserve for issuance a sufficient number of shares of Vertex Common for delivery under the Company Financials (ATS Option Plan as defined in Section 2.4(b)) adjusted in accordance with GAAP this Section 3.5. Vertex shall, within fifteen (15) days after such time as defined financial results covering at least thirty (30) days of combined operations of Vertex and ATS have been published by Vertex in Section 2.4(b)). The exercise price of each Company Option is not less than its annual report to the fair market value SEC, in the form of a share quarterly earnings report, an effective registration statement filed with the SEC, a report to the SEC on form 10-K, 10-Q or 8-K, or any other public filing or announcement which includes the combined results of Company Common Stock operations, (or such other combined financial information as determined may be required for registration), but in any event not later than May 14, 2001, file and have declared effective a registration statement on Form S-8 promulgated by the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” SEC under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding Securities Act (or authorized stock appreciation, phantom stock, profit participation any successor or other similar rights or equity based awards appropriate form) with respect to Company other than the Vertex Common subject to ATS Stock Options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as set forth in Sections 2.2(b) and (csuch options remain outstanding. With respect to those individuals who subsequent to the Merger will be subject to the reporting requirements under Section 16(a) of the Company Disclosure ScheduleExchange Act, where applicable, Vertex shall administer the ATS Option Plan in a manner that complies with Rule 16b-3 promulgated under the Exchange Act.

Stock Options. As (a) At the Effective Time, each outstanding option to purchase shares of VCAM Common Stock (a "VCAM STOCK OPTION") issued pursuant to the VCAM Stock Plans, whether vested or unvested, shall be assumed by ADP. Each VCAM Stock Option shall be deemed, without further action on the part of ADP or the holders of such VCAM Stock Options, to constitute an option to acquire, on the same terms and conditions as were applicable under such VCAM Stock Option (except to the extent that such terms and conditions may be altered in accordance with their terms as a result of the close transactions contemplated hereby including accelerated vesting of business on VCAM Stock Options which shall occur by virtue of consummation of the Reference Date: (i) 7,785,062 shares of Company Common Merger to the extent required with respect to the VCAM Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b3.1(c) of the Company VCAM Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cashSchedule), shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company ADP Common Stock are reserved for future issuance under in such amount and at the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and exercise price provided below: (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3i) the number of shares of Company ADP Common Stock to be subject to the option (as adjusted) shall be equal to the product of (x) the number of shares of VCAM Common Stock subject to the original option and (y) the Exchange Ratio (rounded to four decimal points); (ii) the exercise price per share of ADP Common Stock under the option (as adjusted) shall be equal to (x) the exercise price per share of VCAM Common Stock under the original option divided by (y) the Exchange Ratio (rounded to the nearest $0.01); and (iii) in accordance with the terms of the VCAM Stock Option Plan under which the VCAM Stock Options were issued, fractional shares of any assumed VCAM Stock Options resulting from the adjustments set forth in this Section 2.3(a) shall be eliminated. In the case of any option to which section 421 of the Code applies by reason of its qualification under any of sections 422-424 of the Code, the exercise price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be effected in a manner consistent with the requirements of section 424(a) of the Code. (b) As soon as practicable after the Effective Time, ADP shall deliver to the holders of VCAM Stock Options appropriate notices setting forth such holders' rights pursuant to the respective VCAM Stock Plans and the agreements evidencing the grants of such VCAM Stock Options and that such options and the related option agreements shall be assumed by ADP and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.3 after giving effect to the Merger). (c) ADP shall take all corporate action necessary to reserve for issuance a sufficient number of shares of ADP Common Stock for delivery upon exercise of the VCAM Stock Options assumed in accordance with this Section 2.3. No later than the Effective Time, ADP shall prepare and file a registration statement on Form S-8 (or any successor or other appropriate forms), or another appropriate form with respect to the shares of ADP Common Stock subject to such Company Option, (4) options and shall use its reasonable commercial efforts to maintain the exercise price effectiveness of such Company Option, registration statement or registration statements (5) and maintain the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as current status of the Reference Date, prospectus or prospectuses contained therein) for so long as such options remain outstanding and (7) the date on which cause such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance be listed on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure ScheduleNYSE.

