Common use of Stock Options Clause in Contracts

Stock Options. (a) As additional compensation for his services hereunder, the Corporation shall grant to Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. (a) As additional compensation for his services hereunderPrior to the Effective Time, the Corporation Board of Directors of CEI (or, if appropriate, any committee administering the CEI Stock Plans) shall grant adopt such resolutions or take such other actions as may be required to Executive effect the following: (i) adjust the terms of all outstanding CEI Stock Options under the CEI Stock Plans, whether vested or unvested, as necessary to provide that, at the Effective Time, each CEI Stock Option outstanding immediately prior to the Effective Time shall be amended and converted into an option under the Corporation's 1993 (a "Company Stock Option Plan (the "PlanOption") to acquire a total acquire, on the same terms and conditions as were applicable under such CEI Stock Option, including vesting, the same number of 400,000 shares of Company Common Stock at the Corporation's common stock at an exercise same price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Company Common Stock, ; (ii) one option letter agreement in ensure that the form annexed as Exhibit "A-2" hereto ("Option Letter A-2"conversion pursuant to Section 2.01(a) being exercisable for 150,000 shares of the CEI Common Stock held by any director or officer of CEI and the conversion pursuant to this Section 5.06(a) into Company Stock Options of CEI Stock Options held by any director or officer of CEI will be eligible for exemption under Rule 16b-3(e); and (iii) one option letter agreement in make such other changes to the form annexed CEI Stock Plans as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred may be appropriate to collectively herein as give effect to the "Plan Option Letters")CEI Merger. (b) The Prior to the Effective Time, the Board of Trustees of NU (or, if appropriate, any committee administering the NU Stock Plans) shall adopt such resolutions or take such other actions as may be required to effect the following: (i) adjust the terms of all outstanding NU Stock Options under the NU Stock Plans, whether vested or unvested, as necessary to provide that, at the Effective Time, each NU Stock Option outstanding immediately prior to the Effective Time shall be amended and converted into a Company represents Stock Option to acquire, on the same terms and warrants that there are sufficient conditions as were applicable under such NU Stock Option, including vesting, the same number of shares of Company Common Stock currently available under (rounded down to the Company's 1993 nearest whole share) as the holder of such NU Stock Option Plan would have been entitled to receive pursuant to the NU Merger had such holder exercised such NU Stock Option in full immediately prior to the Effective Time, at a price per share of Company Common Stock (rounded up to the "1993 Plan"nearest cent) equal to cover (A) the aggregate exercise price for the shares of NU Common Shares otherwise purchasable pursuant to such NU Stock Option divided by (B) the aggregate number of shares of Company Common Stock issuable deemed purchasable pursuant to Executive upon exercise such NU Stock Option; (ii) ensure that the conversion pursuant to Section 2.01(b) of Option Letter A-1the NU Common Shares held by any director or officer of NU and the conversion pursuant to this Section 5.06(b) into Company Stock Options of NU Stock Options held by any director or officer of NU will be eligible for exemption under Rule 16b-3(e); and (iii) make such other changes to the NU Stock Plans as CEI and NU may agree are appropriate to give effect to the NU Merger. (c) In Prior to the event that Effective Time, the Company's stockholders fail at the next annual meeting Board of stockholders Directors of the Corporation to approve both Company shall, (i) an amendment increasing with respect to each Company stock plan that will provide Company Stock Options (each, a "Company Stock Plan"), amend such Company Stock Plans as may be necessary to give effect to the CEI Merger and NU Merger and the conversion of CEI Stock Options and NU Stock Options provided herein, (ii) take such action as may be necessary to reserve for issuance under the Company Stock Plans a sufficient number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Company Common Stock issuable for delivery upon exercise of Option Letter A-2 Company Stock Options resulting from the conversion of CEI Stock Options and Option Letter B NU Stock Options, and (iiiii) appropriate amendments adopt such resolutions or take such other actions as may be required to the Plan specifically confirming the right ensure that each of the Corporation's Board of Directors, in the issuance of stock options under the Plan, conversion pursuant to determine provisions regarding terms Section 2.01(a) of the exercise CEI Common Stock held by any director or officer of such stock options (including without limitationCEI, the period conversion pursuant to this Section 5.06 into Company Stock Options of exercisability CEI Stock Options held by any director or officer of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employmentCEI, the Company agrees, upon receipt of a written demand from Executive, conversion pursuant to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions Section 2.01(b) of the Plan NU Common Shares held by any director or officer of NU and the conversion pursuant to this Section 5.06 into Company Stock OptionsOptions of NU Stock Options held by any director or officer of NU will be eligible for exemption under Rule 16b-3(e). (d) In As soon as practicable after the event that (i) Effective Time, the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior Company shall deliver to the expiration holders of the options evidenced by the Plan Option Letters CEI Stock Options and Executive is required after such event to pay any U.S. federal or state income and withholding tax NU Stock Options (collectively, the "Income TaxesStock Options") on any income recognized by Executive arising upon any exercise appropriate notices setting forth such holders' rights pursuant to the respective CEI Stock Plans or NU Stock Plans, as the case may be (collectively, the "Stock Plans"), and the agreements evidencing the grants of options evidenced such Stock Options, and that such Stock Options and agreements shall be assumed by the Plan Option Letters, Company and shall continue in effect on the Corporation agrees to reimburse Executive the difference between same terms and conditions (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal subject to the Tax Difference arising adjustments required by this Section 5.06 after giving effect to the Mergers). (e) 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 Stock Plans, or any other plan, program or arrangement of CEI, NU or any of their respective subsidiaries, to the extent that such restrictions or limitations shall not have already lapsed, shall remain in full force and effect with respect of to such exercise multiplied by a fraction, Stock Options after giving effect to the numerator of which is 1 Mergers and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid assumption by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphCompany as set forth above.

Stock Options. As of the close of business on the Reference Date: (ai) As additional compensation for his services hereunder, the Corporation shall grant 5,121,366 Company Ordinary Shares were subject to Executive an option issuance pursuant to outstanding Company Options (as defined below) to purchase Company Ordinary Shares under the Corporation's 1993 Stock Option applicable Company Share Plans (as defined below) (equity or other equity-based awards, whether payable in cash, shares or otherwise, whether or not granted under or pursuant to the Company Share Plans, other than Company Restricted Shares or Company Restricted Share Units, are referred to in this Agreement as “Company Options”), and (ii) 4,336,867 Company Ordinary Shares are reserved for future issuance under the Company Share Plans, including 746,812 shares reserved for issuance under Company’s 2006 Employee Shares Purchase Plan (the "“Company Employee Shares Purchase Plan"”). Section 2.2(c) to acquire a total of 400,000 shares of the Corporation's common Company Disclosure Schedule sets forth a complete and accurate list of all stock at an exercise price per share equal to the closing sale price of the Corporation's common stock as reported option plans or any other plan or agreement adopted by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available provides for the issuance of options equity to any Person (the “Company Share Plans”). Company has made available to Acquiror complete and accurate copies of all Company Share Plans and the forms of all award agreements evidencing outstanding awards under such plans. Company has made available to Acquiror a true and complete list of each Company Option outstanding as of the Reference Date, and (1) the particular Company Share Plan or other arrangement pursuant to which such Company Option was granted, (2) the name of the holder of such Company Option, (3) the number of Company Ordinary Shares 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, (7) the date on which such Company Option expires and (8) whether such Company Option is intended to qualify as a nonstatutory stock option or an “incentive stock option” within the meaning of Section 422 of the Code. All Company Ordinary Shares subject to issuance under the Plan applicable Company Share Plans, upon issuance on the terms and conditions specified in the instruments pursuant to an amount at least sufficient to cover which they are issued, would be duly authorized, validly issued and fully paid. All grants of Company Options were validly issued and properly approved by the Board of Directors of the Company (or a duly authorized committee or subcommittee thereof) in material compliance with all applicable Legal Requirements and recorded on the Company Financials in accordance with GAAP. 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 (whether payable in cash, shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (iior otherwise) appropriate amendments with respect to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive set forth in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%Sections 2.2(b) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphc).

Stock Options. (a) As additional compensation for his services hereunder, the Corporation shall grant to Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders As of the Corporation to approve both close of business on October 19, 2007: (i) an amendment increasing the number 3,359,430 shares of shares available for the Company Common Stock were subject to issuance of pursuant to outstanding options to purchase Company Common Stock under the Plan to an amount at least sufficient to cover all the shares of Common Company Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise Plans (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%“Company Options”) and (ii) 920,296 shares of Company Common Stock were reserved for future issuance pursuant to Company Options or other equity-based awards available for grant under the highest marginal Company Stock Plans. Since the close of business on October 19, 2007 through the execution of this Agreement, no Company Options have been granted and no shares of Company Common Stock have been reserved for future issuance pursuant to Company Options or other equity-based awards available for grant under the Company Stock Plans. There are no outstanding or authorized stock appreciation, phantom stock or other similar rights (whether payable in stock, cash or other property) with respect to the Company. (ii) Section 2.2(a) of the Company Disclosure Letter sets forth a list of each outstanding Company Option issued and (a) the particular Company Stock Plan (if any) pursuant to which such Company Option was granted, (b) the name and last known state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at domicile of the time holder of such exerciseCompany Option (provided, however, that the Company may redact names of employees (other than with respect to officers of the Company) from such list), (c) the number of shares of Company Common Stock subject to such Company Option, (d) the exercise price of such Company Option (and whether such option is subject to Section 409A of the Code), (e) the date on which such Company Option was granted, (e) the applicable vesting schedule (including any acceleration provisions with respect thereto), and the extent to which such Company Option is vested and exercisable as of the date hereof, (f) the date on which such Company Option expires, and (g) whether such Company Option is intended to qualify as an incentive stock option as defined in Section 422 of the Code. Such amount shall All shares of Company Common Stock subject to issuance under the Company Stock Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid by and nonassessable. True and complete copies of the Corporation within ninety forms of all agreements relating to Company Options issued under the Company Stock Plans have been provided to Parent, such forms of agreements are not materially different from the agreements evidencing such Company Options (90) days after any such exercise. Notwithstanding anything other than with respect to the contrary name of the holder, the per share exercise price, the number of shares subject to such Company Options and the applicable vesting schedule), and such agreements and instruments have not been amended, modified or supplemented, and the Company has no obligations under any Contract to amend, modify or supplement such agreements in this Agreement any case from the forms provided to Parent (or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphactual agreements evidencing such Company Options).

Stock Options. (a) As additional compensation for his services hereunderof the date of this letter agreement, you currently hold: (i) Options to purchase up to 125,000 shares of the Corporation shall grant to Executive an option Company’s common stock (the “Converted Options”) which were not issued under the Corporation's 1993 Company’s 2008 Stock Option Incentive Plan (the "“Stock Plan"”) and which were awarded to you under the Stock Option Agreement, attached as Attachment 1 (the “Stock Option Agreement”) to acquire a total the Agreement among you, various other individuals and the Company, dated June 11, 2008 (the “Agreement”). The Converted Options were converted from the 125,000 shares of 400,000 restricted stock originally awarded to you under the Restricted Stock Purchase Agreement attached as Attachment 1 (the “Restricted Stock Purchase Agreement”) to the Contingent Equity Agreement (the “Contingent Equity Agreement,” and together with the Stock Option Agreement, Agreement, Restricted Stock Purchase Agreement and Contingent Equity Agreement, the “Converted Option Agreements”) and are subject to the vesting schedule and other restrictions as set forth in the Converted Option Agreements and the Stock Plan; and (ii) Options to purchase up to 183,370 shares of the Corporation's Company’s common stock at an exercise price per share equal (the “Option Shares”), which were issued under the Stock Plan and which were awarded to you under the closing sale price of Incentive Stock Option and Reverse Vesting Agreement between you and the Corporation's common stock as reported by Company, dated June 17, 2008 (the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "“In-Plan Option Letters"Agreement”). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available You will continue to be eligible for participation under the Company's 1993 ’s Stock Option Plan (with any future awards being established pursuant to a recommendation by the "1993 Plan") to cover Compensation Committee of the shares Company’s Board of Common Stock issuable to Executive upon exercise Directors and approved by the Board of Option Letter A-1Directors. (c) In Your In-Plan Option Agreement shall be amended on the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation date hereof to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directorsprovide that, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) a Change of Control (defined below) occurs during your employment hereunder and (ii) your employment with the Corporation Company is required terminated by the Company (or its successor) without Cause at any time during the (12) twelve-month period following such Change of Control, then (x) without further action by the Company (or its successor) or the Company’s Board of Directors, all Option Shares shall accelerate and become vested and exercisable as of the date of such termination, and (y) you shall be entitled to amend receive the Plan Option Letters pursuant to Paragraph 5(cSeverance subject to, and in accordance with Section 11 of this letter agreement. As used herein, “Change of Control” means (i) a sale of all or substantially all of the assets of the Company and its subsidiaries taken as a whole or (ii) Executive's employment by a merger, consolidation or other similar business combination involving the Corporation is terminated (x) by Company, if, upon completion of such transaction the Corporation for any reason other than for Cause, (y) by Executive as a result beneficial owners of an Employer Breach or (z) by the Corporation by reason voting equity securities of the Executive's disability or death Company immediately prior to the expiration transaction beneficially own less than fifty percent of the options evidenced successor entity’s voting equity securities; provided, that “Change of Control” shall not include a transaction where the consideration received or retained by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise holders of options evidenced by the Plan Option Letters, then outstanding capital stock of the Corporation agrees to reimburse Executive the difference between (A) the amount Company does not consist primarily of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and cash or cash equivalent consideration, (ii) securities which are registered under the highest marginal state income tax rate applicable Securities Act of 1933, as amended (the “Securities Act”), or any successor statute and/or (iii) securities for which the Company or any other issuer thereof has agreed, including pursuant to Executivea demand, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation to file a registration statement within ninety (90) days after any such exercise. Notwithstanding anything of completion of the transaction for resale to the contrary in this Agreement or public pursuant to the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphSecurities Act.

Stock Options. (a) As additional compensation for his services hereunderAt the Effective Time, the Corporation shall grant each option or other right to Executive an option purchase shares of Target Common Stock pursuant to stock options ("Target Options") granted by Target under the Corporation's 1993 Target Stock Option Plan (Plans, which are outstanding at the "Plan") Effective Time, whether or not exercisable, shall be converted into and become rights with respect to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereofBuyer Common Stock, and Buyer shall assume each Target Option, in accordance with the terms of such the Target Stock Plan and stock option to be evidenced agreement by which it is evidenced, except that from and after the Effective Time, (i) one option letter agreement in Buyer and its Compensation Committee shall be substituted for Target and the form annexed as Exhibit "A" hereto Committee of Target's Board of Directors ("including, if applicable, the entire Board of Directors of Target) administering such Target Stock Plan, (ii) each Target Option Letter A-1") being exercisable assumed by Buyer may be exercised solely for 100,000 shares of Buyer Common Stock, (iiiii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 number of shares of Buyer Common Stock subject to such Target Option shall be equal to the number of shares of Target Common Stock subject to such Target Option immediately prior to the Effective Time multiplied by the Exchange Ratio (as the same may have been adjusted in accordance with Section 3.2) and (iv) the per share exercise price under each such Target Option shall be adjusted by dividing the per share exercise price under each such Target Option by the Exchange Ratio (as the same may have been adjusted in accordance with Section 3.2) and rounding up to the nearest cent. In addition, notwithstanding the provisions of clauses (iii) one option letter agreement in and (iv) of the form annexed as Exhibit first sentence of this Section 3.5, with respect to each Target Option which is an "Bincentive stock option" hereto ("Option Letter B"Buyer shall take no action that would constitute a modification, extension, or renewal of the option, within the meaning of Section 424(h) being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")Internal Revenue Code. (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under As soon as practicable after the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments Effective Time, Buyer shall deliver to the participants in each Target Stock Plan specifically confirming an appropriate notice setting forth such participant's rights pursuant thereto and the right of the Corporation's Board of Directors, grants pursuant to such Target Stock Plan shall continue in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially effect on the same terms and conditions (subject to the adjustments required by Section 3.5(a) after giving effect to the Merger), and Buyer shall comply with the terms of each Target Stock Plan to ensure, to the extent required by, and subject to the provisions of the Plan of, such Target Stock Options. (d) In the event Plan, that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive Target Options which qualified as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death incentive stock options prior to the expiration Effective Time continue to qualify as incentive stock options after the Effective Time. At or prior to the Effective Time, Buyer shall take all corporate action necessary to reserve for issuance sufficient shares of Buyer Common Stock for delivery upon exercise of Target Options assumed by it in accordance with this Section 3.5. As soon as practicable after the Effective Time, Buyer shall file a registration statement on Form S-8 (or any successor or other appropriate form), with respect to the shares of Buyer Common Stock subject to such options and shall use its reasonable efforts to maintain the effectiveness of such registration statements (and maintain the current status of the prospectus or prospectuses with respect thereto) for so long as such options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphremain outstanding.

Stock Options. At the Effective Time, by virtue of the Merger and without any action on the part of any holder of outstanding options to purchase Nova Common Stock (aeach a “Nova Option”) As additional compensation for his services hereunderpursuant to the Nova 2001 Nonstatutory Stock Option Plan, the Corporation shall grant Nova 2000 Stock Plan, the Nova 1998 Stock Plan and the Nova 1994 Flexible Stock Incentive Plan (collectively the “Nova Stock Plans”): (i) Subject to Executive an option the approval of Saturn’s stockholders at the Saturn Stockholders’ Meeting (as defined in Section 5.2(b)) in accordance with Saturn’s Bylaws, each Nova Option (other than those granted under the Corporation's 1993 Nova ESPP (as defined below)), whether vested or unvested, that is outstanding immediately prior to the Effective Time (A) under the Nova Stock Option Plans other than the Nova 1994 Flexible Stock Incentive Plan (the "Plan") to acquire a total of 400,000 shares of the Corporation's common stock at and has an exercise price per share of Nova Common Stock of $10.00 or less, and (B) under the Nova 1994 Flexible Stock Incentive Plan regardless of the exercise price (each, an “Assumed Nova Option”), will be assumed by Saturn and such Assumed Nova Option shall become an option to acquire shares of Saturn Common Stock, on the same terms and conditions as were applicable to such Assumed Nova Option immediately prior to the Effective Time, except that (1) such Assumed Nova Option shall be exercisable for that number of whole shares of Saturn Common Stock equal to the closing sale price product (rounded down to the nearest whole number of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Saturn Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing obtained by multiplying the number of shares available of Nova Common Stock issuable upon the exercise of such Assumed Nova Option immediately prior to the Effective Time by the Option Exchange Ratio (as defined herein), and (2) the per share exercise price for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Saturn Common Stock issuable upon exercise of such Assumed Nova Option Letter A-2 and Option Letter B and (ii) appropriate amendments shall be equal to the Plan specifically confirming quotient (rounded up to the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of nearest whole cent) obtained by dividing the exercise price per share of such stock options (including without limitation, Nova Common Stock for which the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Assumed Nova Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death was exercisable immediately prior to the expiration Effective Time by the Option Exchange Ratio. The “Option Exchange Ratio” shall mean the sum of the options evidenced by Per Share Stock Portion and the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax quotient of (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (Aa) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and Per Share Cash Portion divided by (Bb) the amount average of Income Taxes payable the closing trading prices of Saturn Common Stock as reported on the Nasdaq National Market (“Nasdaq”) during the five (5) trading days immediately preceding the date of the Closing (it being understood that the Per Share Cash Portion and the Per Share Stock Portion as may be modified by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive Section 1.6(b) shall be determined by assuming that used in calculating the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphExchange Ratio).