Stock Options. As (a) The Company's board of the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject directors shall take all actions necessary or appropriate to issuance pursuant to outstanding Company Options (as defined below) cause all options to purchase Company Common Stock under (individually, a "COMPANY STOCK OPTION" and collectively, the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b"COMPANY STOCK OPTIONS") granted to any current or former employee or director of the Company Disclosure Schedule under any of the Company's 1993 Stock Option Plan, 1985 Restated Stock Option Plan or Stock Option Plan for Non-Employee Directors, as amended, prior to the date hereof or in accordance with Section 4.2 (collectively, the “"COMPANY STOCK PLANS") and that are outstanding immediately prior to the Effective Time, whether or not then exercisable or vested, to terminate prior to the Effective Time. In lieu of the exercise of any such Company Stock Plans”) (equity or other equity-based awardsOption, whether payable the Company may, upon receipt of the written acceptance of such terms by a holder of a Company Stock Option, pay to any such holder of a Company Stock Option, an amount in cash, shares or otherwise, granted under or pursuant respect thereof equal to the product of (i) the excess, if any, of the (A) Cash Election Price over (B) the exercise price of each such Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), Option and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of shares of Company Common Stock previously subject to such Company OptionStock Option immediately prior to its cancellation (such payment to be net of withholding taxes). (b) Notwithstanding the provisions of Section 5.4(a), the Company shall use all reasonable best efforts to obtain the agreement of each of Jiri ▇. ▇▇▇▇▇▇▇▇, ▇▇ep▇▇▇ ▇. ▇▇▇▇▇ 40 and Patr▇▇▇▇ ▇. ▇▇▇▇▇▇ (4▇) not, in the aggregate, to exercise price of such Company Option, Stock Options for twenty-five percent (525%) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject thereto, (ii) to issuance under the applicable extent not exercised, to cancel such Company Benefit PlansStock Options and release any and all rights such holder had or may have had in respect of such Company Stock Options and (iii) for Jiri ▇. ▇▇▇▇▇▇▇▇ ▇▇▇y, upon issuance on in respect of clause (i)(A) of Section 5.4(a), to substitute $9.00 per share for the terms and conditions specified Cash Election Price. (c) Promptly following the Effective Time, the Company's board of directors shall take all actions necessary or appropriate to cause to be granted to the Company's optionees (other than the Company's executive officers) options to purchase that number of shares of Company Common Stock following the Merger (the "Reload Options") such that the percentage interest in the instruments pursuant Company following the Merger represented by the Company Common Stock subject to which the Reload Options equals the percentage interest in the Company currently represented by the Company Common Stock subject to the Company Stock Options. This Section 5.4(c) is intended to establish the aggregate number of Reload Options only, and the determination of the individuals who will receive Reload Options, and the number of options they are issuedwill receive, are duly authorized will be determined by the Company and MergerCo and will not necessarily be validly issued, fully paid and nonassessable. All grants equal to the number of Company Options were validly issued and properly approved by options such individuals held prior to the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b))Merger. The Reload Options shall be granted with an exercise price of each Company Option is not less than per share equal to the fair market value of a share of Company Common Stock as determined on at the date time of grant grant. (d) Promptly following the Effective Time, the Company's board of such Company Option. Each Company Option intended directors shall take all actions necessary or appropriate to qualify as an “incentive stock option” under Section 422 cause to be granted to each of the Code so qualifies and Company's executive officers options to purchase that number of shares of Company Common Stock following the Merger (a "Management Reload Option") such that such management optionholder's percentage interest in the Company following the Merger represented by the Company Common Stock subject to such Management Reload Option equals the sum of the management optionholder's percentage interest in the Company represented by the Company Common Stock previously subject to the Company Stock Option immediately prior to the Effective Time (the "Pre-Merger Option Interest") plus twenty-five percent (25%) of the Pre-Merger Option Interest. The Management Reload Options shall be granted with an exercise price per share exercise price of each Company Option was not less than equal to the fair market value of a share of Company Common Stock on at the applicable date time of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Schedule.

Stock Options. As (i) At the Effective Time, each Company Option, whether vested or unvested, shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Option, the number of American Depositary Shares of Parent (the "ADS'S"), each of which represents four Parent Ordinary Shares, equal to the result (rounded down to the nearest whole ADS) of multiplying the number of Shares subject to the Company Option immediately prior to the Effective Time by the Conversion Ratio (as defined below), at an exercise price per ADS equal to the result (rounded up to the nearest whole cent) of dividing the per share exercise price of such Company Option immediately prior to the Effective Time by the Conversion Ratio (it being understood that the exercise price shall be converted into dollars at the rate prevailing at the close of business on the Reference Date: (i) 7,785,062 shares business day prior to the Effective Time); PROVIDED, HOWEVER, that in the case of any Company Common Stock were subject Option to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under which Section 422 of the applicable Company Benefit Plans that are stock plans as set forth Code applies, the adjustments provided for in this Section 2.12(bshall be effected in a manner consistent with the requirements of Section 424(a) of the Code. At or prior to the Effective Time, the Company Disclosure Schedule (shall make all necessary arrangements with respect to the “Stock Plans to permit the assumption of the unexercised Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or Options by Parent pursuant to this Section. For purposes of this Section, the Company Stock Plansterm "CONVERSION RATIO" means a fraction, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares the numerator of Company Common Stock are reserved for future issuance under which is the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as average of the Reference Date, high and (1) low sales price of one Share on the particular Company Stock Plan pursuant to NYSE on the trading day immediately preceding the Effective Time and the denominator of which such Company Option was granted, (2) is the name average of the high and low sales price of one ADS on the NYSE on the trading day immediately prior to the Effective Time. Notwithstanding the foregoing, each holder of such Company Option, if such holder elects in writing delivered to the Company at least three business days prior to the Effective Time, may at the Effective Time exchange each such Company Option, whether or not then exercisable, for an amount in cash to be paid by the Company, equal to the product of (3x) the number of shares of Company Common Stock Shares previously subject to such Company Option, Option and (4y) the excess of the difference between the Merger Consideration over the per Share exercise price of such Company Option, (5) less any amount the date on which Company is required to deduct or withhold with respect to such payment. Each such Company Option so exchanged shall be immediately canceled. (ii) Effective at the Effective Time, Parent shall assume each Company Option still outstanding in accordance with the terms of the Stock Plan under which it was granted, (6) the applicable vesting schedule, issued and the extent stock option agreement by which it is evidenced. At or prior to which such Company Option was vested and exercisable as the Effective Time, Parent shall take all corporate action necessary to reserve for issuance a sufficient number of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, Parent Ordinary Shares for delivery upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants exercise of Company Options were validly issued assumed by it in accordance with this Section. As soon as practicable after the Effective Time, Parent shall file a registration statement on Form F-3 or Form S-8, as the case may be (or any successor or other appropriate forms), or another appropriate form with respect to the ADS's subject to such Company Options, and properly approved by shall use its reasonable best efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such Company Options remain outstanding. (iii) Prior to the Effective Time, the Board of Directors of Company (Parent, or an appropriate committee of non-employee directors thereof, shall adopt a duly authorized committee or subcommittee thereof) in material compliance resolution consistent with the terms interpretive guidance of the applicable Company Benefit Plan SEC so that the ADS's or options to acquire ADS's pursuant to this Agreement and all applicable Legal Requirements the Merger shall be an exempt transaction for purposes of Section 16 of the Exchange Act ("SECTION 16"). (iv) At the Effective Time, each outstanding Share awarded as a restricted Share shall be canceled and recorded on converted into the Company Financials (as defined in Section 2.4(b)) right to receive the Merger Consideration in accordance with GAAP (Section 4.1(a) of this Agreement; PROVIDED, HOWEVER, that the restricted Shares shall not vest and the restrictions thereon shall not lapse on and until the first day immediately following the Effective Time, and the Merger Consideration shall thereafter be paid to each holder of such formerly restricted Shares at the same time and on the same terms as defined provided in Section 2.4(b))4.2 of this Agreement. The exercise price of each Company Option is not less than Prior to the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference DateEffective Time, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleshall take all necessary actions in order to effectuate the foregoing.