Stock Options. (a) As additional compensation for his services hereunder, the Corporation shall grant to Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale price close of the Corporation's common stock as reported by the American Stock Exchange business on the date hereofFebruary 13, with the terms of such option to be evidenced by 2003: (i) three million ninety one option letter agreement in the form annexed as Exhibit "A" hereto thousand three hundred sixty nine ("Option Letter A-1"3,091,369) being exercisable for 100,000 shares of NPS Common StockStock are subject to issuance pursuant to outstanding NPS Options, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) one option letter agreement thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the form annexed instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders a result of the Corporation Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to approve both NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) an amendment increasing the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of NPS Common Stock issuable upon subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option Letter A-2 was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option Letter B expires and (iiviii) appropriate amendments to whether the Plan specifically confirming exercisability of each such NPS Option will be accelerated in any way by the right transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms NPS Disclosure Letter also contains a complete and accurate description of the exercise of vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such stock options generally applicable vesting schedule (including without limitation, the period a description of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Optionseach such different vesting schedule). (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. (a) As additional compensation for his services hereunderSubsequent to the effectiveness of the Form 10, but prior to the consummation of the Distribution, and subject to the consummation of the Distribution, each option to purchase ALTISOURCE Common Stock (“ALTISOURCE Stock Options”) granted and outstanding under the 2009 Equity Incentive Plan of ALTISOURCE (“ALTISOURCE Option Plan”) shall remain granted and outstanding and shall not, and ALTISOURCE shall cause (to the maximum extent permitted under the ALTISOURCE Option Plan) the ALTISOURCE Stock Options not to, terminate, accelerate or otherwise vest as a result of the Distribution, and each holder thereof immediately prior to the Distribution will be entitled to the following, determined in a manner in accordance with, and subject to, the Corporation shall grant to Executive ALTISOURCE Option Plan, FAS123R and Section 409A of the Code: (i) an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total number of 400,000 shares of AAMC Common Stock equal to the Corporation's common stock at product of (x) the number of shares of ALTISOURCE Common Stock subject to the ALTISOURCE Stock Option held by such holder on the Distribution Date and (y) the distribution ratio of one (1) share of AAMC Common Stock for every ten (10) shares of ALTISOURCE Common Stock (the “AAMC Stock Options”), with an exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement determined in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, a manner consistent with this Section 3.04 and (ii) one option letter agreement the adjustment of the exercise price of such holder’s ALTISOURCE Stock Option, to be determined in a manner consistent with this Section 3.04 (the form annexed as Exhibit "A-2" hereto “Adjusted ALTISOURCE Stock Options”) ("Option Letter A-2") being exercisable for 150,000 shares of Common the AAMC Stock Options and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Adjusted ALTISOURCE Stock (such option letters being referred to collectively herein as Options, together, the "Plan Option Letters"“Post-Distribution Stock Options”). (b) The Company represents option exercise price of the AAMC Stock Options and warrants that there are sufficient shares the Adjusted ALTISOURCE Stock Options shall be set in accordance with Treasury Regulation Section 1.409A-1(b)(5)(v)(D), to maintain the intrinsic value of Common the ALTISOURCE Stock currently available under Options as of the Company's 1993 Distribution Date, and to maintain the ratio of exercise price to fair market value of the ALTISOURCE Stock Option Plan (Options and the "1993 Plan") to cover the shares of Common Post-Distribution Stock issuable to Executive upon exercise of Option Letter A-1Options. (c) In Each of ALTISOURCE and AAMC intends that, subsequent to the event Distribution, AAMC shall establish, or shall cause to be established, one or more equity incentive or similar plans that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available will allow or provide for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directorsrestricted stock, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock new options (including or other equity-based awards) to acquire AAMC Common Stock, or other equity awards on such terms, and subject to such conditions (including, without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) as to eligibility, vesting and provisions regarding forfeiture of stock options under the Plan upon termination of employmentperformance criteria), the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Optionsas AAMC may decide in its sole discretion. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. 100% of the capital stock of Employer is owned of record and beneficially by Hightimes Holding Corp., a Delaware corporation (a“Holdings”). As at the Effective Date, Holdings is authorized to issue an aggregate of 55,000,000 shares of its capital stock, $0.0001 par value per share, of which (i) As additional compensation for his services hereunder50,000,000 shares are designated as common stock, with 40,000,000 shares designated as Class A voting common stock (“Holdings Class A Common Stock”) and 10,000,000 shares designated as Class B non-voting common stock (the “Holdings Class B Common Stock”, and together with the Class A Common Stock, the Corporation shall grant “Holdings Common Stock”), and (ii) 5,000,000 shares designated as preferred stock (the “Holdings Preferred Stock”) which may be issued in one or more series containing such rights, preferences and privileges as the board of directors of the Company may, from time to Executive time, designate. As at the Effective Date of this Agreement, an aggregate of 10,169,746 shares of Holdings Class A Common Stock are issued and outstanding, and no shares of Holdings Class B Common Stock have been issued. Subject to the approval of Holdings’ Board of Directors, the Employee will be granted an option under the Corporation's 1993 Stock Option Plan (the "Plan"“Option”) to acquire a total of 400,000 purchase up to 150,000 shares of Holdings Class B Common Stock (the Corporation's common stock “Option Shares”) at an exercise price of $4.20 per share (the “Exercise Price”). Such Option will be subject to the terms and conditions applicable to options granted under the Holdings Incentive Stock Option Plan and in the applicable stock option agreement, which Employee will be required to sign. The Option and the Option Shares will vest at the rate of one-third (1/3) of the Option Shares as of the end of each Anniversary Period following the Effective Date. Each of Holdings and the Employer agree that the Exercise Price per Option Share is equal to the closing fair market value per share on the Effective Date of this Agreement, being the date on which the Option is deemed to be granted, and is based on the last per share sale price of the Corporation's common stock shares of Class A Common Stock of Holdings, as reported determined by the American Stock Exchange on Board of Directors of Holdings in good faith compliance with applicable guidance in order to avoid having the Option be treated as deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended. In the event Employee’s employment is terminated in accordance with Section 7.2 of this Agreement within eighteen (18) months following the date hereofof this Agreement, one-half (1/2) of the Option Shares will be deemed to have vested. Further, in the event Employee’s employment is terminated in accordance with Section 7.2 of this Agreement on or after the terms date that is eighteen (18) months following the date of such this Agreement, all of the Option Shares will be deemed to have vested. It is expressly acknowledged and agreed that, to the extent permitted by applicable law, the option to be evidenced by granted to Employee hereunder shall be qualified as an “incentive stock option,” as defined under Section 422(b) of the Internal Revenue Code of 1986, as amended. Further, Employer shall (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover include the shares of Common Stock issuable subject to Executive upon exercise of Option Letter A-1. (c) In the event all options granted to Employee in any registration statement on Form S-8 or other applicable registration form that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available it may file for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B such purpose, and (ii) appropriate amendments to the Plan specifically confirming the right have all option grants be exempt under Rule 16b-3 of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) Securities and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock OptionsExchange Commission. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. (a) As additional compensation Each grantee under any of the MII Legacy Equity Plans (i) who is a B&W Legacy Award Holder or will be a B&W Employee, or who will not be a B&W Employee but will serve on the board of directors of B&W and not on the board of directors of MII immediately after the Distribution Date, and (ii) who holds as of the Distribution Date, one or more MII Options, shall receive, as a replacement award in substitution for his services hereundereach such MII Option (which shall be cancelled), the Corporation shall grant to Executive an option to purchase a number of shares of B&W Common Stock under the Corporation's 1993 Stock Option B&W New Equity Plan (a “Replacement B&W Option”) having a value (calculated using the "Plan"Post-Distribution B&W Share Price) to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale value of the MII Common Stock subject to the MII Option (calculated using the Pre-Distribution MII Share Price), as calculated pursuant to the following provisions. The number of shares of B&W Common Stock subject to a Replacement B&W Option shall be equal to the product of (i) the number of shares of MII Common Stock subject to an MII Option as of the Distribution Date and (ii) a fraction, the numerator of which is the Pre-Distribution MII Share Price and the denominator of which is the Post-Distribution B&W Share Price. Each such Replacement B&W Option shall have the same comparative ratio of the exercise price to the Post-Distribution B&W Share Price as the exercise price of each MII Option to the Corporation's common stock Pre-Distribution MII Share Price. B&W shall be responsible for (i) the satisfaction of all tax reporting and withholding requirements in respect of the exercise of Replacement B&W 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 B&W Options shall not be exercisable until the Registration Statement Effectiveness Date. Except as reported by provided in the American Stock Exchange foregoing provisions of this Section 3.4(a), Replacement B&W Options granted under this Section 3.4(a) shall be granted on the date hereof, terms which are in all material respects identical (including with respect to vesting) to the terms of such option the MII Options with respect to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")which they replace. (b) The Company represents Each grantee under any of the MII Legacy Equity Plans (i) who is an MII Legacy Award Holder or will be a ▇▇▇▇▇▇▇▇▇ Employee, or who will not be a ▇▇▇▇▇▇▇▇▇ Employee but will serve on the board of directors of MII and warrants that there are sufficient not on the board of directors of B&W immediately after the Distribution Date, and (ii) who will hold one or more MII Options as of the Distribution Date, shall receive, in substitution for each such MII Option (which shall be cancelled), an option to purchase shares of MII Common Stock currently available under one of the Company's 1993 Stock Option Plan MII Legacy Equity Plans (a “Post-Distribution MII Option”) having a value (calculated using the "1993 Plan"Post-Distribution MII Share Price) equal to cover the value of the shares of MII Common Stock issuable subject to Executive upon the MII Option (calculated using the Pre-Distribution MII Share Price), as calculated pursuant to the following provisions. The number of shares of MII Common Stock subject to a Post-Distribution MII Option shall be equal to the product of (i) the number of shares of MII Common Stock subject to an MII Option as of the Distribution Date and (ii) a fraction, the numerator of which is the Pre-Distribution MII Share Price and the denominator of which is the Post-Distribution MII Share Price. Each such Post-Distribution MII Option shall have the same comparative ratio of the exercise price to the Post-Distribution MII Share Price as the exercise price of each MII Option to the Pre-Distribution MII Share Price. MII (or one or more of the MII Subsidiaries, as designated by MII) shall be responsible for (i) the satisfaction of all tax reporting and withholding requirements in respect of the exercise of Option Letter A-1Post-Distribution MII 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 MII Options shall be granted on terms which are in all material respects identical (including with respect to vesting) to the terms of the MII Options with respect to which they are substituted. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders Each grantee under any of the Corporation to approve both MII Legacy Equity Plans (i) who is a Former B&W Officer, or who will serve on the board of directors of both MII and B&W immediately after the Distribution Date, and (ii) who will hold one or more MII Options as of the Distribution Date shall receive, in substitution for each such MII Option (which shall be cancelled), both a Replacement B&W Option with respect to shares of B&W Common Stock and a Post-Distribution MII Option with respect to shares of MII Common Stock, with such shares of B&W Common Stock and MII Common Stock having an amendment increasing aggregate value (calculated using the Post-Distribution MII Share Price and the Post-Distribution B&W Share Price) equal to the value of the shares of MII Common Stock subject to the MII Option (calculated using the Pre-Distribution MII Share Price), as calculated pursuant to the following provisions. In each case, the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of MII Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments subject to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Post-Distribution MII Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that multiplying the income recognized as a result aggregate fair market value of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal number of shares of MII Common Stock subject to the Tax Difference arising in respect of such exercise multiplied MII Option using the Pre-Distribution MII Share Price by a fraction, the numerator of which is 1 the Post-Distribution MII Share Price and the denominator of which is equal the Post-Distribution MII Share Price plus the Post-Distribution B&W Share Price, and dividing that product by the Post-Distribution MII Share Price, with the resulting number of shares subject to 1 minus the Post-Distribution MII Option being rounded up or down to the nearest whole share. In each case, the number of shares of B&W Common Stock subject to the Replacement B&W Option shall be determined by multiplying the fair market value of the number of shares of MII Common Stock subject to the MII Option using the Pre-Distribution MII Share Price by a fraction, the numerator of which is the Post-Distribution B&W Share Price and the denominator of which is the Post-Distribution MII Share Price plus the Post-Distribution B&W Share Price, and dividing that product by the Post-Distribution B&W Share Price, with the resulting number of shares subject to the Replacement B&W Option being rounded up or down to the nearest whole share. Each of the Replacement B&W Options and the Post-Distribution MII Options shall have the same comparative ratio of the exercise price to the Post-Distribution B&W Share Price and Post-Distribution MII Share Price, respectively, as the exercise price of the MII Option being replaced to the Pre-Distribution MII Share Price. MII (or one or more of the MII Subsidiaries, as designated by MII) shall be responsible for (i) the highest marginal federal income satisfaction of all tax rate (currently 39.6%reporting and withholding requirements in respect of the exercise of Post-Distribution MII Options issued in accordance with this Section 3.4(c) and (ii) remitting the highest marginal state income appropriate tax rate applicable or withholding amounts to Executive, in each case the appropriate taxing authorities. B&W shall be responsible for (i) the satisfaction of all tax reporting and withholding requirements in respect of ordinary incomethe exercise of Replacement B&W Options issued in accordance with this Section 3.4(c) and (ii) remitting the appropriate tax or withholding amounts to the appropriate taxing authorities. Replacement B&W Options shall not be exercisable until the Registration Statement Effectiveness Date. Except as provided in the foregoing provisions of this Section 3.4(c), in effect at the time of such exercise. Such amount Replacement B&W Options and Post-Distribution MII Options shall be paid by the Corporation within ninety granted on such terms which are in all material respects identical (90including with respect to vesting) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or terms of the Plan Option Letters, the Corporation shall have no obligation MII Options with respect to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphwhich they are granted.

Stock Options. Prior to the Distribution, Stream International shall ------------- adjust each Stream International Option by reducing to $4.86 the per share exercise price for such option (aother than options with exercise prices at or above $4.86 per share and options held by Messrs. Cowan, Leahy, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ and certain options held by ▇▇. ▇▇▇▇▇▇▇) As additional compensation for his services hereunderand by providing, with respect to those option holders who will be employed by MMI Holdings, CST Holdings or their Subsidiaries following the Distribution, that the option terminates three months after the option holder ceases to be employed by MMI Holdings or CST Holdings or their Subsidiaries, as the case may be (each such option, as so adjusted prior to the Distribution Date, the Corporation "Adjusted Option"). In connection with the Distribution, each Stream International Option to purchase shares of Class A Common Stock of Stream International shall grant to Executive be supplemented with an option under to purchase an identical number of shares of voting stock of each of CST Holdings and MMI Holdings, and each Stream International Option to purchase shares of Class B Common Stock of Stream International shall be supplemented with an option to purchase such number of shares of voting stock of each of CST Holdings and MMI Holdings as is equal to the Corporation's 1993 number of shares of Class A Common Stock Option Plan into which the shares of Class B Common Stock covered by such option would be convertible at the conversion rate fixed on the date of the Drop-down (collectively, the "PlanAdditional Options") ). The per share exercise price for the Additional Options shall be equal to acquire a total of 400,000 shares of the Corporation's common stock at an product determined by multiplying the exercise price per share equal to of Stream International Common Stock at which such Stream International Option was exercisable by 11.93% in the closing sale price case of the Corporation's common stock as reported Additional Option granted by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement MMI Holdings and 38.48% in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders case of the Corporation to approve both (i) an amendment increasing the number of shares available Additional Option granted by CST Holdings. The per share exercise price for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of each Stream International Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined reduced by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising aggregate exercise price of the Additional Options granted in respect of such exercise multiplied by a fractionoption. The Additional Options shall be subject to the terms of the MMI Holdings and CST Holdings 1997 Class A Replacement Stock Option Plans, 1997 Class A California Replacement Stock Option Plans and 1997 Class B Replacement Stock Option Plans, as applicable. Notwithstanding all the numerator foregoing in this Section 2.7, if the holder of which is 1 an outstanding Stream International Option does not consent in writing to the adjustment of such holder's option in accordance with the foregoing, such holder's option shall not be adjusted and no Additional Options shall be granted to such holder. Upon termination of employment of any employee of MMI Holdings or any MMI Subsidiary who has an Adjusted Option, MMI Holdings shall provide to Stream International and CST the name of such employee and the denominator date the employee ceased employment with MMI Holdings or any MMI Subsidiary and shall indicate whether the termination was for cause. Upon Stream International's request from time to time, MMI shall also provide a complete list of employees of MMI Holdings or any MMI Subsidiary who have Adjusted Options, which is equal list shall show such holder's name, Social Security number and address and shall include such other information as Stream International shall reasonably request. Upon termination of employment of any employee of Stream International or any Stream International Subsidiary who has an Additional Options granted by MMI Holdings, Stream International shall provide to 1 minus (i) MMI Holdings the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time name of such exerciseemployee and the date the employee ceased employment with Stream International or a Stream International Subsidiary and shall indicate whether the termination was for cause. Such amount Upon MMI Holdings' request from time to time, Stream International shall be paid also provide a complete list of employees of Stream International or any Stream International Subsidiary who have Additional Options granted by the Corporation within ninety (90) days after any MMI Holdings, which list shall show such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Lettersholder's name, the Corporation Social Security number and address and shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphinclude such other information as MMI Holdings shall reasonably request.