Stock Options. As of (a) At the close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) Effective Time, each option to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule Shares (the “a "Company Stock Plans”Option" or collectively "Company Stock Options") (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or issued pursuant to the Company Company's Tandem Stock PlansOption Plan or other agreement or arrangement, other than Company Restricted Stock whether vested or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”)unvested, and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) Effective Time shall be converted as of the particular Company Effective Time into options to purchase shares of Parent Common Stock Plan in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which such any Company Stock Option was granted, (2) has been issued or may be issued are referred to collectively as the name "Company Plans." Each Company Stock Option shall be deemed to constitute an option to acquire a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such Company Stock Option, whether or not vested, in full immediately prior to the Effective Time (3rounded to the nearest whole share) at a price per share (rounded to the nearest whole cent) equal to (i) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (ii) the product of (A) the number of shares of Company Common Stock subject Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (4B) the exercise price Exchange Ratio; provided, however, that in the case of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent any option to which such Company Option was vested and exercisable as Section 421 of the Reference Date, and (7) the date on which such Company Option expires. All shares Code applies by reason of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” its qualification under Section 422 of the Code so qualifies ("incentive stock options" or "ISOs") the option price, the number of shares purchasable pursuant to such option and the per share terms and conditions of exercise price of each Company Option was not less than such option shall be adjusted as necessary in order to comply with Section 424(a) of the fair market value of a share Code. (b) As soon as practicable after the date hereof, Parent shall deliver to the holders of Company Stock Options appropriate notices setting forth such holders' rights pursuant to the Company Plans and that the agreements evidencing the grants of such options shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 1.11 after giving effect to the Merger). Parent shall comply with the terms of the Company Plans and ensure, to the extent required by and subject to the provisions of such Company Plans, that Company Stock Options that qualified as incentive stock options prior to the Effective Time continue to qualify as incentive stock options of Parent after the Effective Time. (c) Parent shall cause a sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Stock Options assumed in accordance with this Section 1.11 to be reserved for issuance for as long as such options remain outstanding. Within six (6) months after the Effective Time, Parent shall (i) if no registration statement is in effect covering such shares of Parent Common Stock, file a registration statement on the applicable date of grant. As of the Reference Date, there are no outstanding Form S-8 (or authorized stock appreciation, phantom stock, profit participation any successor or other similar rights or equity based awards appropriate forms) with respect to the shares of Parent Common Stock subject to any Company other than Stock Options held by persons who are directors, officers or employees of the Company or its subsidiaries and shall use reasonable commercial efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such options remain outstanding and (ii) cause such shares of Parent Common Stock to be approved for listing on the Nasdaq National Market, subject to official notice of issuance. (d) After the Effective Time, all Company Stock Options assumed by Parent pursuant hereto shall henceforth generally be subject to and governed by Parent's stock option plan, subject to any irreconcilable conflict set forth in Sections 2.2(b) and (c) of any agreement between the Company Disclosure Scheduleand any holder of such Company Stock Options relating thereto, and the Company Plans shall terminate automatically at the Effective Time. At or before the Effective Time, the Company shall cause to be effected, in a manner reasonably satisfactory to Parent, such amendments, if any, to the Company Plans to give effect to the foregoing provisions of this Section 1.11.