Stock Options. The Employee shall be eligible to be granted nonqualified options to purchase shares of Corporation’s common stock or other equity compensation generally paid to the employees of the Corporation (a) As additional compensation for his services hereundercollectively, the Corporation shall grant “Equity Awards”), including the follow specific Equity Awards: (1) the Employee will be eligible to Executive an option receive, under the Corporation's 1993 Stock Option Plan (the "Plan") Merger Agreement, two stock option grants to acquire a total of 400,000 purchase shares of the Corporation's ’s common stock at an exercise price per share equal for each option to purchase ICS common stock which had previously been granted to the closing sale price Employee (the “Replacement Option Grants.”) One of the Corporation's common stock as reported by Replacement Option Grants shall be for the American Stock Exchange on same number of shares and shall be vested to the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein same extent as the "Plan Option Letters"). (b) The Company represents ICS option which this option is intended to replace and warrants that there are sufficient shares shall have the same term as set forth in Corporation’s standard form of Common Stock currently available under the Company's 1993 Stock Option Plan stock option agreement (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of “First Replacement Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders Grant”). The second of the Corporation to approve both (i) an amendment increasing Replacement Option Grants shall be for a number of shares which is calculated by multiplying the number of shares available subject to the ICS option for which this option is intended as a replacement by the issuance of options Implied All Stock Exchange Ratio under the Plan to an amount at least sufficient to cover all Merger Agreement, and then subtracting the number of shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments subject to the Plan specifically confirming First Replacement Option Grant, shall vest according to the right vesting schedule and shall have the same term as set forth in the Corporation’s standard form of stock option agreement (the “Second Replacement Option Grant”); and (2) the Employee shall also be eligible to receive an option grant of 100,000 shares that will vest with regard to 33,333 of such option shares on Employee’s second anniversary of employment, 33,333 of such option shares on Employee’s third anniversary of employment and the remaining 33,334 of such option shares on Employee’s fourth anniversary of employment with Corporation, provided Employee continues to remain an employee of the Corporation through such dates. Any Equity Awards shall be granted subject to approval of the board of directors of the Corporation (or the compensation committee thereof). Any Equity Awards shall be granted pursuant and be subject to the terms of the Corporation's Board ’s stock option and/or equity incentive plans and customary form of Directorsagreements, and, except as otherwise described herein, shall vest and become exercisable in accordance with the issuance of vesting and exercisability schedule generally applicable to stock options under the Plan, granted to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Optionssimilarly situated employees. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. Subject to Board approval and adoption of an equity incentive plan (a) As additional compensation for his services hereunderthe “Plan”), the Corporation Employer shall grant to Executive an option under the Corporation's 1993 Stock Option Plan Employee incentive stock options (the "Plan"“Options”) to acquire a total of 400,000 purchase 81,564 shares (which option shares, upon the second closing contemplated in the stock purchase agreement to be entered into on the date hereof by and among Employer and certain other investors, will represent approximately 6% of the Corporation's outstanding equity of Employer on a fully diluted basis) of Employer’s common stock at an exercise price equal to US$9.00 per share (provided that the Board determines that such exercise price per share is equal to the closing sale price fair market value of one share of Employer’s common stock on the effective date of grant), which Options shall be subject to vesting. The Options shall vest and become exercisable over a four (4) year term as follows, provided Employee remains continuously employed by Employer: one forty-eighth (1/48) of the Corporation's Options issued in connection with such grant shall vest on the last day of each calendar month beginning with the calendar month in which such grant occurred until all such Options associated with such grant shall have vested. Unvested Options, or any unvested shares of common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive acquired upon exercise of any options (the “Option Letter A-1. (c) In Shares”), shall be subject to repurchase by Employer at Employee’s cost upon the event that the Company's stockholders fail at the next annual meeting of stockholders termination of the Corporation to approve both (i) an amendment increasing the number Employment for any reason. The mechanics of shares available for the issuance of options under such repurchase shall be provided in the Plan to an amount at least sufficient to cover all and in the shares of Common Stock issuable upon exercise of option agreement (the “Option Letter A-2 Agreement”) entered into by Employer and Option Letter B and (ii) appropriate amendments Employee with respect to the Plan specifically confirming Options. The Options and the right of Option Shares will be subject to the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions conditions of the Plan Stock and the Option Agreement, which Employee will be required to sign as a condition of receiving the Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. (a) The Founders shall use their best -------------- efforts to obtain from each Optionholder the consent of such Optionholder to the transactions contemplated by the form of Option Amendment Agreement, which consent shall be evidenced by the execution and delivery by such Optionholder of a counterpart to an Option Amendment Agreement between ICI and such Optionholder. As additional compensation for his services hereundersoon as practicable following the date of this Agreement, the Corporation Founders shall grant use their best efforts to Executive an option under cause the Corporation's 1993 Board of Directors of ICI (or, if appropriate, any committee administering the 1995 ICI Stock Option Plan (or the "1996 ICI Stock Option Plan") to acquire a total adopt such resolutions or take such other actions (i) as are required (A) to adjust the terms of 400,000 all outstanding options to purchase shares of ICI Common Stock (and any stock appreciation rights linked to the Corporation's common price of shares of ICI Common Stock) heretofore granted to any employee (but not former employee) or director of ICI under the 1995 ICI Stock Option Plan or the 1996 ICI Stock Option Plan, whether vested or unvested, and (B) to adjust the terms of all outstanding options to purchase shares of ICI Common Stock (and any stock at appreciation rights linked to the price of shares of ICI Common Stock) heretofore granted to any former employee of ICI under the 1995 ICI Stock Option Plan or the 1996 ICI Stock Option Plan that are vested as of the date on which the employment of such employee was terminated, in the case of clauses (A) and (B), as necessary to provide that each such option to purchase shares of ICI Common Stock (and any stock appreciation right related thereto) outstanding immediately prior to the effectiveness of the Merger shall not give the holder thereof the right to receive any capital stock of ICI or Holdings after the effective time of the Merger or to receive any consideration other than, for each option (and any stock appreciation right related thereto), an amount in cash equal to (i) the excess, if any, of (x) the consideration paid in the Merger for each outstanding share of ICI Common Stock over (y) the exercise price per share equal of ICI Common Stock subject to such option multiplied by (ii) the number of shares of ICI Common Stock subject to such option and (ii) as are required to make such other changes to the closing sale price of 1995 ICI Stock Option Plan and the Corporation's common stock 1996 ICI Stock Option Plan as reported IHS and the Founders may agree are appropriate to give effect to the transactions contemplated by this Agreement and the American Stock Exchange on the date hereof, with the terms of such option Ancillary Agreements. The Founders shall use their best efforts to be evidenced by cause ICI to (i) one option letter agreement in cause the form annexed as Exhibit "A" hereto ("1995 ICI Stock Option Letter A-1") being exercisable for 100,000 shares Plan and the 1996 ICI Stock Option Plan to terminate upon consummation of Common Stockthe Merger, (ii) one option letter agreement cause all provisions in any other ICI Benefit Plan providing for the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares issuance, transfer or grant of Common Stock any capital stock of ICI, or any interest in respect of any capital stock of ICI, to be deleted upon consummation of the Merger and (iii) one option letter agreement ensure that, upon consummation of the Merger, no holder of options to purchase shares of ICI Common Stock or participant in the form annexed as Exhibit "B" hereto ("1995 ICI Stock Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as Plan, the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 1996 ICI Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the or any other ICI Benefit Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation any right to pay Executive acquire any amount in excess capital stock of $250,000 in the aggregate in respect of its obligations under this subparagraphICI or Holdings.

Stock Options. (a) As additional compensation for his services hereunderOn the Employment Date, the Corporation shall Company will enter into an incentive stock option agreement with Employee providing for the grant to Executive an option of incentive options effective on the Employment Date, under the CorporationCompany's 1993 Stock Option Plan stock option plan (which plan, to be adopted or before the Employment Date by the Company's Board of Directors, and subject to subsequent shareholder approval, will, upon receipt of such shareholder approval, satisfy all conditions of Rule 16b-3 under the Securities Exchange Act of 1934 (the "PlanExchange Act") ), to acquire a total of 400,000 1,200,000 shares of the Corporation's Company common stock at an exercise price per share equal to the closing sale price fair market value of the CorporationCompany's common stock as reported by on the American Stock Exchange Employment Date (anticipated to be $0.375 per share, the fair market value on the date hereof). Such options shall become exercisable, with in whole or in part, in five equal cumulative annual installments commencing on April 30, 1996. Once exercisable, such options shall remain exercisable until expiration. In the terms event of such option termination of employment, all options 6 exercisable on the date of termination shall remain exercisable for a period of three months following termination. The options shall expire ten years from the date of grant. The Company agrees to be evidenced promptly register on Form S-8 under the Act, all shares issuable pursuant to the options granted to Employee under this Section 13(a), but not prior to achieving the Financing Goal. On each May 1 (provided Employee is then employed by (i) one option letter agreement the Company), the exercise date for the 240,000 shares included in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being next annual installment, to become exercisable on the next May 1, shall be accelerated to the extent necessary for 100,000 shares of Common StockEmployee to maintain, (ii) one option letter agreement on a fully diluted basis, a 10% interest in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement Company's common stock. No acceleration will be effected until Employee has obtained a 10% interest in the form annexed Company's common stock, on a fully diluted basis, the determination of which, as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares well as any determination regarding the maintenance of Common Stock (Employee's 10% interest in the Company's common stock, shall be made as if all of Employee's outstanding options, to the extent exercisable, had been exercised. For purposes of the preceding sentence, if Employee has not obtained a 10% interest in the Company's common stock prior to the expiration of three years from the Employment Date then Employee will be deemed to have obtained such option letters being referred to collectively herein as 10% interest in the "Plan Option Letters")Company's common stock at the expiration of three years from the Employment Date. (b) If after all 1,200,000 shares covered by the incentive stock option agreement referred to in Section 13(a) have become exercisable, Employee does not beneficially own (including shares issuable pursuant to then exercisable options) 10% or more of the Company's then outstanding common stock, on a fully diluted basis, then, so long as Employee remains employed by the Company, an additional incentive stock option agreement shall be entered into between the Company and Employee. Under such agreement, Employee, on each May 1 while Employee remains an employee of the Company, shall receive an automatic grant of additional incentive options to acquire up to 240,000 shares of the Company's common stock to the extent necessary for Employee to obtain or maintain, on a fully diluted basis, beneficial ownership (including shares issuable pursuant to then exercisable options) of 10% of the Company's common stock. The exercise price of all options granted under this Section 13(b) shall be equal to the fair market value on the date of automatic grant. The options shall be exercisable, in whole or in part, commencing on the date of automatic grant and shall expire ten years after the date of automatic grant. In the event of termination of employment, all options exercisable on the date of termination shall remain exercisable for a period of three months following termination. The Company represents and warrants agrees to promptly register on Form S-8 under the Act all shares issuable pursuant to the options granted to Employee under this Section 13(b). In the event incentive stock options cannot be granted under applicable law, Employee shall receive nonqualified options under the stock option plan referred to in Section 13(a). To the extent that it shall become apparent that there are sufficient will be insufficient shares of Common Stock currently available under the Companystock option plan to cover the Employee's 1993 Stock Option Plan options anticipated to be granted under this Section 13(b), the Company shall adopt an amendment to the stock option plan providing for an increase in shares issuable thereunder and submit such amendment to its shareholders for approval at the next annual or special shareholders' meeting. 7 In the event the Company shall receive gross cash proceeds of $10 million or more in connection with an underwritten public offering of common stock (the "1993 PlanPublic Offering") to cover ), then no automatic grant shall be effected on the shares May 1 following the closing of Common Stock issuable to Executive upon exercise of Option Letter A-1the Public Offering or at any time thereafter. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders The purchase price of the Corporation shares of common stock issuable upon exercise of the options referred to approve both (iin Sections 13(a) and 13(b) is payable in cash, an amendment increasing equivalent fair market value of common stock, by cashless exercise procedures, or a combination of the foregoing. The purchase price and the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments such options are subject to the Plan specifically confirming the right of the Corporation's Board of Directors, adjustments in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Optionsevent that certain changes in capitalization should occur. (d) In Upon the event that occurrence of a change of control, all outstanding options held by Employee, to the extent not exercisable, shall immediately become exercisable. A change in control shall mean the acquisition through any number of transactions by any individual or entity (any of which is herein referred to as a "Person"), or any two or more Persons acting as a partnership, syndicate, or other group for the purpose of acquiring or holding securities of the Company, and any such Person(s) controlling, controlled by, or under common control with any such person(s), of the beneficial ownership, as determined in accordance with Rule 13d-3 under the Exchange Act, directly or indirectly, in the aggregate at any point in time of 50% or of either (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) then outstanding Company common stock, or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason combined voting power of the Executive's disability or death prior then outstanding Company voting securities entitled to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 vote generally in the aggregate in respect election of its obligations under this subparagraphdirectors.

Stock Options. (a) As additional compensation for his services hereunderEach option or right to purchase shares of Company Common Stock (each a “Company Stock Option”) under the Company’s 2006 Incentive Compensation Plan (the “2006 Plan”), the Corporation shall grant to Executive an option under Company’s 1998 Incentive Compensation Plan (the Corporation's 1993 “1998 Plan”), the Company’s 1995 Non-Employee Directors’ Stock Option Plan (the "“1995 Plan") ”), the Company’s 1988 Non-Qualified Stock Option Plan (the “1988 Plan”), and the Company’s 1986 Stock Option Plan (the “1986 Plan”, together with the 2006 Plan, the 1998 Plan, the 1995 Plan, and the 1988 Plan, the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to acquire a total of 400,000 shares the Effective Time shall, as of the Corporation's common stock Effective Time, become fully vested and each holder of an outstanding option under the Company Stock Plans immediately before the Effective Time shall receive, at the Effective Time, an amount of cash (without interest) for each share of Company Common Stock underlying such option equal to the excess, if any, of (i) the Merger Consideration over (ii) the exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stockoption, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")shall thereafter be cancelled and of no further force and effect. (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1.[INTENTIONALLY OMITTED] (c) In Prior to the event that Effective Time, the Company's stockholders fail at the next annual meeting Board of stockholders Directors of the Corporation Company (or, if appropriate, any committee thereof administering the Company Stock Plans) shall adopt such resolutions as may be required to approve both (i) an amendment increasing effectuate the number provisions of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without causeSections 2.03(a) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options2.03(d). (d) In Following the event that (i) date hereof, participants in the Corporation is required ESPP may not increase their payroll deductions or purchase elections under the ESPP from those in effect on the date of this Agreement. Each participant’s outstanding right to amend purchase shares of Company Common Stock under the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by Company’s ESPP shall terminate on the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death day immediately prior to the expiration day on which the Effective Time occurs, provided that all amounts allocated to each participant’s account under the ESPP as of such date shall thereupon be used to purchase from the Company whole shares of Company Common Stock at the applicable price determined under the terms of the options evidenced by ESPP for the Plan Option Letters and Executive is required after then outstanding offering periods using such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to date as the "Tax Difference" in respect of final purchase date for each such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 offering period and the denominator ESPP shall terminate immediately following such purchases of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphCompany Common Stock.

Stock Options. (a) As additional compensation for his services hereunderAt the Effective Time, the Corporation shall grant each outstanding option to Executive an purchase shares of Company Common Stock (a "Company Stock Option") and each outstanding stock appreciation right (a "Company SAR") issued pursuant to any incentive or stock option under the Corporation's 1993 Stock Option Plan program of Company (the "Company Plan") ), whether vested or unvested, shall be assumed by Merger Partner, provided that the foregoing shall not apply to acquire options or stock appreciation rights assumed by Spinco pursuant to the Distribution Agreement and such options and stock appreciation rights assumed by Spinco shall not constitute Company Stock Options or Company SARs for purposes of this Agreement. Each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, a total number of 400,000 shares of Merger Partner Common Stock equal to (x) the Corporation's common stock number of shares of Company Common Stock covered by such Company Stock Option, multiplied by (y) the Option Adjustment Ratio, at an exercise a price per share equal to (A) the closing sale exercise price of such Company Stock Option immediately prior to the Corporation's common stock as reported Spin-off, multiplied by (B) (1) one divided by (2) the American Stock Exchange on Option Adjustment Ratio; provided, however, that in the date hereof, with the terms case of such any option to be evidenced which Section 421 of the Code applies by (i) one option letter agreement in reason of its qualification under Section 422 of the form annexed as Exhibit "A" hereto Code ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Lettersincentive stock options"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under , the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing option price, the number of shares available 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. For purposes of the foregoing, the "Option Adjustment Ratio" shall mean the amount obtained by dividing (i) the average of the daily high and low trading prices on the New York Stock Exchange for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Company Common Stock issuable upon exercise on each of Option Letter A-2 and Option Letter B and the 20 trading days prior to the ex-dividend date for the Spin-off by (ii) appropriate amendments the average of the daily high and low trading prices on the New York Stock Exchange for the Merger Partner Common Stock on each of the same 20 trading days. Each holder of a Company SAR shall be entitled to that number of stock appreciation rights of Merger Partner ("Merger Partner SARs"), determined in the Plan specifically confirming same manner as set forth above with respect to Company Stock Options assumed by Merger Partner. At the Effective Time, the agreements evidencing the grants of Company Stock Options and Company SARs assumed by Merger Partner shall be amended to provide that the right of a holder to exercise Company Stock Options and Company SARs shall continue beyond the Corporationtermination of such holder's Board of Directorsemployment, if such holder's employment is terminated without Cause or such holder leaves employment for Good Reason (as such terms are defined in the issuance Company's change of stock options under control policy as in effect immediately prior to the PlanEffective Time or, to determine provisions regarding terms if applicable, such holder's employment agreement or change of control severance agreement), until the later of (x) the second anniversary of the exercise of Effective Time, (y) 90 days after such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon holder's termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason end of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any period for exercise of options evidenced by such Company Stock Options or Company SARs as provided in any employment or severance agreement between the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on Company and such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphholder.

Stock Options. (a) As additional compensation for his services hereunderAt the Effective Time, each option granted by the Company (a "Company Option") to purchase shares of Company Common Stock which is outstanding and unexercised immediately prior thereto shall be converted automatically into an option to purchase shares of Buyer Common Stock in an amount and at an exercise price determined as provided below (and otherwise subject to the terms of the Company's Director's Stock Option Plan, the Corporation shall grant to Executive an option under 1986 Stock Option Plan and the Corporation's 1993 Employee Stock Option Plan (collectively, the "PlanCompany Option Plans")): (1) to acquire a total The number of 400,000 shares of Buyer Common Stock to be subject to the Corporation's common stock at an new option shall be equal to the product of the number of shares of Company Common Stock subject to the original option and the Exchange Ratio, provided that any fractional share of Buyer Common Stock resulting from such multiplication shall be rounded down to the nearest share; and (2) The exercise price per share of Buyer Common Stock under the new option shall be equal to the closing sale exercise price per share of Company Common Stock under the original option divided by the Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. The adjustment provided herein with respect to any options which are "incentive stock options" (as defined in Section 422 of the Corporation's common stock Internal Revenue Code of 1986, as reported by amended (the American Stock Exchange on "Code")) shall be and is intended to be effected in a manner which is consistent with Section 424(a) of the date hereof, with the Code. The duration and other terms of such the new option shall be the same as the original option, except that all references to the Company shall be deemed to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred references to collectively herein as the "Plan Option Letters")Buyer. (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under Prior to the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing Effective Time, Buyer shall reserve for issuance, the number of shares available for of Buyer Common Stock necessary to satisfy Buyer's obligations under this Section 1.5. Within thirty days after the issuance of options Effective Time, Buyer shall file with the Securities and Exchange Commission (the "SEC") a registration statement on an appropriate form under the Plan Securities Act of 1933, as amended (the "Securities Act"), with respect to an amount at least sufficient to cover all the shares of Buyer Common Stock issuable upon exercise of Option Letter A-2 subject to options to acquire Buyer Common Stock issued pursuant to Section 1.5(a) hereof, and Option Letter B and (ii) appropriate amendments shall use its reasonable best efforts to maintain the Plan specifically confirming the right current status of the Corporation's Board of Directorsprospectus contained therein, in the issuance of stock as well as comply with applicable state securities or "blue sky" laws, for so long as such options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Optionsremain outstanding. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. At the first regularly scheduled meeting of the Board of Directors of the Employer following the Financing the Employer shall grant Employee stock options under the RXi Pharmaceuticals 2007 Incentive Plan (the “Plan”) to purchase a number of shares of Employer’s common stock equal to one and a half percent (1.5%) of the sum of the number of outstanding shares of common stock of Employer immediately prior to the closing of the first tranche of the Financing plus the number of shares subject to options outstanding or contractually committed to be granted as of the date of the grant of such option to Employee (the “Option”). The Options shall vest in quarterly installments over 4 years beginning on the first quartlery anniversary of the Effective Date of the Agreement provided, in each case, that Employee remains in the continuous employ of Employer through such quarterly anniversary date. Each vested Option shall (a) As additional compensation for his services hereunder, the Corporation shall grant to Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 shares of the Corporation's common stock be exercisable at an exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail fair market value at the next annual meeting time of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's granting as determined by Employer’s Board of Directors, in the issuance (b) have a term of stock options under the Planten years and be exercisable by Employee at any time during such ten year period, to determine provisions regarding terms of the exercise of such stock options and (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without causec) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized be on such exercise been treated other terms as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that Employer’s Board of Directors (or the income recognized as a result Compensation Committee of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%Board) and (ii) set forth in a customary form of stock option agreement under the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at Plan evidencing the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exerciseOptions. Notwithstanding anything to the contrary in this Section 6.2 or other provisions of the Agreement or of the Plan Option Lettersstock option agreement evidencing the Options, upon the occurrence of a “Covered Transaction” (as defined in the Plan), the Corporation Options shall have no obligation thereupon vest in full and become exercisable as to pay Executive any amount all of the shares covered thereby in excess accordance with the terms of $250,000 the Plan. Furthermore, in the aggregate event that the Employee is terminated without Cause (as defined below in respect Section 6.1) or Employee is terminated as a result of its obligations under this subparagraphan Involuntary Termination (as defined in Section 6.1B), the shares that would have vested during the Severance Period (as defined below in Section 6.2.1 and 6.2.2 respectively) shall vest and become exercisable as of the date of such termination. For avoidance of doubt, the full amount of options that would have vested during the Severance Period shall vest and shall not be reduced in the event that the length of the Severance Period is reduced for any reason.