Stock Options. As Prior to the Effective Time, the Company and Parent shall take such actions with respect to each stock option (each, an "Existing Company Options") set forth in Schedule 3.03 of the close volume of business disclosure schedules delivered by the Company to Parent on October 10, 1995 (the Reference Date: "Company Disclosure Volume") as may be necessary to cause such Existing Company Option to be assumed by Parent (i) 7,785,062 shares of Company Common Stock were such options after such assumption, the "Assumed Options"), subject to issuance pursuant the amendments described in this Section 2.04. Each Assumed Option shall continue to outstanding Company Options have, and be subject to, the same terms and conditions (as defined below) to purchase Company Common Stock under including, without limitation, the applicable Company Benefit Plans that are stock plans vesting schedule, as modified to reflect the change in the number of shares covered by such option as described herein) as set forth in Section 2.12(b) of the Company Disclosure Schedule stock option plan and agreement (the “Company Stock Plans”) (equity or other equity-based awards, whether payable as in cash, shares or otherwise, granted under or pursuant effect immediately prior to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (iiEffective Time) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Existing Company Option was grantedissued, except that (i) all references to the Company shall be deemed to be references to Parent (or, with respect to employment, Parent or its subsidiaries), (2ii) each option shall be exercisable for that number of whole shares of Parent Common Stock equal to the name product of the holder of such Company Option, (3) the number of shares of Company Common Stock subject covered by such option immediately prior to such Company Option, the Effective Time multiplied by the Exchange Ratio and rounded down to the nearest whole number of shares of Parent Common Stock and (4iii) the exercise price per share of Parent Common Stock under such Company Option, (5) option shall be equal to the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares exercise price per share of Company Common Stock subject to issuance under the applicable Existing Company Benefit Plans, upon issuance on Option divided by the terms Exchange Ratio and conditions specified in rounded down to the instruments pursuant nearest cent. The adjustment provided herein with respect to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of any Existing Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials that are "incentive stock options" (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies Code) shall be and is intended to be effected in a manner that is consistent with Section 424(a) of the per share Code. Parent shall (i) reserve for issuance the number of shares of Parent Common Stock that will become issuable upon the exercise price of such Assumed Options pursuant to this Section 2.04 and (ii) promptly after the Effective Time issue to each holder of an outstanding Existing Company Option was not less than a document evidencing the fair market value of a share of Company Common Stock on the applicable date of grant. As assumption by Parent of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards Company's obligations with respect thereto under this Section 2.04. Nothing in this Section 2.04 shall affect the schedule of vesting with respect to Company other than Stock Options to be assumed by Parent as set forth provided in Sections 2.2(bthis Section 2.04. Promptly after the Effective Time, Parent shall file a registration statement on Form S-8 with the Securities and Exchange Commission (the "SEC") and (c) covering the shares of Parent Common Stock to be issued upon exercise of the Company Disclosure ScheduleAssumed Options, shall use reasonable best efforts to cause such registration statement to become and remain effective so long as any Assumed Options are outstanding, and shall reserve a sufficient number of shares of Parent Common Stock for issuance upon exercise thereof.

Stock Options. As of (a) At the close of business on Effective Time, each option granted by the Reference Date: (i) 7,785,062 Company to purchase shares of Company Common Stock were (each an "Option," and collectively, "Options"), which is outstanding and unexercised immediately prior to the Effective Time, shall, at the option of the holder of such Option, be converted pursuant to either Section 1.3(a)(i) or (ii) below: (i) each Option held by a holder of an Option who, prior to the Effective Time, delivers an agreement in the form of Exhibit A-1 attached hereto ("Conversion Agreement") shall be converted into an option to purchase shares of Purchaser Common Stock in such number and at such exercise price as set forth herein and otherwise having the same terms and conditions as in effect immediately prior to the Effective Time (except to the extent that such terms, conditions and restrictions may be altered in accordance with their terms as a result of the Merger contemplated hereby, and except that any limited rights related to such Option shall be cancelled and of no further force or effect): (x) the number of shares of Purchaser Common Stock to be subject to issuance the converted Option shall be equal to the product of (A) the number of shares of Company Common Stock subject to the original Option and (B) the Exchange Ratio; (y) the exercise price per share of Purchaser Common Stock under the converted Option shall be equal to (A) the exercise price per share of Company Common Stock under the original Option divided by (B) the Exchange Ratio; and (z) upon exercise of each Option by a holder thereof, the aggregate number of shares of Purchaser Common Stock deliverable upon such exercise shall be rounded down, if necessary, to the nearest whole share and the aggregate exercise price shall be rounded up, if necessary, to the nearest cent; or (ii) each Option not converted pursuant to outstanding Section 1.3(a)(i) above, shall be converted into the right to receive cash, to be