Stock Options. (a) As additional compensation for his services hereunderUpon consummation of the Merger, (i) every outstanding stock option granted by ARS (the Corporation shall grant to Executive an option "ARS Stock Options") under the Corporation's 1993 Stock Option its 1996 Incentive Plan or under its 1997 Employee Incentive Plan (the "PlanARS Option Plans") to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to ExecutiveMarch 6, in each case in respect 1996 warrant of ordinary incomeARS held by Equus II Incorporated, in effect if such warrant is outstanding at the time Effective Time (the "ARS Warrant") shall automatically convert so that: (i) common stock, par value $0.01 per share, of such exercise. Such amount ServiceMaster (the "ServiceMaster Common Stock") shall be paid substituted for ARS Common Stock as the security purchasable under the option or warrant; (ii) the number of shares of ServiceMaster Common Stock subject to the option or warrant immediately after the Merger shall be equal to the product derived by multiplying the number of shares of ARS Common Stock that shall have been subject to the option or warrant immediately prior to the Merger by the Corporation within ninety Option Exchange Ratio (90as hereinafter defined); and (iii) days the exercise price per share at which ServiceMaster Common Stock shall be purchasable immediately after any such exercise. Notwithstanding anything the Merger shall be equal to quotient derived by dividing the exercise price per share at which ARS Common Stock shall have been purchasable prior to the contrary Merger by the Option Exchange Ratio. "Option Exchange Ratio" means a fraction equal to (i) the Offer Price divided by (ii) the average of the closing prices of ServiceMaster Common Stock on the New York Stock Exchange (the "NYSE") Composite Transaction Tape (as reported in this Agreement The Wall Street Journal or, if not reported thereby, any other authoritative source reasonably designated by the Chief Financial Officer of ServiceMaster), on the 20 consecutive Trading Days (as hereinafter defined) ending on the Trading Day on which the Offer is consummated (or the Plan Option Lettersif such day is not a Trading Day, the Corporation shall have no obligation to pay Executive Trading Day first preceding such consummation day). "Trading Day" means any amount in excess of $250,000 in day on which the aggregate in respect of its obligations under this subparagraphNYSE is open for trading.

Stock Options. Incentive stock options (athe "Options") As additional compensation for his services hereunderto purchase up to 70,000 shares of common stock, $0.01 par value (the Corporation shall grant to Executive an option "Shares"), of Health Power under the Corporation's 1993 proposed Health Power, Inc. 2000 Management Stock Option Plan (the "Management Plan") to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal ). The Company covenants to the closing sale price of the Corporation's common stock Employee as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by follows: (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable Company will take all actions necessary to present the Management Plan to the directors of Health Power for 100,000 shares their approval at their March 2000 quarterly Board of Common Stock, Directors meeting; (ii) one option letter agreement in if the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable Management Plan is approved of by the directors, the Company will take all actions necessary to reserve a sufficient number of Shares for 150,000 shares issuance upon the exercise of Common Stock the Options; and (iii) one option letter agreement in if the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable Management Plan is approved of by the directors, the Company will thereafter take all actions necessary to present the Management Plan to the stockholders of Health Power for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Companytheir approval at Health Power's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next 2000 annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 stockholders. The Employee acknowledges and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event understands that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount grant of Income Taxes Executive would have been required the Options to pay had the income recognized on such exercise been treated as a long term capital gain Employee is subject to the condition that the Management Plan be approved by the directors of Health Power, and (B) the amount grant of Income Taxes payable the Options to the Employee is further subject to the condition that the Management Plan be approved by Executive in respect the stockholders of Health Power at such exercise (the amount of annual meeting, and that if such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Differenceapproval is not received from stockholders, the amount grant of taxes payable by Executive the Options shall be determined automatically null and void and without further force or effect If the Management Plan is approved by assuming that Health Power's directors and stockholders, then the income recognized as a result of such Options shall be at an exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount price equal to the Tax Difference arising closing market price of the Shares on the last business day immediately preceding the date of the 2000 annual meeting. No Options shall vest until December 31, 2000. On December 31, 2000, and on each December 31 thereafter until December 31, 2004, 14,000 Options shall become fully vested in respect the name of such exercise multiplied by a fractionthe Employee. Upon receipt of stockholder approval of the Management Plan, the numerator Employee and Health Power shall enter into a stock option agreement (the "Stock Option Agreement") reflecting the grant of which is 1 the Options on the foregoing terms. The grant of the Options and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount exercise thereof shall be paid by subject to all of the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to terms and conditions of the contrary in this Agreement or Management Plan and the Plan Stock Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphAgreement.

Stock Options. (a) As additional compensation for his services hereunderAt the Effective Time, the Corporation shall grant all options to Executive an option purchase shares of TeleCorp Common Stock then outstanding under the Corporation's 1993 TeleCorp 1999 Stock Option Plan (the "TeleCorp 1999 Plan") ), by virtue of the First Merger and without any action on ------------------- the part of the holder thereof, shall no longer be options to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of TeleCorp Common Stock and (iii) one option letter agreement shall become options to acquire Class A Voting Stock with such terms as provided in Section 1.8(b). At the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 Effective Time, all options to -------------- purchase shares of Tritel Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available then outstanding under the Company's 1993 Tritel Non- Employee Directors Stock Option Plan (the "1993 Tritel Directors Plan") and the --------------------- Tritel 1999 Stock Option Plan (the "Tritel 1999 Plan," and with the TeleCorp ---------------- Option Plans and Tritel Directors Plan, the "Option Plans"), by virtue of the ------------ Second Merger and without any action on the part of the holder thereof, shall no longer be options to cover acquire Tritel Common Stock and shall become options to acquire Class A Voting Stock with such terms as provided in Section 1.8(b). -------------- Outstanding options under the Option Plans are referred to herein as "Outstanding Employee Options." ---------------------------- (b) Each such Outstanding Employee Option shall continue to have, and be subject to, the same terms and conditions set forth in the relevant Option Plan, option agreements thereunder and other relevant documentation immediately prior to the Effective Time, except that such Outstanding Employee Options will be exercisable solely for that number of whole shares of Class A Voting Stock equal to the product of the number of shares of TeleCorp or Tritel Common Stock, as the case may be, that were purchasable under such Outstanding Employee Option immediately prior to the Effective Time multiplied by the applicable Exchange Ratio, rounded down to the nearest whole number of shares of the Holding Company Common Stock and the per-share exercise price for the shares of Common Class A Voting Stock issuable to Executive upon exercise of Option Letter A-1such assumed Outstanding Employee Options will be equal to the quotient determined by dividing the exercise price per-share of TeleCorp or Tritel Common Stock, as the case may be, at which such Outstanding Employee Options were exercisable immediately prior to the Effective Time by the relevant Exchange Ratio, and rounding the resulting exercise price up to the nearest whole cent. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the The Holding Company shall reserve for issuance a sufficient number of shares available of Class A Voting Stock for delivery upon exercise of Outstanding Employee Options. As soon as practicable after the issuance of options Effective Time, the Holding Company shall file a registration statement on Form S-8 under the Plan to an amount at least sufficient to cover all Securities Act covering the shares of Common Class A Voting Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of the Outstanding Employee Options assumed by the Holding Company, and shall use its reasonable efforts to cause such stock options (including without limitation, registration statement to become effective as soon thereafter as practicable and to maintain such registration in effect until the period exercise or expiration of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock such assumed Outstanding Employee Options. (d) In the event that (i) the Corporation is TeleCorp and Tritel shall take all such steps as may be required to amend cause consummation of the Plan Option Letters pursuant to Paragraph 5(ctransactions contemplated by Section 1.8(a) and (b) -------------- --- and any other disposition of TeleCorp or Tritel equity securities (iiincluding derivative securities) Executive's employment in connection with this Agreement by the Corporation is terminated each individual who (x) by the Corporation for any reason other than for Cause, is a director or officer of TeleCorp or Tritel or (y) by Executive at the Effective Time will be a director or officer of the Holding Company, to be exempt under Rule 16b-3 promulgated under the Exchange Act (as a result of an Employer Breach or (z) defined below), such steps to be taken in accordance with the No-Action Letter dated January 12, 1999, issued by the Corporation by reason SEC (as defined below) to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP. (e) At the Effective Time, the Holding Company shall assume all of the Executive's disability or death prior to obligations of TeleCorp under the expiration of TeleCorp 1998 Restricted Stock Plan (the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income TaxesTeleCorp Restricted Stock Plan") on any income recognized by Executive arising upon any exercise and of options evidenced by Tritel under the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive Tritel Restricted ------------------------------ Stock Agreements specified in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise)Schedule 1.8. In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.------------

Stock Options. (a) As additional compensation for his services hereunderPursuant to the Employment Agreement, the Corporation shall grant to Executive an option was granted under the Corporation's 1993 1989 Monro Muffler Brake Employees' Incentive Stock Option Plan (the "1989 Stock Option Plan") incentive stock options (the "ISOs"), within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), to acquire a total of 400,000 purchase 225,000 shares of the CorporationCompany's common stock. The ISOs have an exercise price equal to the fair market value of the Company's common stock at an exercise price per share equal to on the closing sale price date of grant and have a 10 year term. The portion of the CorporationISOs to purchase 162,348 shares of the Company's common stock as reported by the American Stock Exchange on the date hereof, with has vested pursuant to the terms of the Employment Agreement. The portion of the ISOs to purchase 49,848 shares of the Company's common stock shall vest and become exercisable on December 1, 2002, and the portion of the ISOs to purchase the remaining 12,804 shares of the Company's common stock shall vest and become exercisable on January 1, 2003, provided that on each such option date the Executive continues to be evidenced employed by the Company. The parties expressly acknowledge that the terms of this paragraph (i) one option letter agreement in a), including without limitation the form annexed vesting schedule of the ISOs, have not been modified as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")Restatement Date. (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available Pursuant to the Employment Agreement, the Executive was granted under the Company's 1993 Monro Muffler Brake, Inc. 1998 Stock Option Plan (the "1993 1998 Stock Option Plan," together with the 1989 Stock Option Plan, the "Plans") non-qualified stock options (the "Prior NSOs") to cover the purchase 200,000 shares of Common Stock issuable the Company's common stock. The Prior NSOs have an exercise price equal to Executive upon exercise the fair market value of Option Letter A-1the Company's common stock on the date of grant and shall have a 10 year term. The Prior NSOs have vested pursuant to the terms of the Employment Agreement. (c) In As of the event that Restatement Date, the Executive shall be granted under the 1998 Stock Option Plan non-qualified stock options (the "New NSOs," together with the Prior NSOs, the "NSOs") to purchase 80,000 shares of the Company's stockholders fail at common stock. The New NSOs shall have an exercise price equal to the next annual meeting of stockholders fair market value of the Corporation to approve both (i) an amendment increasing Company's common stock on the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 Restatement Date and Option Letter B shall have a 10 year term. The New NSOs shall be fully vested and (ii) appropriate amendments to the Plan specifically confirming the right exercisable as of the Corporation's Board date of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Optionsgrant. (d) In Notwithstanding the event that (i) foregoing, the Corporation is required ISOs and NSOs granted pursuant to amend this Agreement shall, in all respects, be subject to the terms of, and are intended to conform in all respects with, the applicable Plan under which they are granted. Inconsistencies between this Agreement and the Plan Option Letters pursuant shall be resolved according to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason terms of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphPlan.

Stock Options. (a) As additional compensation for his services hereundersoon as practicable after the date of this Agreement, the Corporation Board shall approve the grant to the Executive an of a stock option under the Corporation's 1993 Stock Option Plan (the "Plan"“Option”) to acquire a total of 400,000 purchase 2,154,276 shares (the “Option Shares”) of the Corporation's Company’s common stock (“Common Stock”), representing three and one-half percent (3.5%) of the capital stock of the Company determined on a fully-diluted basis (including all then outstanding options and warrants), such Option to be exercisable at an a per share exercise price per share equal to the closing sale price fair market value per share of the Corporation's common stock Common Stock on the grant date of the Option, as reported determined by the American Board, all of the foregoing as more particularly provided in the agreement with respect to the Option to be entered into between the Company and the Executive in form and substance acceptable to the Board. The number of Option Shares shall be subject to increase from time to time in the event that the Company issues any additional shares of its Series B Preferred Stock Exchange (the “Series B Preferred”) at any time during the six (6) month period following the Effective Date, such that, after giving effect to any such additional issuance of Series B Preferred, the number of Option Shares continues to represent three and one-half percent (3.5%) of the capital stock of the Company determined on a fully-diluted basis (including all then outstanding options and warrants), such adjustment to be more particularly provided in the above referenced option agreement. Subject to the provisions set forth in paragraph (c) below that provide for the acceleration of the vesting of the Option, the Option shall vest twenty-five percent (25%) on the date hereof, anniversary of the Effective Date and monthly thereafter until the Option has become fully vested and exercisable with respect to all of the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")Shares. (b) The Executive shall be entitled to earn additional grants of stock options based on the following milestones, if any, achieved by the Company, as follows: (i) If the Company represents executes a strategic partnership agreement (the “Milestone 1 Partnership Agreement”), on such terms and warrants conditions as are approved by the Board, within eighteen (18) months following the Effective Date, a stock option (the “Milestone 1 Option”) to purchase that there are sufficient number of shares of Common Stock currently available under (the “Milestone 1 Option Shares”) equal to one percent (1%) of the capital stock of the Company determined on a fully-diluted basis (including all then outstanding options and warrants), which shall be measured on the date of the execution of such Board-approved Milestone 1 Partnership Agreement, all of the foregoing as more particularly provided in the agreement with respect to the Milestone 1 Option, to be entered into between the Company and the Executive in form and substance acceptable to the Board. The Milestone 1 Option will be exercisable at a per share exercise price equal to the fair market value per share of the Common Stock on the grant date of the Milestone 1 Option, as determined by the Board, the foregoing to be more particularly provided in the above referenced option agreement. Subject to the provisions set forth in paragraph (c) below that provide for the acceleration of the vesting of the Milestone 1 Option, the Milestone 1 Option shall vest twenty-five percent (25%) on the anniversary of the date of grant and monthly thereafter until the Milestone 1 Option has become fully vested and exercisable with respect to all of the Milestone 1 Option Shares; and (ii) If the Company (A) assuming the Company has executed the Milestone 1 Partnership Agreement, executes a second, separate strategic partnership agreement (the “Milestone 2 Partnership Agreement”), on such terms and conditions as are approved by the Board, or (B) following the completion in full of the Company's 1993 Stock Option Plan ’s Series B Preferred financing (the "1993 Plan"“Series B Preferred Financing”), consummates an equity financing with minimum gross proceeds of at least $50 million to the Company (a “Qualified Equity Financing”) with a valuation equal to at least two times (2x) the post-money valuation of the Company after giving effect to the consummation of the Series B Preferred Financing, which Milestone 2 Partnership Agreement is executed or Qualified Equity Financing occurs within two (2) years following the Effective Date, a stock option (the “Milestone 2 Option”) to cover the purchase that number of shares of Common Stock issuable (the “Milestone 2 Option Shares”) equal to one percent (1%) of the capital stock of the Company determined on a fully-diluted basis (including all outstanding options and warrants), which shall be measured on the date of the execution of such Board-approved Milestone 2 Partnership Agreement or the consummation of such Qualified Equity Financing, as applicable, all of the foregoing as more particularly provided in the agreement with respect to the Milestone 2 Option to be entered into between the Company and the Executive upon in form and substance acceptable to the Board. The Milestone 2 Option will be exercisable at a per share exercise price equal to the fair market value per share of the Common Stock on the grant date of the Milestone 2 Option, as determined by the Board, the foregoing to be more particularly provided in the above referenced option agreement. Subject to the provisions set forth in paragraph (c) below that provide for the acceleration of the vesting of the Milestone 2 Option, the Milestone 2 Option Letter A-1shall vest twenty-five percent (25%) on the anniversary of the date of grant and monthly thereafter until the Milestone 2 Option has become fully vested and exercisable with respect to all of the Milestone 2 Option Shares. (c) In the event that of a Change in Control (as defined in the Company's stockholders fail at ’s 2012 Equity Incentive Plan, as may be amended or modified from time to time (the next annual meeting “Plan”)), so long as the Executive agrees to remain employed by the Company (or any of stockholders its affiliates or the successor in such Change in Control) for a period of six (6) months following the consummation of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right Change in Control, then each of the Corporation's Board of DirectorsOption, in the issuance of stock options under Milestone 1 Option, and the PlanMilestone 2 Option, to determine provisions regarding terms if any, that shall then be issued and outstanding and not fully vested and exercisable for all of the exercise of such stock options (including without limitationrespective Option Shares, the period of exercisability of stock options under Milestone 1 Options Shares or the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employmentMilestone 2 Option Shares, the Company agreesas applicable, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death immediately prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect consummation of such exercise (Change in Control, shall automatically accelerate and become vested and exercisable, effective simultaneously with the amount consummation of such difference being referred to as the "Tax Difference" Change in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphControl.

Stock Options. (ai) As additional compensation for his services hereunderSubject to approval by the Board on or before the Grant Date, the Corporation Executive shall grant be granted a stock option (the “First Option”) to Executive purchase an aggregate of One Million Five Hundred Thousand (1,500,000) shares of Common Stock, all of which shall be granted as an incentive stock option to the extent permissible under the Corporation's 1993 Stock Code, and the remainder of which shall be granted as a nonstatutory stock option. The First Option shall be granted under the Plan pursuant to the Company’s standard form of stock option agreement. The First Option shall vest (i) in equal 1/3 increments annually until fully vested and/or (ii) in full and become immediately exercisable upon a Change of Control of the "Plan") to acquire a total Company (as such term is defined in the applicable stock option agreement). Except as expressly set forth herein, the terms and conditions governing the First Option and the grant, exercise and ownership of 400,000 the First Option and the shares of Common Stock for which such First Option is exercisable shall be governed by the Corporation's common Plan and the applicable stock at option agreement. The Executive shall be required to execute such stock option agreement as a condition precedent to the receipt of the First Option and the First Option shall have an exercise price per share of Common Stock equal to the closing sale trading price of the Corporation's common stock as reported Common Stock on the Grant Date. (ii) Upon the one year anniversary of this Agreement, and subject to (a) the approval by the American Board on or before the Second Grant Date (as hereinafter defined) and (b) the prior affirmative vote of the requisite number of stockholders of the Company to increase the total number of shares of Common Stock Exchange on eligible for issuance under the Plan as of the date hereofof this Agreement by Three Million Five Hundred Thousand (3,500,000) shares, with the terms Executive shall be granted a stock option (the “Second Option”) to purchase an aggregate of such option to be evidenced by One Million Five Hundred Thousand (i1,500,000) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, all of which shall be granted as an incentive stock option to the extent permissible under the Code, and the remainder of which shall be granted as a nonstatutory stock option. The Second Option shall be granted under the Plan pursuant to the Company’s standard form of stock option agreement. The Second Option shall vest (i) 1/3 upon the one year anniversary of the Second Grant Date and quarterly thereafter in equal increments over one year until fully vested and/or (ii) one option letter agreement in full and become immediately exercisable upon a Change of Control of the Company (as such term is defined in the form annexed applicable stock option agreement). Except as Exhibit "A-2" hereto ("expressly set forth herein, the terms and conditions governing the Second Option Letter A-2") being exercisable for 150,000 shares and the grant, exercise and ownership of Common Stock the Second Option and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable for which such Second Option is exercisable shall be governed by the Plan and the applicable stock option agreement. The Executive shall be required to Executive upon exercise of Option Letter A-1. (c) In execute such stock option agreement as a condition precedent to the event that the Company's stockholders fail at the next annual meeting of stockholders receipt of the Corporation to approve both (i) Second Option and the Second Option shall have an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares exercise price per share of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect closing trading price of such exercise multiplied by a fraction, the numerator Common Stock on the one year anniversary of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or (the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph“Second Grant Date”).

Stock Options. (a) As additional compensation Executive shall be permitted to participate in any stock option and similar plans as adopted by the Company from time to time for his services hereunderthe grant of stock options and other equity incentives to the Company’s employees. On the Effective Date and on each anniversary thereafter during the term of this Agreement (subject to Executive’s continuous employment with the Company through each such anniversary), the Corporation Company shall grant Executive a stock option, which will be, to Executive an option the extent possible under the Corporation's 1993 $100,000 rule of Section 422(d) of the Internal Revenue Code of 1986, as amended (the “Code”), an “incentive stock option” (as defined in Section 422 of the Code), under the Company’s 2003 Stock Option Plan (the "“Plan"”) to acquire a total of 400,000 purchase 250,000 shares of the Corporation's Company’s common stock at an (as adjusted for stock splits and stock combinations that may occur after the date of this Agreement), which each such option shall have a per share exercise price per share equal to the closing sale price fair market value of the Corporation's Company’s common stock as reported by the American Stock Exchange on the applicable date hereofof grant (each an “Annual Option” and collectively, with the terms “Annual Options”). Subject to the accelerated vesting provisions set forth herein, each Annual Option will vest as to 1/12th of the shares subject to such option each month following its date of grant, so that each Annual Option will be fully vested and exercisable one year from its grant date, subject to be evidenced by (i) one option letter agreement Executive’s continuous service to the Company through each relevant vesting date. Notwithstanding the above, in the form annexed event of a Change in Control (as Exhibit "A" hereto ("Option Letter A-1"defined in Section 8.1 below) being exercisable for 100,000 shares of Common Stockthe Company prior to the granting of all Annual Options, (ii) one option letter agreement then the securities underlying all of the then remaining yet unvested Annual Options shall be accelerated with respect to their vesting and shall be granted in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred their entirety to collectively herein as the "Plan Option Letters")Executive. (b) The On the Effective Date, the Company represents and warrants that there are sufficient shall grant Executive a stock option, which will be, to the extent possible under the $100,000 rule of Section 422(d) of the Code, an “incentive stock option” (as defined in Section 422 of the Code), under the Plan to purchase 1,000,000 shares of Common Stock currently available under the Company's 1993 Stock Option Plan ’s common stock, which such option shall have a per share exercise price equal to the fair market value of the Company’s common stock on the Effective Date (the "1993 Plan"“Performance Option” and together with the Annual Options, the “Options”). The Performance Option shall vest upon the Company’s achievement of the following performance milestones, subject to Executive’s continuous employment with the Company through the date any such performance milestone is achieved: • 50,000 shares subject to the Performance Option will vest upon European approval of Orathecin; • 50,000 shares subject to the Performance Option will vest upon European approval of Decitabine; • 200,000 shares subject to the Performance Option will vest upon the securing of a significant corporate partner for one or more of the Company’s drugs or $25,000,000 in additional financing; • 200,000 shares subject to the Performance Option will vest upon the Company achieving annual gross sales of $30,000,000 or more; • 50,000 shares subject to the Performance Option will vest upon the acquisition from a third party of at least one Phase II or more advanced stage compound; • 100,000 shares subject to the Performance Option will vest upon completion of Phase III of a compound acquired during Executive’s tenure as the Company’s Chief Executive Officer during the term of this Agreement; • 100,000 shares subject to the Performance Option will vest upon FDA approval of a compound acquired by the Company during the term of this Agreement; and • 250,000 shares subject to the Performance Option will vest upon achievement of additional milestone(s) to cover be agreed upon with the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1Board. (c) In the event that the Company's stockholders fail at the next annual meeting Each Option shall have a term of stockholders ten (10) years from its date of the Corporation grant, subject to approve both (i) an amendment increasing the number earlier termination in connection with Executive’s termination of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments service to the Plan specifically confirming the right of the Corporation's Board of Directors, Company as provided in the issuance of stock options under Option Agreements. The Options will be subject to the Planterms, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms definitions and provisions of the Plan Stock Options. (d) In and the event that (i) stock option agreements to be executed by and between Executive and the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise Company (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise“Option Agreements”). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator all of which is 1 documents will have terms substantially identical to that of Executive’s predecessor as Chief Executive Officer and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid are incorporated herein by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphreference.

Stock Options. (a) As additional compensation for his services hereunderAt the Effective Time, automatically and without any action on the Corporation shall grant to Executive an option under part of either Surviving Corporation, Newco or any holder of outstanding employee or director stock options of Dynegy outstanding at the Corporation's 1993 Stock Option Plan Effective Time (the "PlanDYNEGY STOCK OPTIONS") ), Newco will assume each Dynegy Stock Option and it will become an option to acquire a total purchase that number of 400,000 shares of Newco Common Stock obtained by multiplying the Corporation's common stock number of shares of Dynegy Common Stock issuable upon the exercise of such option by the Exchange Ratio at an exercise price per share equal to the closing sale per share exercise price of the Corporation's common stock as reported such Dynegy Stock Option divided by the American Exchange Ratio and otherwise upon the same terms and conditions as such outstanding options to purchase Dynegy Common Stock; provided, however, in the case of any Dynegy Stock Exchange on Option to which Section 421 of the date hereofCode applies because of the qualifications under Section 422 or 423 of the Code, with the exercise price, the number of shares of Newco Common Stock purchasable pursuant to such Dynegy Stock Option and the terms and conditions of exercise of such option to be evidenced by (iDynegy Stock Option will comply with Section 424(a) one option letter agreement in of the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")Code. (b) The Company represents At the Effective Time, automatically and warrants that there are sufficient shares without any action on the part of Common Stock currently available under either Surviving Corporation, Newco or any holder of employee or director stock options of Illinova outstanding at the Company's 1993 Stock Option Plan Effective Time (the "1993 PlanILLINOVA STOCK OPTIONS" and, together with the Dynegy Stock Options, the ") PREDECESSOR COMPANY STOCK OPTIONS"), Newco will assume each Illinova Stock Option and it will become an option to cover the shares purchase one share of Newco Common Stock for each share of Illinova Common Stock issuable to Executive upon the exercise of such Illinova Stock Option Letter A-1and otherwise upon the same terms and conditions as such outstanding options to purchase Illinova Common Stock; provided, however, in the case of any option to which Section 421 of the Code applies because of the qualifications under Section 422 or 423 of the Code, the exercise price, the number of shares purchasable pursuant to such Illinova Stock Option and the terms and conditions of exercise of such Illinova Stock Option will comply with Section 424(a) of the Code. (c) In At the event Effective Time, the Dynegy Stock Options and Illinova Stock Options will vest and become immediately exercisable to the extent set forth in Schedule 4.6(c). At the Effective Time, each outstanding award (including restricted stock, phantom stock, stock equivalents and stock units) ("AWARDS") under any employee incentive or benefit plans, programs or arrangements and non-employee director plans currently maintained by Dynegy or Illinova which provide for grants of equity-based awards shall be amended or converted into a similar instrument of Newco, in each case with such adjustments to the terms of such Awards, such that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments Awards become non-forfeitable to the Plan specifically confirming the right extent as determined by Illinova's Board of the CorporationDirectors or Dynegy's Board of Directors, as the case may be, as of the Effective Time, and otherwise as are appropriate to preserve the value inherent in such Awards with no material detrimental effects on the issuance of stock options under the Plan, to determine provisions regarding holders thereof. The other terms of each Award, and the exercise of such stock options (including without limitationplans or agreements under which they were issued, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, will continue to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Optionsapply in accordance with their terms. (d) In Newco will take all corporate actions necessary to reserve for issuance a sufficient number of shares of Newco Common Stock for delivery upon exercise of Predecessor Company Stock Options assumed by Newco pursuant to Section 4.6(a) and Section 4.6(b). (e) As promptly as practicable after the event that Effective Time, Newco will file a Registration Statement on Form S-8 (ior any successor or other appropriate forms) with respect to the Corporation is shares of Newco Common Stock subject to Predecessor Company Stock Options and will use all 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 such options remain outstanding. (f) As of the Effective Time, Newco will assume each Dynegy and Illinova stock option plan providing for the issuance or grant of options with such amendments thereto as may be required to amend reflect the Plan Option Letters pursuant to Paragraph 5(c) Mergers, including the substitution of Newco Common Stock for Dynegy Common Stock and Illinova Common Stock, as applicable, thereunder; provided that after the Effective Time, no more options or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall awards will be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after issued under any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphplans.

Stock Options. As of the Effective Time, (a1) As additional compensation for his services hereunder, each outstanding option to purchase Infinop Shares listed on Section 4(b) of the Corporation shall grant to Executive an option under the Corporation's 1993 Stock Option Plan DISCLOSURE SCHEDULE (the AN "PlanINFINOP STOCK OPTION") SHALL BE CONVERTED INTO AN OPTION (AN "ADJUSTED OPTION") to acquire a total purchase the number of 400,000 shares Vianet Shares equal to the number of Infinop Shares subject to such Infinop Stock Option immediately prior to the Corporation's common stock Effective Time multiplied by the Conversion Ratio (rounded to the nearest whole number of Vianet Shares), at an exercise price per share equal to the closing sale exercise price for each such Infinop Share subject to such option divided by the Conversion Ratio, and all references in each SUCH OPTION TO INFINOP SHALL BE DEEMED TO REFER TO VIANET, WHERE APPROPRIATE; PROVIDED, HOWEVER, that the adjustments provided in this clause with respect to any options which are "incentive stock options" (as defined in Section 422 of the Corporation's common stock as reported by Code) or which are described in Section 423 of the American Stock Exchange on the date hereofCode, shall be affected in a manner consistent with the terms requirements of such option to be evidenced by (iSection 424(a) one option letter agreement in of the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common StockCode, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii2) one option letter agreement in Vianet shall assume the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares obligations of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available Infinop under the Company's 1993 Infinop Stock Options and the Infinop 1998 Stock Option Plan (the "1993 PlanINFINOP STOCK OPTION PLAN") to cover and stock option agreements between Infinop and the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (cindividuals listed on Section 4(b)(b) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both Disclosure SCHEDULE (iTHE "INFINOP STOCK OPTION AGREEMENTS"). For purposes of this Section 2(d) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitationviii), the period of exercisability of stock options under the Plan upon termination of employment for cause or without causeConversion Ratio shall be adjusted if Adjustment Escrow Shares (as defined below) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, are delivered to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive Vianet as a result of an Employer Breach or (za reduction in the Merger Consideration pursuant to Section 2(d)(x) by such that the Corporation by reason of Conversion Ratio will equal the Executive's disability or death prior actual rate at which Infinop Shares are converted into Vianet Shares in the Merger after giving effect to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the full dollar amount of such difference being reduction. The other terms of each Adjusted Option, and the Infinop Stock Option Plan and Infinop Stock Option Agreements shall continue to apply in accordance with their terms. The date of grant of each Adjusted Option shall be the date on which the corresponding Infinop Stock Option was granted. Vianet agrees that the Infinop Stock Option Plan shall be amended, to the extent necessary, to reflect the transactions contemplated by this Agreement, including, but not limited, to the conversion of Infinop Shares held or to be awarded or paid pursuant to the Infinop Stock Option Plan and the Infinop Stock Option Agreements into Vianet Shares on a basis consistent with the transactions contemplated by this Agreement. Vianet shall (x) reserve for issuance the number of Vianet Shares that will become subject to the Infinop Stock Option Plan and the Infinop Stock Option Agreements referred to as in this clause and (y) issue or cause to be issued the "Tax Difference" in respect appropriate number of such exercise). In computing Vianet Shares pursuant to the Tax Difference, Infinop Stock Option Plan and the amount Infinop Stock Option Agreements upon the exercise or maturation of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed rights existing thereunder at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphEffective Time.

Stock Options. (a) As additional compensation for his services hereunderAt the Effective Time, each outstanding Target Option under the Corporation Target Option Plan, whether vested or unvested, shall grant be assumed by Acquiror and deemed to Executive constitute an option under the Corporation's 1993 Stock Option Plan (the an "PlanAcquiror Option") to acquire a total acquire, on the same terms and conditions as were applicable under the Target Option, the same number of 400,000 shares of Acquiror Common Stock as the Corporation's common stock holder of such Target 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 number), at an exercise a price per share (rounded down to the nearest whole cent) equal to (i) the closing sale aggregate exercise price for the shares of Target Common Stock otherwise purchasable pursuant to such Target Option divided by (ii) the number of full shares of Acquiror Common Stock deemed purchasable pursuant to such Acquiror Option in accordance with the foregoing; provided, however, that, in the case of any -------- ------- Target Option to which Section 422 of the CorporationCode 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 Acquiror of the Target Options pursuant to this Section 6.4(a), Target shall be deemed to have assigned to Acquiror, effective at the Effective Time, Target's common stock as reported by right to repurchase unvested shares of Target Common Stock issuable upon the American Stock Exchange on exercise of the date hereofTarget Options or previously issued upon the exercise of options granted under the Target Option Plan, in accordance with the terms of such the Target Option Plan and the related stock option to be evidenced by (i) one option letter agreement in agreements and stock purchase agreements entered into under the form annexed as Exhibit "A" hereto ("Target Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")Plan. (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under As soon as practicable after the Company's 1993 Stock Effective Time, Acquiror shall deliver to the participants in the Target Option Plan appropriate notice setting forth such participants' rights pursuant thereto and the grants pursuant to the Target Option Plan shall continue in effect on the same terms and conditions (subject to the "1993 Plan"adjustments required by this Section 6.4 after giving effect to the Merger). Acquiror shall comply with the terms of the Target Option Plan and the parties intend that, to the extent required by, and subject to the provisions of, such Target Option Plan and Sections 422 and 424(a) of the Code, that Target Options which qualified as incentive stock options prior the Effective Time continue to cover qualify as incentive stock options after the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1Effective Time, and this provision shall be interpreted consistent with that intent. (c) In Acquiror shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Acquiror Common Stock for delivery upon exercise of Target Options assumed in accordance with this Section 6.4. As soon as practicable after the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both later of: (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of DirectorsOctober 24, in the issuance of stock options under the Plan2000, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by 20 days after the Corporation is terminated Closing Date, Acquiror shall file a registration statement on Form S-8 (xor any successor or other appropriate forms) by under the Corporation for any reason other than for Cause, Securities Act or another appropriate form with respect to the shares of Acquiror Common Stock subject to such options and shall use its best efforts to maintain the effectiveness of such registration statement or registration statements (y) by Executive as a result of an Employer Breach or (z) by and maintain the Corporation by reason current status of the Executive's disability prospectus or death prior to the expiration of the prospectuses contained therein) for so long as such options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphremain outstanding.

Stock Options. (a) Each Stock Option (as defined herein) that is outstanding and unexercised immediately prior to the Effective Time, and that is not then vested and exercisable, shall become fully vested and exercisable on an accelerated basis immediately prior to the Effective Time. As additional compensation for his services hereunder, of the Corporation shall grant to Executive an option under Effective Time and in accordance with the Corporation's 1993 terms of the Stock Option Plan (as defined herein), each Stock Option that is outstanding and unexercised immediately prior to the "Plan"Effective Time shall be cancelled in exchange for the right to receive from Parent or the Surviving Corporation consideration (the aggregate of such payments being the “Option Consideration”) equal to acquire a total the difference of 400,000 shares (i) the product of (x) the Corporation's common stock at an excess (if any) of (A) the Common Per Share Consideration over (B) the exercise price per share equal to of Company Common Stock for such Stock Option times (y) the closing sale price number of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Company Common StockStock underlying such Stock Option, minus (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and applicable withholding taxes, minus (iii) one option letter agreement the portion of the Escrow Fund to be deposited in the form annexed Escrow Fund on such holder’s behalf pursuant to Section 1.13(c). Each holder of Stock Options cancelled in accordance with this Section 1.10(a) shall, as Exhibit "B" hereto ("of the Effective Time, cease to have any rights with respect thereto, other than the right to receive the stock and cash payment pursuant to this Section 1.10(a) attributable to such cancelled Stock Option. The Option Letter B"Consideration issued to each holder of Stock Options cancelled in accordance with this Section 1.10(a) being exercisable for 150,000 shares shall be in the same proportion of cash and Parent Common Stock (such option letters being referred as issued to collectively herein as the "Plan Option Letters"a holder of Company Common Stock pursuant to Section 1.6(a). (b) The Prior to the Effective Time, the Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both shall (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover take all the shares of Common Stock issuable upon exercise of Option Letter A-2 lawful and Option Letter B and commercially reasonable actions (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directorsincluding, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, obtaining all necessary consents and waivers from the period holders of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required necessary to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior give effect to the expiration of the options evidenced transactions contemplated by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%Section 1.10(a) and (ii) take all lawful and commercially reasonable actions necessary such that, on and after the highest marginal state income tax rate applicable Effective Time, the Stock Option Plan shall be cancelled, the Stock Options shall cease to Executiverepresent the right to purchase Company Common Stock and no Stock Option holder shall have any right or option to purchase Company Common Stock or any other equity security of the Company, Parent, or the Surviving Corporation (in each case in respect case, without the creation of ordinary income, in effect at any additional liability of the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after Company or any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphSubsidiaries).