paid in accordance with this Section 1.3(a)(ii). All Options converted to cash pursuant to this Section 1.3(a)(ii) shall terminate effective immediately prior to the Effective Time. In consideration of the foregoing, Purchaser shall make or shall cause to be made a cash payment to the holder of each Option, at the time provided in the final sentence of this Section 1.3(a)(ii), in an amount (less any applicable withholding taxes) equal to the number of shares of Company Common Stock covered by such Option multiplied by the amount by which the Merger Consideration exceeds the exercise price per share of Company Common Stock under the Option converted by such holder. A holder of an Option who has executed a cancellation agreement, substantially in the form of Exhibit A-2 attached hereto ("Cancellation Agreement"), that is delivered by the Company to Purchaser (x) prior to the Effective Time shall be paid the amount to be paid pursuant to this Section 1.3(a)(ii) at the Closing (as defined below), and (y) after the Effective Time shall be paid the amount to be paid pursuant to this Section 1.3(a)(ii) within five (5) business days of Purchaser's receipt of such Cancellation Agreement. The adjustments provided herein with respect to any Options that are "incentive stock options" (as defined in Section 422 of the Code) shall be effected in a manner consistent with the requirements of Section 424(a) of the Code. (b) The Company shall amend each Company Stock Option Plan (as defined below) to purchase provide for the conversion or cancellation of Options in accordance with this Section 1.3 (such amendments may be referred to herein together as the "Plan Amendments"). The Company Common Stock under shall also provide to Purchaser a notice identifying the conversion option applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) to holders of the Company Disclosure Schedule Options under Section 1.3(a) not less than five (the “Company Stock Plans”5) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant business days prior to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and Effective Time. Such notice shall provide: (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2i) the name of the holder of such Company Option, ; (3ii) the number of shares of Company Common Stock subject to such Company Option, ; (4iii) the exercise price of such Company Option, (5) the date on which such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, ; and (7iv) whether such Option shall be converted or cancelled as selected by the date on which holder of such Option. In the event the Company fails to provide a conversion method for an Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuedthis Section 1.3, are duly authorized such Option shall be cancelled and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in pursuant to Section 2.4(b1.3(a)(ii)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Schedule.

Stock Options. As of the close of business on the Reference Date: (i) 7,785,062 At the Effective Time, each Company Option, whether vested or unvested, shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Option, the same number of 41 49 shares of Company Parent Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (the “Company Stock Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of such Company OptionOption would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time (rounded down to the nearest whole number), at a price per share (3rounded up to the nearest whole cent) equal to (y) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Option divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to such Company Option in accordance with the foregoing; provided, however, that in the case of any Company Option to which Section 422 of the Code applies, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. At or prior to the Effective Time, the Company shall make all necessary arrangements with respect to the Stock Plans to permit the assumption of the unexercised Company Options by Parent pursuant to this Section. (ii) Effective at the Effective Time, Parent shall assume each Company Option in accordance with the terms of the Stock Plan under which it was issued and the stock option agreement by which it is evidenced. At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Options assumed by it in accordance with this Section and, to the extent required under applicable SEC rules, take all corporate actions necessary or appropriate to obtain shareholder approval at a stockholders' meeting selected by Parent with respect to such Stock Plan to the extent such approval is required to enable such Stock Plan to comply with Rule 16b-3 under the Exchange Act. As soon as practicable after the Effective Time, Parent shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor form), or on another appropriate form (or shall cause such Company Option to be deemed an option issued pursuant to a Parent Stock Plan for which shares of Parent Common Stock have previously been registered pursuant to an appropriate registration form), with respect to the Parent Common Stock subject to such Company OptionOptions, (4) and shall use its best efforts to maintain the exercise price effectiveness of such Company Option, registration statements (5and maintain the current status of the prospectus or prospectuses contained therein) the date on which for so long as such Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Option was vested and exercisable as of the Reference Date, and (7) the date on which such Company Option expires. All shares of Company Common Stock subject to issuance under the applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan and all applicable Legal Requirements and recorded on the Company Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The exercise price of each Company Option is not less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option. Each Company Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable date of grant. As of the Reference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Disclosure Scheduleremain outstanding.