Stock Options. (a) As additional compensation for his services hereunder, the Corporation Executive shall grant to Executive an option under the Corporation's 1993 Stock Option Plan receive 10,000,000 stock options (the "Plan"“Options”) to acquire a total of 400,000 purchase 10,000,000 shares of the Corporation's Company’s common stock stock, par value $0.001 (the “Common Stock”). The Options are exercisable at an exercise price $.01 per share and vest as of the date this agreement is executed by both parties and are exercisable for a period of five years from the effective date of this Agreement. Additionally, the Options are subject to a cashless exercise provision whereby payment upon exercise of the Options may be made at the option of the Executive either in (i) cash, wire transfer or by certified or official bank check payable to the order of the Company equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stockapplicable aggregate exercise price, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares by delivery of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and the Options in accordance with Section (iiA) appropriate amendments below (“Cashless Exercise”) or (iii) by a combination of any of the foregoing methods (in accord with Section (A) below), for the number of shares of Common Stock specified in such form (as such exercise number shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable to the Plan specifically confirming Executive per the terms of the Options) and the Executive shall thereupon be entitled to receive the number of duly authorized, validly issued, fully paid and nonassessable shares of Common Stock determined as provided herein. (A) If the Fair Market Value of one share of Common Stock is greater than the exercise price (at the date of calculation as set forth below) and no Registration Statement relating to the shares of Common Stock underlying the Options is in effect, in lieu of exercising the Options for cash, the Executive may elect to receive shares equal to the value (as determined below) of the Option (or the portion thereof being cancelled) by surrender of the Option at the principal office of the Company together with the properly endorsed notice of cashless exercise in which event the Company shall issue to the Executive a number of shares of Common Stock computed using the following formula: X=Y (A-B) A Where X= the number of shares of Common Stock to be issued to the Executive Y= the number of shares of Common Stock purchasable under the Option or, if only a portion of the Option is being exercised, the portion of the Option being exercised (at the date of such calculation) A= the Fair Market Value of one share of the Company’s Common Stock (at the date of such calculation) B= Exercise Price (as adjusted to the date of such calculation) The Company grants Executive cost free piggyback registration rights for the shares underlying the Options and will use its best efforts to first include the options in an existing approved option benefits plan and register the underlying shares in a Form S-8 Registration statement, or thereafter in the next registration statement filed by the Company. It is further agreed that Executive will be entitled to receive additional options from time to time during the term of the within Agreement to assure that Executive has the right to exercise options to maintain beneficial ownership of the Corporation's Board Company’s Common Stock in the equivalent of Directors, in a minimum of 5% (five percent) of the issued and outstanding shares of Common Stock. For the avoidance of doubt regarding the issuance of stock additional options to Executive under the Planthis Agreement, to determine provisions regarding terms of the exercise of such stock said additional options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially will contain the same terms and provisions conditions as the Options awarded under this Agreement. The Company will issue any additional Options to Executive pursuant to this provision within ten (10) days of the Plan Stock Optionsend of a fiscal quarter. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. (a) As additional compensation for his services hereunderThe Company and the Shareholders agree, that upon the Closing Date, the Corporation Company shall grant to Executive an option under the Corporationassume PTI's 1993 1998 Stock Option Plan (the "PTI Option Plan") to acquire a total of 400,000 shares of the Corporation's common and all outstanding stock at an exercise price per share equal option grants made under that Plan prior to the closing sale price Closing Date. The Company agrees that as soon as reasonably practical following the Closing Date, it shall (a) amend the PTI Option Plan to provide for the grant of the Corporation's common stock as reported by the American Company Common Stock Exchange on the date hereof, with the terms in lieu of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of PT Common Stock, (iib) one convert the stock that can be purchased under the assumed stock option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of grants from PT Common Stock to Company Common Stock and (iiic) one option letter agreement in take such other actions as shall bc ncccssary to convert the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock PTI Option Plan to a Company-sponsored plan (the "1993 Company Option Plan") to cover the shares of ), including, but not limited to, reserving Company Common Stock issuable for issuance under the Company Option Plan. The Shareholders and the Company agree that PTI shall be a third party ben&ciary uf this Section 19. Each outstanding stock option grant assumed by the Company under this Agreement will continue to Executive upon exercise of Option Letter A-1.have, and be subject to, the same terms and conditions as applied to those grants immediately prior to the Closing Date, except that: (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing each such stock option grant will be exercisable: (or will become exercisable in accordance with its terms) for shares of Company Common Stock equal to twice the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of PT Common Stock issuable (upon exercise of Option Letter A-2 and Option Letter B and (iiexercise) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death option immediately prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and Closing Date; and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect per share exercise price for the shares of ordinary income, in effect at the time of Company Common Stock issuable under such option (upon exercise. Such amount ) shall be paid by equal to one-half of the Corporation within ninety per share exercise price for PT Common Stock under the option immediately prior to the Closing Date (90) days after any such exerciserounded to the nearest whole cent). Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters(ii) above, the Corporation per share exercise price for Company Common Stock under each assumed option that is intended to be an "incentive stock option" (within the meaning of Code Section 422) under the PTI Plan shall have no obligation be adjusted as required by Code Section 424(a) so as not to pay Executive any amount in excess constitute a modification of $250,000 in the aggregate in respect option within the meaning of its obligations under this subparagraphCode Section 424(h).

Stock Options. (a) As additional compensation for his services hereunderAt the Effective Time, each option granted by USI to purchase shares of USI Common Stock, or by Zurn to purchase shares of Zurn Common Stock, which is outstand▇▇▇ and unexercised immedia▇▇▇▇ prior to the Corporation Effective Time (collectively, "Options"), shall grant to Executive be assumed by Superholdco and converted into an option under the Corporation's 1993 Stock Option Plan (the a "PlanSuperholdco Option") to acquire a total of 400,000 purchase shares of Superholdco Common Stock in such amount and at such exercise price as provided below and otherwise having the Corporation's common stock at an same terms and conditions as nearly as practicable as are in effect immediately prior to the Effective Time: (i) the number of shares of Superholdco Common Stock to be subject to the Superholdco Option shall be equal to the product of (x) the number of shares of USI Common Stock or Zurn Common Stock subject to the original Option and (y) the US▇ ▇▇change Ratio (if the original Option related to USI Common Stock) or the Zurn Exchange Ratio (if the original Option related to Zurn Com▇▇▇ Stock); (ii) the exercise price ▇▇▇ share of Superholdco Common Stock under the Superholdco Option shall be equal to (x) the exercise price per share equal to the closing sale price of the Corporation's common stock as reported by USI Common Stock or Zurn Common Stock under the American Stock Exchange on the date hereof, with the terms of such option to be evidenced original Option divided by (iy) one option letter agreement in the form annexed as Exhibit "A" hereto ▇▇▇ Exchange Ratio ("if the original Option Letter A-1") being exercisable for 100,000 shares of related to USI Common Stock, ) or the Zurn Exchange Ratio (ii) one option letter agreement in if the form annexed as Exhibit "A-2" hereto ("original Option Letter A-2") being exercisable for 150,000 shares of Common Stock and related to Zurn Com▇▇▇ Stock); and (iii) one option letter agreement in upon each exer▇▇▇▇ of Superholdco Options by a holder thereof, the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 aggregate number of shares of Superholdco 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. The adjustments provided herein with respect to any Options which are "incentive stock options" (such option letters being referred to collectively herein as defined in Section 422 of the "Plan Option Letters")Code) shall be effected in a manner consistent with Section 424(a) of the Code. (b) The Company represents and warrants that there are Superholdco shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Superholdco Common Stock currently available under for delivery upon exercise of Superholdco Options in accordance with this Section 2.8. At or prior to the Company's 1993 Stock Option Plan Effective Time, Superholdco shall file a registration statement on Form S-8 (the "1993 Plan"or any successor or other appropriate forms) with respect to cover the shares of Superholdco Common Stock issuable subject to Executive upon exercise the Superholdco Options and shall use its reasonable best efforts to maintain the effectiveness of Option Letter A-1. such registration statement or registration statements (c) In and maintain the event that the Company's stockholders fail at the next annual meeting of stockholders current status of the Corporation to approve both (iprospectus or prospectuses contained therein) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a so long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphSuperholdco Options remain outstanding.

Stock Options. (a) As additional compensation for his services hereunderof the Effective Time, the Corporation Stock Option Committee of the Board of Directors of the Company shall grant to the Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 purchase 300,000 shares of the CorporationCompany's common stock at an exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange ("Common Shares") on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement and conditions contained in the form of stock option agreement annexed as Exhibit "A" hereto ("Option Letter A-1"and consistent with the provisions of Section 5(b)(iii)-(iv) being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")hereof. (b) The Company represents and warrants that there are sufficient shares Subject to the absolute authority of Common Stock currently available under the Company's 1993 Stock Option Plan Committee of the Board of Directors of the Company from time to time to grant (the "1993 Plan"or not to grant) to cover the shares of Common Stock issuable eligible individuals options to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders purchase common stock of the Corporation Company ("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 (in addition to approve both those described in Section 5(a) hereof), on the following terms and conditions (and any Options so granted shall be subject to the following terms and conditions, which shall govern any conflicts in the terms hereof with any terms and conditions in any stock option agreement): (i) Target awards will be in an amendment increasing amount (plus or minus 25%) equal to 150% of Executive's salary; (ii) For purposes of determining the number of shares available subject to a given Option grant, the value of such Option shall be determined using the Black-Scholes valuation method, or another generally recognized valuation method which is being used uniformly by the Company for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon its senior executives; (iii) The exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right price per share of the Corporation's Board of Directors, in Options shall be the issuance of stock options under the Plan, to determine provisions regarding terms fair market value of the exercise common stock on the date of such stock grant, and the Options shall expire on the tenth anniversary of the date of grant; and (iv) The Options shall vest ratably on the first three anniversaries of the date of grant; provided, however, that all Options (and all other options to purchase Common Shares then held by the Executive) which are not then vested shall become fully vested and immediately exercisable during the remaining original term of the option, upon the occurrence of any of the following events (including without limitation"Acceleration Events"): Executive's Retirement, the period of exercisability of stock options under the Plan upon death, Disability, a Change in Control, and termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) Company without Cause or by the Corporation Executive for any reason Good Reason; and (v) The Options shall be granted on such other than for Cause, (y) by Executive terms and conditions as a result of an Employer Breach or (z) by are generally made applicable to Options granted to the Corporation by reason other senior executives of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphCompany.

Stock Options. (a) As additional compensation a material inducement for his services hereunderEmployee to accept the position of Chief Executive Officer and to enter into this Agreement, the Corporation Employee shall grant be eligible to Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") receive awards of options to acquire a total of 400,000 purchase shares of the Corporation's Company’s common stock at an exercise price stock, par value $0.01 per share equal to the closing sale price of the Corporation's common stock (“Common Stock”), as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by follows: (i) On the Effective Date, Employee shall receive an award of options to purchase one option letter agreement in the form annexed as Exhibit "A" hereto million ("Option Letter A-1"1,000,000) being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (the “Sign-on Grant”). A portion of the Sign-on Grant may, in the sole discretion of the Compensation Committee, be awarded outside the Equity Plan (as defined below) pursuant to the Company’s standard stock option award agreement with such option letters additional terms consistent with the Equity Plan as may be necessary to account for the fact that such portion of the Sign-on Grant is being referred to collectively herein as made on a stand-alone basis outside the "Plan Option Letters")Equity Plan. (bii) The In each of calendar years 2009 and 2010 during the Employment Period, at the time the Company represents and warrants that there are sufficient makes equity grants to its other senior officers for such years, Employee shall receive awards of options to purchase up to six hundred twenty-five thousand (625,000) shares of Common Stock currently available under in the aggregate based on the achievement of performance goals for the prior year as determined by the Compensation Committee in its sole discretion (the “Annual Grants,” and together with the Sign-on Grant, the “Option Awards”). The Option Awards shall be awarded under, and shall be subject to the terms and conditions of, the Company's 1993 Stock Option Plan ’s 2005 Equity Compensation Plan, as may be amended from time to time (the "1993 “Equity Plan"”) and subject to cover the shares provisions of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at ’s standard stock option award agreement which shall contain the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of DirectorsCompany’s customary provisions, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, an exercise price equal to the period fair market value of exercisability of stock options under the Plan upon termination of employment for cause or without causeCommon Stock on the grant date (as determined in accordance with the Equity Plan) and provisions regarding forfeiture of stock options under the Plan upon termination of employmentand, subject to Section 7, the Company agreesstandard post-termination exercise periods set forth in the Equity Plan. Subject to Section 7, upon receipt the Option Awards shall vest annually over a three year period on each anniversary of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior Effective Date with respect to the expiration of Sign-on Grant with the options evidenced by first tranche vesting on the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectivelyfirst anniversary thereof, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable grant date with respect to Executivethe Annual Grants with the first tranche vesting on the first anniversary thereof, subject in each case to Employee’s continuous employment with the Company through each such vesting date and shall have an outside exercise date of ten (10) years from the grant date, subject to earlier termination in respect of ordinary incomecertain circumstances. Notwithstanding the foregoing, in effect at to the time of such exercise. Such amount extent necessary, the Annual Grants (other than the Sign-on Grant) shall be paid subject to approval by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything Company’s stockholders of an amendment to the contrary in this Agreement or the Equity Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in increasing the aggregate in respect and individual number of its obligations shares of Common Stock available for grant thereunder. In the event the necessary stockholder approval is not received, Employee shall not be entitled to the Annual Awards to the extent shares of Common Stock are not available for grant under this subparagraphthe Equity Plan.

Stock Options. Subject to Section 14(a) below, the Company agrees to the following treatment of Weinreb’s Option Grants and his stock ownership in the Company. (a) As additional compensation for his services hereunderIn accordance with the terms of the Company’s 2003 Equity Compensation Plan, all unvested options under any of the Corporation Option Grants shall grant to Executive an option under be forfeited as of the Corporation's 1993 Stock Termination Date, except W▇▇▇▇▇▇ shall not forfeit any unvested options under: (i) the Option Plan (the "Plan") Grant to acquire a total of 400,000 10,000 shares of the Corporation's Company’s common stock at an exercise price of $4.95 per share equal share, dated September 27, 2007, (the “Merger Option”); and (ii) the Option Grant to acquire 10,000 shares of the closing sale Company’s common stock at an exercise price of $1.63 per share, dated February 27, 2008, (the Corporation's common stock as reported by the American Stock Exchange on the date hereof, “Cash Flow Option”). In accordance with the terms of such option to be evidenced by (i) one option letter agreement in each grant, both the form annexed as Exhibit "A" hereto ("Merger Option Letter A-1") being exercisable for 100,000 shares and the Cash Flow Option shall fully vest on the consummation of Common Stockthe merger of China Biopharmaceuticals Holding, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")Inc. into CBH Acquisition, LLC. (b) The Provided the Company’s shareholders approve Proposal No. 9 set forth in the Form S-4 filed by the Company represents with the Securities and warrants that there are sufficient shares Exchange Commission, which approves an amendment to the Company’s 2003 Equity Compensation Plan to permit the Company’s Board of Common Stock currently available Directors to reprice outstanding options under the plan and provided the Company's 1993 Stock ’s Board of Directors reprices the exercise price of outstanding options under the plan to the greater of $.80 and the fair market value of the Company’s common stock as of the date of the repricing, the exercise price of all outstanding options under the Option Plan (Grants shall be repriced to the "1993 Plan") to cover greater of $.80 and the shares fair market value of Common Stock issuable to Executive upon exercise the Company’s common stock as of Option Letter A-1the date of the repricing. (c) In The Company hereby amends the event that terms of each outstanding Option Grant to extend the Company's stockholders fail at period in which W▇▇▇▇▇▇ may exercise vested options following the next annual meeting of stockholders of Termination Date to the Corporation to approve both earlier of: (i) an amendment increasing the number original expiration date of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of each Option Letter A-2 and Option Letter B and Grant; (ii) appropriate amendments the second anniversary of the Termination Date; and (iii) the date on which the Company determines, in good faith, that W▇▇▇▇▇▇ has violated the Restrictive Covenant Agreement, except that the Company does not so amend the Option Grant to acquire 100,000 shares of the Company’s common stock at an exercise price of $1.95 per share, dated May 21, 2009, (the “2009 ECP Option”). The 2009 ECP Option shall remain exercisable through its original expiration date of May 20, 2019, subject to the Plan specifically confirming conditions of (iii), above. Any vested options that remain unexercised after the right earliest of the Corporation's applicable dates above shall be forfeited and cancelled without any further action by the Company or its Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In W▇▇▇▇▇▇ shall remain subject to the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason terms of the Executive's disability or death prior Lock Up Agreement, except that, subject to the expiration approval of China Biopharmaceuticals Holding, Inc., commencing on December 1, 2▇▇▇, ▇▇▇▇▇▇▇ may sell up to 30,000 shares of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, Company’s common stock in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercisecalendar month. Notwithstanding anything to the contrary foregoing, any sales by W▇▇▇▇▇▇ of the Company’s common stock must comply in this Agreement or all respects with the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphapplicable securities laws.

Stock Options. (a) As additional compensation for his services hereunderIn addition to any options to purchase securities of the Company which may be granted to Employee during the term, whether pursuant to the Corporation shall grant to Executive an option under the Corporation's 1993 1997 Stock Option Plan of the Company or any other plan which may be subsequently adopted by the Board, the Company hereby grants to Employee options to purchase three million shares of common stock (the "PlanCFO Options") to acquire a total of 400,000 shares . One-third of the Corporation's common stock CFO Options shall be exercisable upon execution of this Agreement. An additional one-third of the CFO Options shall vest and be exercisable on January 15, 1999, and the remaining one-third of the CFO Options shall vest and be exercisable on January 15, 2000. All CFO options or other options granted to Employee shall vest immediately and may be exercised upon any "Change of Control" or upon any "Company Termination" as defined in section 9. The CFO options shall have a term of ton years and shall be exercisable at an exercise a price per share equal to the closing sale of $0.50. The option exercise price of the Corporation's CFO options shall be adjusted as appropriate for forward or reverse stock splits, stock dividends, recapitalizations, spin-offs, or divisions of the Company and other like events. The Company shall register under the Securities Act of 1933, as amended, (the "Act"), all of the shares of common stock underlying the CFO Options (the "CFO Shares") at the same time as reported by the American Stock Exchange on Company registers shares of common stock (or other securities) in any primary or secondary offering of securities which are registered under the Act, provided that Employee shall agree to any reasonable "lock-up* restricting sale of the CFO Shares only to the extent that other principal shareholders, officers and directors are also required to execute similar lock-up agreements provided that any such lock-up period shall not extend beyond one hundred twenty days from the date hereof, with the terms of such option to be evidenced by CFO Shares are registered under the Act. Notwithstanding the foregoing Employee shall not sell any CFO Shares during 1998 (the "1998 Lock-Up") unless (i) one option letter agreement there is a "Change of Control" or there is a "Company Termination" as defined in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) section 9 or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result members of an Employer Breach management elect to sell or (z) by the Corporation by reason dispose of securities of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax Company during 1998 (collectively, "Income TaxesManagement Sales") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing The 1998 Lock-Up shall terminate and have no further force or effect upon the Tax Difference, the amount occurrence of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising any event described in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus clause (i) above. The Company shall provide written notice to Employee in advance of any Management Sales setting forth the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation details thereof within ninety (90) not more than two business days after the Company learns that such sales or dispositions of securities may be permitted or may otherwise be scheduled. During 1998 Employee may from time to time sell or dispose of that number of CFO Shares which is not greater than the greatest number of Management Sales made during 1998 by any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess other member of $250,000 in the aggregate in respect of its obligations under this subparagraphmanagement.

Stock Options. (a) As additional compensation All outstanding options that may be exercised for his services hereundershares of NJCB Common Stock (whether or not vested) (each, a “Stock Option” and collectively the “Stock Options”) are described in Section 3.2(a) of the NJCB Disclosure Schedule (as such term is defined in Article III of this Agreement) and are presently governed by NJCB’s stock option plans as set forth in Section 3.2(a) of the NJCB Disclosure Schedule (collectively, the Corporation “NJCB Stock Compensation Plans”) and the agreements pursuant to which such Stock Options were granted (each, an “Option Grant Agreement”). NJCB shall grant to Executive an option under take all requisite action so that, at the Corporation's 1993 Effective Time, each Stock Option Plan (that is outstanding immediately prior to the "Plan") to acquire a total of 400,000 shares Effective Time, whether or not then vested or exercisable, shall be, by virtue of the Corporation's common stock Merger and without any action on the part of 1st Constitution, the Bank, NJCB, the holder of that Stock Option or any other Person, cancelled and converted into the right to receive from 1st Constitution, the Bank and/or NJCB (and 1st Constitution, the Bank and/or NJCB shall pay to such holder), at the Effective Time, an exercise price per share amount in cash, without interest, equal to the closing sale product of (x) the aggregate number of shares of Common Stock subject to such Stock Option, multiplied by (y) the excess, if any, of $4.00 over the per share exercise price under such Stock Option, less any Taxes required to be withheld. Stock Options with a per share exercise price greater than $4.00 shall be cancelled as of the Corporation's common stock as reported Closing by the American Stock Exchange on the date hereof, NJCB in accordance with the terms of such option the relevant NJCB Stock Compensation Plan and the holders thereof shall be entitled to be evidenced by (i) one option letter agreement in no consideration from 1st Constitution, the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")Bank or NJCB. (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause At or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectivelyEffective Time, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option LettersNJCB, the Corporation agrees to reimburse Executive NJCB Board and the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect compensation committee of such exercise board, as applicable, shall adopt any resolutions and take any actions (including obtaining any employee consents) that may be necessary to effectuate the amount provisions of such difference being referred to as the "Tax Difference" in respect paragraph (a) of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphSection 1.6.

Stock Options. (a) As additional compensation for his services hereunderThroughout the Employment Period and to the extent determined .by the Board of Directors in its discretion to be commensurate with Vini▇▇'▇ ▇▇▇el of responsibility within the Company, Vini▇▇ ▇▇▇ll be entitled to participate in any stock option plan that may be adopted by the Company in its discretion and in which any of the Company's executive employees participate; provided, however, the Corporation shall grant Company agrees to Executive an promptly implement a stock option under plan to reward Vini▇▇ ▇▇▇ other key officers of the Corporation's 1993 Stock Option Plan Company for achieving annual targets with respect to the Company Business and with respect to its Common Stock- (as defined below), as such targets are reasonably adopted by the Board of' Directors from time to time. In addition to the foregoing, Vini▇▇ ▇▇▇ll be entitled, upon the execution of this Agreement, to receive options (the "PlanVini▇▇ ▇▇▇ions") to acquire a total of 400,000 1,000,000 shares of the CorporationCompany's common stock at stock, par value $0.001 per share (the "Common Stock"). The Vini▇▇ ▇▇▇ions shall provide for an exercise price per share of Common Stock equal to the closing sale price of the Corporation's common stock such Common Stock, as reported by on NASDAQ on September 26, 2003, Subject to applicable law, at Vini▇▇'▇ ▇▇▇uest, (be Company shall use best efforts to qualify the American Vini▇▇ ▇▇▇ions as Incentive Stock Exchange on Options under applicable 'sections of the date hereofInternal Revenue Code and regulations promulgated thereunder. The Vini▇▇ ▇▇▇ions shall be issued pursuant to that certain Stock Option Agreement, with substantially in the terms of such option to form attached hereto as Exhibit C (the "Vini▇▇ ▇▇▇ion Agreement"). As set forth in the Vini▇▇ ▇▇▇ion Agreement, the Vini▇▇ ▇▇▇ions shall vest and be evidenced by exercisable into Common Stock, assuming the Employment Period has not otherwise been earlier terminated, as follows: (i) one option letter agreement in 250,000 on January 2, 2001; (ii) 35,714 on the form annexed as Exhibit "A" hereto 1st day or each calendar month during the Employment Period, beginning February 1, 2001; and ("Option Letter A-1"iii) being exercisable for 100,000 shares 6 on October 1, 2002. (iv) Notwithstanding the foregoing, if the closing price of Common Stock, as reported on the NASDAQ (iithe "Closing Price"), for at least 15 business days during any 30 business days, equals the price set forth below, any un-vested Vini▇▇ ▇▇▇ions (in addition to the vesting schedule otherwise set forth herein) one option letter agreement in shall vest and be exercisable into Common Stock, assuming the form annexed Employment Period has not otherwise been earlier terminated, as Exhibit "A-2" hereto follows: ("Option Letter A-2"1) being exercisable for 150,000 shares If the Closing Price is $6.00, the additional number of Common Stock and to vest is 100,000; and (iii2) one option letter agreement in If the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares Closing Price is $8.00, the additional number of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters").vest is 100,000; and (b3) The Company represents and warrants that there are sufficient shares If the Closing Price is $10.00, the additional number of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1vest is 100,000. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. Effective upon the date of the Employee's employment, the Employee shall be awarded the following options: (a) As additional compensation for his services hereunder, An incentive stock option issued pursuant to the Corporation shall grant to Executive an option under the CorporationCompany's 1993 1997 Stock Option Plan for such number of shares of common stock of the Company that is equal to the quotient of $300,000 divided by the fair market value per share of the common stock of the Company on November 2, 1998 (the "PlanGrant Date") rounded down to acquire a total the nearest whole number of 400,000 shares shares. This option shall vest in accordance with the provisions of the Corporation's common stock at an exercise price per share equal to the closing sale price of the Corporation's common stock 1997 Stock Option Plan as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by follows: (i) one one-third of the shares covered by the option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, may be exercised after two years; (ii) one one-third of the shares covered by the option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock may be exercised after three years; and (iii) one one-third of the shares covered by the option letter agreement in may be exercised after four years. The option expires after five years. The incentive stock option shall be subject to all of the form annexed as Exhibit "B" hereto ("terms and provisions of the 1997 Stock Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")Plan. (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under A non-statutory stock option issued pursuant to the Company's 1993 1997 Stock Option Plan for such number of shares of the common stock of the Company that is equal to the difference between 90,000 shares and the number of shares of common stock covered by the incentive stock option granted pursuant to subsection (a) above. These options shall vest as follows: (i) after one year, 20,000 shares; (ii) after two years, the "1993 Plan") to cover difference between 20,000 shares and one-third of the shares subject to the incentive stock option granted under subsection (a) above; (iii) after three years, the difference between 20,000 shares and one-third of Common the shares subject to the incentive stock option granted under subsection (a) above; (iv) after four years, the difference between 20,000 shares and one-third of the shares subject to the incentive stock option granted under subsection (a) above; and (v) after six years, the balance of the shares covered by the non-statutory stock option. The non-statutory stock option expires after six years. The non-statutory stock option shall be subject to all of the terms and provisions of the 1997 Stock issuable to Executive upon exercise of Option Letter A-1Plan. (c) In A stock option issued pursuant to the event that the Company's stockholders fail at the next annual meeting Nichols TXEN Corporation 1998 Stock Option Plan for 10,000 shar▇▇ ▇▇ ▇ommon stock of stockholders of the Corporation to approve both Nichols TXEN Corporation. This option shall vest as follows: (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and on▇-▇▇▇▇▇ after two years; (ii) appropriate amendments one-third after three years; and (iii) one-third after four years. The option expires after five years. The Nichols TXEN Corporation option shall be subject to the Plan specifically confirming the right all of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms ▇▇▇▇▇ and provisions of the Plan Nichols TXEN Corporation 1998 Stock Options. (d) In Option Plan. The Nichols TXEN ▇▇▇▇▇ration option shall have an exercise price equ▇▇ ▇▇ ▇he price at which the common stock of Nichols TXEN Corporation is initially offered for sale to the publi▇ ▇▇▇ ▇s shown on the cover of the prospectus included in the registration statement which is declared effective by the Securities and Exchange Commission. Notwithstanding the foregoing, in the event that (i) Nichols TXEN Corporation does not complete an initial public off▇▇▇▇▇ of its common stock within four months of the Corporation is required date of this Agreement, then the Company will issue to amend the Plan Option Letters Employee a stock option for 10,000 shares pursuant to Paragraph 5(c) or (ii) Executivethe Company's employment by 1997 Stock Option Plan. Such option shall have the Corporation is terminated (x) by same terms as to vesting and expiration as stated above, but the Corporation exercise price for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by such option shall be the Corporation by reason fair market value per share of the ExecutiveCompany's disability or death prior common stock on the date Nichols TXEN Corporation determines not to the expiration complete an initial pub▇▇▇ ▇▇fering of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise common stock of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise)Nichols TXEN Corporation. In computing the Tax Difference, the amount of taxes payable by Executive Such option shall be determined by assuming that subject to all th▇ ▇▇▇▇▇ and provisions of the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Company's 1997 Stock Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphPlan.

Stock Options. (a) As additional compensation for his services hereunderAt the Effective Time, the Corporation shall grant to Executive an option Holding Company will assume ------------- the Bank's rights and obligations under the CorporationBank's 1993 1999 Stock Option Plan (the "1999 Plan") to acquire a total of 400,000 shares and under each of the Corporation's outstanding stock options to purchase common stock of the Bank previously granted under the 1999 Plan (each such stock option existing immediately prior to the Effective Time being called an "Existing Option" and each such stock option so assumed by the Holding Company being called an "Assumed Option"). By reason of such assumption, and each option agreement that evidenced the right to purchase Bank common stock shall thereafter represent, and each holder of an Existing Option shall have, the right to purchase one share of Holding Company common stock for each share of Bank common stock which such holder was entitled to purchase under his or her Existing Option at an exercise price per share equal to the closing sale exercise price of the Corporation's common stock as reported by Existing Options. Each Assumed Option shall constitute a continuation of the American Stock Exchange Existing Option, on the date hereofsame terms and conditions set forth in the 1999 Plan and in each optionee's stock option agreement that formerly evidenced the right to purchase Bank common stock, with the terms of such option to be evidenced by except as follows: (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Holding Company Common StockStock will be substituted for the shares of Bank common stock into which the existing options had been exercisable, (ii) one option letter agreement in the form annexed Holding Company shall be substituted for the Bank as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 the issuer of shares of Common Stock under the 1999 Plan and (iii) one option letter agreement the Holding Company shall be authorized under the 1999 Plan to issue options to purchase Holding Company shares not only to directors, officers and key employees of the Bank, but also to directors, officers and key employees of the Holding Company and any other subsidiaries it may establish in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary incomefuture. In addition, each option granted under the Corporation 1999 Plan at or after the Effective Time shall pay Executive an amount equal evidence the right to purchase shares of common stock of the Tax Difference arising in respect Holding Company rather than shares of such exercise multiplied by a fractioncommon stock of the Bank and the Plan shall be modified to so provide. In all other respects, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount 1999 Plan shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphunchanged.

Stock Options. Options to purchase shares of Communications Stock (a"Communications Options") As additional compensation and shares of Media Stock ("Media Options") which are unexercised as of the Separation Time and which were issued pursuant to the terms of the Amended U S WEST 1994 Stock Plan, the U S WEST Media Group 1996 Stock Option Plan, the U S WEST Media Group 1997 Stock Option Plan and the U S WEST Communications Group 1997 Stock Option Plan (collectively the "Option Plans") shall be treated as follows: (1) New U S WEST shall assume the U S WEST Communications Group 1997 Stock Option Plan and all obligations under such plan. (2) MediaOne shall retain the U S WEST Media Group 1996 Stock Option Plan and the U S WEST Media Group 1997 Stock Option Plan and all obligations under such plans. (3) MediaOne shall retain the Amended U S WEST 1994 Stock Plan and all obligations with respect to Media Options under such plan. (4) New U S West shall establish a new stock plan to be effective as of the Separation Time and shall assume, under such plan, all obligations with respect to Communications Options issued under the Amended U S WEST 1994 Stock Plan. (5) Unexercised options issued under any of the Option Plans shall continue in effect for their original term subject to paragraph (6) below and the following adjustments to reflect the transactions contemplated by the Separation Agreement. (i) No Media Dividend shall be distributed with respect to any Media Options. However, in accordance with the following sentence, the number of Media Options held by any person shall be converted into a higher number of options to purchase shares of MediaOne Common Stock and the exercise price of each such option shall be decreased. The number of options shall be increased and the exercise price of each share under each option shall be decreased to reflect the Media Dividend in a manner consistent with Accounting Rule EITF 90-9 in order to preserve the economic value of the options. (ii) The Communications Options shall be converted to options to purchase shares of New U S WEST Common Stock on a one for one basis; the exercise price shall not change. (6) Vested options under any of the Option Plans shall be exercised on and after the Separation Time by an Employee by contacting the stock plan administrator for his services hereunderor her employer or former employer. New U S WEST and MediaOne each agrees to act as agent (the "crossover agent") for the other (the "other company") in the case of an exercise of an option by an Employee of the crossover agent under an Option Plan of the other company. In addition, New U S WEST agrees to act as crossover agent in the Corporation shall grant case of an exercise of an option by a Terminated Communications Employee or Terminated Inc. Employee under an Option Plan of MediaOne; MediaOne agrees to Executive act as crossover agent in the case to an exercise of an option by a Terminated Media Employee under an Option Plan of New U S WEST. The crossover agent for the other company shall, by itself and/or through its own third-party arrangements (i) effect an option exercise of the applicable shares; (ii) report such exercise to the other company on a timely basis, not to exceed 30 days after the exercise; (iii) collect from the Employee, and remit and/or report to the Employee and/or the appropriate tax authorities, as applicable, all taxes incurred by the crossover agent (as the employing company) resulting from the exercise of an option under the Corporationother company's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option and all taxes required to be evidenced by (i) one option letter agreement in withheld from the form annexed Employee's proceeds as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms a result of the exercise of such stock options (including without limitation, the period of exercisability of stock options an option under the Plan upon termination of employment for cause other company's Option Plan; (iv) deliver the stock to the Employee or without cause) and provisions regarding forfeiture of stock options under pay the Plan upon termination of employment, Employee the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions excess of the Plan Stock Options. (d) In sales proceeds of the event that (i) applicable shares over the Corporation is sum of the exercise price and all taxes required to amend be withheld from the Plan Option Letters pursuant to Paragraph 5(c) or (ii) ExecutiveEmployee's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive proceeds as a result of the exercise; and (v) pay the other company an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior amount equal to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect price of such exercise (option on a timely basis, not to exceed 30 days after the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal other company agrees to honor the Tax Difference arising in respect separation policies of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus crossover agent (ior its subsidiaries) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time Separation Time for purposes of such exercisedetermining if a separated Employee is eligible to exercise an option under the other company's Option Plan. Such amount Written approval of the other company shall be paid by required before any changes adopted after the Corporation within ninety (90) days after any such exercise. Notwithstanding anything Separation Time in the crossover agent's separation policies may apply with respect to the contrary in this Agreement or crossover agent's Employees' exercise of options under the Plan other company's Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphPlan.

Stock Options. (ai) As additional compensation for his services hereunderThe Compensation Committee and the Board of Directors of Bancorp approved the granting to Employee of a stock option to purchase a number of shares equal to one percent (1.0%) of the current outstanding common stock of Bancorp (the “Common Stock”) with an exercise price equal to Five Dollars ($5.00) per share, but not less than the Corporation shall fair market value of the Common Stock on the date of grant to Executive an option (the “Equity Award”). The Equity Award will be granted under the Corporation's 1993 Stock Option Mission Community Bancorp 2011 Equity Incentive Plan (the "“Plan"”) pursuant to acquire a total of 400,000 shares separate agreement as contemplated by the Plan in a form approved by the Compensation Committee (the “Equity Award Agreement”). (ii) In addition to the foregoing option, due to the employee’s key role in executing the overall business strategy for the Central Coast Initiative, the Employee shall periodically be eligible to receive equity awards, at the sole discretion of the Corporation's common stock at an exercise price per share equal to the closing sale price Board of the Corporation's common stock as reported by the American Stock Exchange on the date hereofBancorp, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto of stock options ("Option Letter A-1"the “Additional Equity Awards”) being exercisable for 100,000 to purchase a number of shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Bancorp’s authorized but unissued Common Stock and equal to one percent (iii1.0%) one option letter agreement in of the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 amount of Bancorp’s Common Stock or warrants or rights to acquire shares of Common Stock (“Common Equity Equivalents”) sold and issued following the date hereof and during the Term other than shares (A) issued pursuant to the Plan or any other employee benefit arrangement or agreement providing Common Equity Equivalents of any kind to employees, directors or consultants of the Company, or any issuance of Common Stock upon the exercise or vesting of any such option letters being referred to collectively herein as the "Plan Option Letters"). Common Equity Equivalent, (bB) The Company represents and warrants that there are sufficient any shares of Common Stock currently available under or other Common Equity Equivalents issued in connection with a requirement to maintain the Company's 1993 capital ratios of Bancorp or its subsidiaries at the level required by any agreement, approval, order, consent, memorandum of understanding, formal agreement, directive or similar action by any state or federal regulatory authority, (C) Common Stock Option Plan or other Common Equity Equivalent issued upon the conversion of convertible preferred or debt securities issued by Bancorp or its subsidiaries, and (D) any Common Stock or other Common Equity Equivalents issued in connection with a Change in Control as defined in Section 7(a). Additional Equity Awards shall be issued, if at all, at the "1993 Plan"same purchase price and on other terms per unit or share as the Common Stock or other Common Equity Equivalent issued by Bancorp, including term, vesting and forfeiture, with such vesting to occur in five annual installments of twenty percent (20%) per year, with the first such vesting to cover occur on the first anniversary of the date of actual grant of the Additional Equity Award. Notwithstanding the foregoing, any Additional Equity Awards (other than shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In purchased by Employee), shall terminate in accordance with the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of any Equity Award Agreement, stock purchase agreement, or other agreement executed in connection with such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference Additional Equity Award. Any inconsistency between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 this Agreement and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Equity Award Agreement or the Plan Option Letters, shall be resolved in favor of the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in Equity Award Agreement and the aggregate in respect of its obligations under this subparagraphPlan.

Stock Options. (a) As additional compensation for his services hereunderIn addition, in connection with entering into this Agreement, Executive shall be granted, subject to approval by the Corporation shall grant to Executive Board, an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 purchase 600,000 shares of the Corporation's Company’s common stock at (the “Initial Option”), which represents approximately two percent (2%) of the Fully Diluted Shares (as defined below) as of the Effective Date, with an exercise price per share equal to the closing sale price fair market value of a share of the Corporation's Company’s common stock as reported by the American Stock Exchange on the date hereofof grant (as determined by the Board in its sole discretion), provided that Executive is employed by the Company on the date of grant. Subject to Executive’s continued service with the terms Company through the applicable vesting date, 1/48th of such the total number of shares initially subject to the Initial Option will vest on each monthly anniversary of the Effective Date. As soon as reasonably practicable following the first anniversary of the Effective Date, Executive shall be granted, subject to approval by the Board, an option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 purchase that number of shares of Common Stockthe Company’s common stock (the “Second Option” and, together with the Initial Option, the “Options”) such that the Initial Option plus the Second Option are equivalent in total to approximately four percent (ii4%) one of the Fully Diluted Shares with an exercise price per share equal to the fair market value of a share of the Company’s common stock on the date of grant (as determined by the Board in its sole discretion), provided that Executive is employed by the Company as its Chief Executive Officer on the date of grant. Subject to Executive’s continued service with the Company through the applicable vesting date, 1/48th of the total number of shares initially subject to the Second Option will vest on each monthly anniversary of the applicable date of grant. The Options, and any shares acquired upon exercise, will be subject to the terms and conditions of the Company’s equity incentive plan and option letter agreement in agreements to be entered into between Executive and the form annexed as Exhibit "A-2" hereto Company. For the purposes of this Agreement, “Fully Diluted Shares” shall be calculated by adding ("Option Letter A-2"x) being exercisable for 150,000 the number of outstanding shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares capital stock of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan , plus (the "1993 Plan"y) to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the of Company common stock subject to issuance of under outstanding options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directorsor warrants, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or plus (z) by the Corporation by reason number of the Executive's disability or death prior unallocated shares of Company common stock reserved for issuance pursuant to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to ExecutiveCompany’s stock option plans, in each case in respect case, as of ordinary income, in effect at the time close of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to business day preceding the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess date of $250,000 in the aggregate in respect of its obligations under this subparagraphdetermination.

Stock Options. Options to purchase shares of Communications Stock (a"Communications Options") As additional compensation and shares of Media Stock ("Media Options") which are unexercised as of the Separation Time and which were issued pursuant to the terms of the Amended U S WEST 1994 Stock Plan, the U S WEST Media Group 1996 Stock Option Plan, the U S WEST Media Group 1997 Stock Option Plan and the U S WEST Communications Group 1997 Stock Option Plan (collectively the "Option Plans") shall be treated as follows: (1) New U S WEST shall assume the U S WEST Communications Group 1997 Stock Option Plan and all obligations under such plan. (2) MediaOne shall retain the U S WEST Media Group 1996 Stock Option Plan and the U S WEST Media Group 1997 Stock Option Plan and all obligations under such plans. (3) MediaOne shall retain the Amended U S WEST 1994 Stock Plan and all obligations with respect to Media Options under such plan. (4) New U S West shall establish a new stock plan to be effective as of the Separation Time and shall assume, under such plan, all obligations with respect to Communications Options issued under the Amended U S WEST 1994 Stock Plan. (5) Unexercised options issued under any of the Option Plans shall continue in effect for their original term subject to paragraph (6) below and the following adjustments to reflect the transactions contemplated by the Separation Agreement. (i) No Media Dividend shall be distributed with respect to any Media Options. However, in accordance with the following sentence, the number of Media Options held by any person shall be converted into a higher number of options to purchase shares of MediaOne Common Stock and the exercise price of each such option shall be decreased. The number of options shall be increased and the exercise price of each share under each option shall be decreased to reflect the Media Dividend in a manner consistent with Accounting Rule EITF 90-9 in order to preserve the economic value of the options. (ii) The Communications Options shall be converted to options to purchase shares of New U S WEST Common Stock on a one for one basis; the exercise price shall not change. (6) Vested options under any of the Option Plans shall be exercised on and after the Separation Time by an Employee by contacting the stock plan administrator for his services hereunderor her employer or former employer. New U S WEST and MediaOne each agrees to act as agent (the "crossover agent") for the other in the case of an exercise of an option by an Employee of the crossover agent under an Option Plan of the non-employing company. The crossover agent for the non-employing company shall, by itself and/or through its own third-party arrangements (i) effect an option exercise of the Corporation shall grant applicable shares; (ii) report such exercise to Executive the non-employing company on a timely basis, not to exceed 30 days after the exercise; (iii) collect from the Employee, and remit and/or report to the Employee and/or the appropriate tax authorities, as applicable, all taxes incurred by the crossover agent (as the employing company) resulting from the exercise of an option under the Corporationnon-employing company's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option and all taxes required to be evidenced by (i) one option letter agreement in withheld from the form annexed Employee's proceeds as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms a result of the exercise of such stock options (including without limitation, the period of exercisability of stock options an option under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside employing company's Option Plan; (iv) deliver the Plan having substantially stock to the same terms and provisions Employee or pay the Employee the excess of the Plan Stock Options. (d) In sales proceeds of the event that (i) applicable shares over the Corporation is sum of the exercise price and all taxes required to amend be withheld from the Plan Option Letters pursuant to Paragraph 5(c) or (ii) ExecutiveEmployee's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive proceeds as a result of the exercise; and (v) pay the non-employing company an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior amount equal to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect price of such exercise (option on a timely basis, not to exceed 30 days after the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal non-employing company agrees to honor the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid separation policies adopted by the Corporation within ninety crossover agent (90or its subsidiaries) days for purposes of determining if a separated Employee is eligible to exercise an option under the non-employing company's Option Plan. New U S WEST and MediaOne shall agree on the treatment of options exercised by Terminated Employees after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphSeparation Time.

Stock Options. (a) As additional compensation for his services hereunderSubject to the recommendation of the Compensation Committee and approval by a majority of the disinterested members of the Board of Directors, effective as of the date of this Agreement, the Corporation Company shall make a one-time grant to Executive an option under the Corporation's 1993 Stock Option Plan (the "PlanInitial Grant") of stock options (the "Options") to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal Executive to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option purchase up to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 1,000,000 shares of Common Stock, and commencing on the anniversary date of this Agreement and continuing for each year thereafter during the Term, Executive shall be eligible to receive a grant of Options (the "Subsequent Grant") to purchase up to 500,000 shares of Common Stock. Such Subsequent Grants shall be made subject to the recommendation of the Compensation Committee and approval by a majority of the disinterested directors of the Board of Directors. The per share exercise price of the Initial Grant Options shall be equal to $3.31, which amount is equal to 5 % over the fair market value of the Initial Grant Options on the date such Initial Grant Options were granted. The per share exercise price of the Subsequent Grant Options shall equal the fair market value of the Subsequent Grant Options on the date such Subsequent Grant Options are granted. The Options shall vest and become exercisable at the rate of 20% per year on each of the first five anniversaries of the date of grant and the Options shall have a term of ten (10) years from the date of grant. Agreements evidencing such options shall provide that the Options may be exercised by giving written notice of exercise to the Company specifying the number of shares to be purchased, accompanied by payment in full of the aggregate option price by delivery of (i) cash or cash equivalents, (ii) one option letter agreement an executed irrevocable exercise notice to the Company to withhold from the number of shares to be purchased as set forth in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 notice of exercise that number of shares of Common Stock and (iii) one having a fair market value equal to the aggregate option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares price of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments be purchased. The agreements shall also provide that, subject to the Plan specifically confirming unanimous approval by the right disinterested directors of the Corporation's Board of Directors, the Company may make loans available to Executive in the issuance of stock options under the Plan, to determine provisions regarding terms of connection with the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions outstanding Options. The principal amount of the Plan Stock Options. (d) In the event that loan will be due and payable (i) in a lump sum at the Corporation is required to amend end of the Plan Option Letters pursuant to Paragraph 5(c) 2-year period following the exercise date or (ii) Executive's employment by upon the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason earlier sale of the Executive's disability or death prior Option stock on a pro-rata basis, and will be with recourse against Executive with respect to the expiration of the options evidenced by the Plan Option Letters principal and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise)interest. In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed The loan will bear interest at the highest marginal applicable federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphrate.

Stock Options. As further compensation, and in addition to the stock options that were issued to the Executive pursuant to the August 2000 Agreement (which shall remain outstanding and shall be and become exerciseable in accordance with their terms), the Company is granting to the Executive new options to purchase additional shares of common stock of the Company (the "New Options") as follows: (a) As additional compensation for his services hereunderAll of the New Options shall be deemed granted and issued (and are hereby so granted) on the Amendment Date, provided that this grant and issuance, and the Corporation shall grant effectiveness of the New Options, are subject to Executive an option under approval by the Corporation's 1993 shareholders of the Company, on or before July 31, 2002, of the Nastech Pharmaceutical Company, Inc. 2002 Stock Option Plan (the "Option Plan") to acquire a total of 400,000 shares of ), which has been approved and adopted by the Corporation's common stock at an exercise price per share equal Board. The New Options are issued under and pursuant to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")Plan. (b) The New Options shall have a term of 10 years, running from the Amendment Date. (c) Among the New Options, options for the maximum permissible number of shares shall be Incentive Stock Options ("ISOs") for purposes of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (together, the "Tax Laws"), and those ISOs are issued with the minimum per-share exercise price consistent with tax-advantaged treatment of those options as ISOs under the Tax Laws. Those ISOs shall be among the New Options referred to in each of the clauses "i," "ii," "iii," "iv," and "v" in paragraph "f" below in this Section 5, with the numbers of shares for which such ISOs will be exerciseable under each of those clauses being determined in such a manner as to maximize the total number of shares as to which such tax advantaged treatment is available; and the ISOs shall vest and become first exerciseable at the times and under the conditions provided in those clauses respectively. (d) The remainder of the New Options shall be non-statutory stock options and shall be issued with a per-share exercise price equal to the per share closing price of common stock of the Company represents on the Nasdaq National Market on the Amendment Date except that those referred to in clause "v" of paragraph "f" of this Section 5, which will vest (if at all), only on January 1, 2006, shall have an exercise price of Twenty-Five Dollars ($25.00) per share. (e) The exercise prices of the New Options and warrants the numbers of shares that there are sufficient may be purchased upon exercise of the New Options shall be subject to customary anti-dilution adjustments. (f) The New Options, in the aggregate, shall grant the right to purchase a total of nine hundred thousand (900,000) shares of Common Stock currently available under common stock of the Company, and they shall vest and become exerciseable on the dates set forth in the following clauses (or as expressly stated elsewhere in this Agreement in the event of certain circumstances and events provided for herein): (i) New Options for 200,000 shares (some of which shall be ISOs and some of which shall be non-statutory stock options, as provided above) are vested and exerciseable as of the Amendment Date; (ii) New Options for another 200,000 shares (some of which shall be ISOs and some of which shall be non-statutory stock options, as provided above) shall vest and become exerciseable if Executive's employment by the Company or by an affiliate of the Company continues on August 8, 2003; (iii) New Options for another 200,000 shares (some of which shall be ISOs and some of which shall be non-statutory stock options, as provided above) shall vest and become exerciseable if Executive's employment by the Company or by an affiliate of the Company continues on August 8, 2004; (iv) New Options for another 200,000 shares (some of which shall be ISOs and some of which shall be non-statutory stock options, as provided above) shall vest and become exerciseable if Executive's employment by the Company or by an affiliate of the Company continues on August 8, 2005; (v) New Options for another 100,000 shares (some of which shall be ISOs and some of which shall be non-statutory stock options, as provided above) shall vest and become exerciseable on January 1, 2006 if (A) Executive's employment by the Company or by an affiliate of the Company continues on December 31, 2005 and (B) on or before December 31, 2005, the Company and the Executive shall have agreed in writing to continue the employment of Executive by the Company or by an affiliate of the Company on a substantially full time basis (and on such other terms as they may agree) until at least December 31, 2007. (g) Except for those that are ISOs as described above, the New Options shall be transferable by Executive to a trust for the benefit of Executive and/or member(s) of his immediate family and/or to a partnership, limited liability company, and/or other entity owned by Executive and/or by member(s) of his immediate family. The terms of the New Options shall include customary provisions for, among other things, the ability of the Executive, if he so chooses, (A) to pay the exercise price for the options via a same-day-sale exercise arrangement and/or a margin account exercise arrangement with a broker-dealer or bank and/or loan or deferral arrangements with the Company and/or (B) to surrender shares (either previously outstanding shares or shares being purchased by exercise of options) to the Company at fair market value for payment of the minimum amount required to satisfy all withholding requirements and/or to pay all or a part of the exercise price by surrender to the Company, at fair market value, of shares of the Company's 1993 Stock Option Plan common stock that shall then have been owned for at least six months by Executive and/or by a trust, partnership, limited liability company, or other entity for the benefit of, or owned by, Executive and/or member(s) of his immediate family. (the "1993 Plan"h) to cover the The shares of Common Stock issuable to Executive upon the exercise of Option Letter A-1. (c) In the event that New Options shall be fully vested in the Company's stockholders fail at the next annual meeting of stockholders hands of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all Executive immediately upon such exercise and issuance. The Company shall cause the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options New Options to be registered under the Plan upon termination Securities Act of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation 1933 within ninety (90) days after any the Amendment Date pursuant to a Form S-8 or such exercise. Notwithstanding anything other form as may be available for such purpose; and the Company shall use its best efforts to maintain such registration, or a substantially similar registration, in effect for such shares and to maintain the similar registration of the shares of Common Stock issuable under the options issued to the contrary in this Agreement or Executive pursuant to the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphAugust 2000 Agreement.

Stock Options. (a) As additional compensation for his services hereunderAt the Effective Time, the Corporation shall grant to Executive an each option granted by OSB under the Corporation's 1993 terms of the OSB Financial Corp. 1992 Stock Option and Incentive Plan (the "OSB Option Plan") to acquire a total of 400,000 purchase shares of the Corporation's common stock OSB Common Stock which is outstanding and unexercised immediately prior thereto shall cease to represent a right to acquire shares of OSB Common Stock and shall be converted automatically into an option to purchase shares of FCB Common Stock in an amount and at an exercise price per share equal determined pursuant to paragraph (c) of this Section 1.5 (the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof"Converted Option"), with subject to the terms of the OSB Option Plan and the agreements evidencing grants of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")options thereunder. (b) The Company represents From and warrants that there are sufficient shares after the Effective Time, FCB shall assume any and all obligations of Common Stock currently available OSB under the Company's 1993 Stock OSB Option Plan, and the OSB Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1shall remain in effect. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing The number of shares of FCB Common Stock to be subject to each Converted Option shall be equal to the product of the number of shares available for of OSB Common Stock subject to the issuance of options under original option and the Plan to an amount at least sufficient to cover all the OSB Exchange Ratio, PROVIDED that any fractional shares of FCB Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B resulting from such multiplication shall be rounded up to the nearest whole share; and (ii) appropriate amendments the exercise price per share of FCB Common Stock under the Converted Option shall be equal to the Plan specifically confirming the right exercise price per share of the Corporation's Board of Directors, in the issuance of stock options OSB Common Stock under the Planoriginal option divided by the OSB Exchange Ratio, PROVIDED that such exercise price shall be rounded down to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Optionsnearest whole cent. (d) In The Committee of the event that (i) OSB Board of Directors which administers the Corporation is required to amend OSB Option Plan has approved the Plan Option Letters foregoing adjustments pursuant to Paragraph 5(cSection 12(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior OSB Option Plan and has not and will not authorize cash payments to be made for options under the expiration of the options evidenced by the OSB Option Plan Option Letters and Executive is required after such event pursuant to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exerciseSection 12(b). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. (a) As additional compensation for his services hereunderOn or prior to the Effective Time, the Corporation shall grant Company will use its reasonable best efforts to Executive an option cause holders of options to purchase Company Common Shares (a "Stock Option") outstanding under the CorporationCompany's 1995 Long Term Stock Incentive Plan, the Company's 1998 Non-Officer Long Term Stock Incentive Plan, the Company's 1991 Management Stock Option Plan, the Company's 1998 Directors' Stock Incentive Plan, the Company's 1993 Management Incentive Stock Option Plan, the Company's 1993 Non-Employee Director Stock Option Plan, the Company's 1995 Director Stock Incentive Plan, the Char▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇ck Option Plan, the Robe▇▇ ▇. ▇▇▇▇ ▇▇▇ck Option Plan and the Thom▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇ck Option Plan (the "PlanCompany Stock Option Plans") or pursuant to acquire a total any other stock option plan or agreement entered into by the Company with any employee of 400,000 shares or consultant to the Company or any subsidiary thereof listed on Section 2.11(c) of the Corporation's common stock at Company Disclosure Schedule, whether or not then exercisable, to enter into an agreement to cancel such Stock Options in exchange for an amount in cash equal to the product of (i) the number of Company Common Shares previously subject to such Stock Option multiplied by (ii) the excess, if any, of $6.50 over the exercise price per share equal of Company Common Shares previously subject to such Stock Option less applicable withholding taxes. Notwithstanding anything contained in this Agreement to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereofcontrary, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of options to purchase Company Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available Shares granted under the Company's 1993 1998 Stock Option Plan for ATU Represented Drivers and Mechanics (the "1993 ATU Option Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, will be treated in the issuance of stock options under Merger in the Plan, to determine provisions regarding terms of manner provided in the exercise of such stock options (including without limitation, the period of exercisability of stock options under the ATU Option Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable Company shall not be obligated to Executive, in each case in respect use its reasonable best efforts to seek to cause a holder of ordinary income, in effect at the time a Stock Option having an exercise price of such exercise. Such amount shall be paid more than $6.50 to enter into an agreement as contemplated by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphSection 4.9.

Stock Options. (a) As additional compensation for his services hereunderOn the date of employment, the Corporation Employee shall grant be granted a nonqualified stock option pursuant to Executive an option under the Corporation's 1993 Stock Option Employer s Amended and Restated 1994 Equity Participation Plan (the "Plan") to acquire purchase 100,000 shares of common stock in Strouds, Inc. (the Common Stock ) with an exercise price equal to the fair market value of the Common Stock on such date. In addition, on the date of employment, Employee shall be granted a total of 400,000 nonqualified stock option under the Plan to purchase an additional 200,000 shares of the Corporation's common stock at Common Stock with an exercise price per share equal to the closing sale price fair market value of the Corporation's common stock as reported by Common Stock on such date subject to approval of an amendment to Employer s Plan to be presented to Employer s shareholders at the American Stock Exchange on 1998 annual meeting allowing for the date hereof, with the terms grant of such option to be evidenced by (i) one option letter agreement in additional options under the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")Plan. (b) The Company represents and warrants that there are sufficient At the time of payment of a cash bonus, if any, to Employee for fiscal 1997 as provided in paragraph 7(a), Employee shall be granted a nonqualified stock option under the Plan to purchase an additional 50,000 shares of the Common Stock currently available if, and only if, Strouds, Inc. achieves an Adjusted Net Income (Loss) of ($2,700,000.00) or less for fiscal 1997. In addition, if Strouds, Inc. incurs an Adjusted Net Income (Loss) of less than ($2,700,000.00) for fiscal 1997, Employee shall be granted an additional nonqualified stock option under the Company's 1993 Plan to purchase 10,000 shares of the Common Stock Option (up to a maximum of 50,000 shares) for every 1/2 of 1% by which the Adjusted Net Income (Loss) is less than ($2,700,000.00) with an exercise price equal to the fair market value of the Common Stock on the date of grant. In the event that Strouds, Inc. does not achieve a ($2,700,000.00) Adjusted Net Income (Loss) or less for fiscal 1997, the Board of Directors (or the Compensation Committee established under the Plan) may nonetheless grant additional stock options under the Plan (up to a maximum of 50,000 shares) if it determines, in its sole discretion, that it is nonetheless appropriate to make such grant upon review of all the "1993 Plan"circumstances leading to the fiscal result for the year and the margin by which the financial goal of a ($2,700,000.00) to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1Adjusted Net Income (Loss) was not attained. (c) In At the event that the Company's stockholders fail at the next annual meeting time of stockholders payment of the Corporation a cash bonus, if any, to approve both (i) an amendment increasing the number of shares available Employee for the issuance of options fiscal year 1998 as provided in paragraph 7(b), Employee shall be granted a nonqualified stock option under the Plan to purchase an additional 50,000 shares of the Common Stock if, and only if, Strouds, Inc. achieves an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and Adjusted Net Income (iiLoss) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied its Financial Plan approved by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.the

Stock Options. (a) As additional compensation for his services hereunderDuring the Employment Period, Key Employee shall, subject to the Corporation shall grant approval thereof by the Board or an appropriate committee thereof, of options to Executive purchase 100,000 shares of Employer common stock. Of such total, an option under for the Corporationpurchase of 25,000 shares (the "Non-Plan Option") shall be submitted for Board approval (outside of Employer's 1993 1990 Stock Option Plan (for employees; such plan, as amended from time to time, the "Option Plan")) to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price of $15.063 per share (representing the closing market price for the common stock for the last trading day prior to the Effective Date), to be exercisable in full immediately upon grant, expiring on the fifth (5th) anniversary of the Board's approval of the grant, and otherwise subject to the same terms and conditions as are applicable to stock options granted under the Option Plan. The remaining 75,000 options shall be submitted for approval under the Option Plan in one or more installments as shares become available therefor, and each grant toward that balance shall, in accordance with the standard terms of grants under the Option Plan, be at an exercise price equal to the closing sale market price of for the Corporation's common stock as reported by for the American Stock Exchange last trading day prior to the date of such grant, becoming exercisable in three (3) equal annual installments on the date hereoffirst three (3) anniversaries of such grant, with expiring on the eighth (8th) anniversary of such grant and otherwise subject to the terms of the Option Plan. Key Employee shall be further eligible during the Employment Period for additional stock options and other awards and benefits pursuant to such employee stock option and other stock-based employee benefit plans as Employer may maintain from time to time during the Employment Period with respect to its key employees of like stature and compensation, in such amounts as may be determined by the Board in its discretion based upon the recommendation of the Chief Executive Officer. In the event that, during the Employment Period, Key Employee is re-assigned by Employer to a position carrying duties and responsibilities of lesser stature than his present position as recited in paragraph 2(a) or such position in which Key Employee serves as of the time that any such options or other rights or benefits are hereafter granted or awarded to or otherwise received by Key Employee during the Employment Period (other than a re-assignment occurring as the result of or in connection with any change in control of Employer, in which case the provisions of the governing benefit plan, or any other written agreement between Telxon and Employee, applicable in such a circumstance shall control), such options, rights and benefits shall, to the extent unvested as of the time of such re- assignment, be subject to such reduction, cancellation and/or forfeiture as may then be determined to be evidenced appropriate by (i) one option letter agreement the Board in its discretion. i. Key Employee makes the form annexed as Exhibit "A" hereto ("following representations, warranties, acknowledgements and agreements to Employer with respect to Non-Plan Option Letter A-1") being exercisable for 100,000 and the shares of Common Stock, (ii) one option letter agreement in Employer common stock which may be acquired through the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan exercise thereof (the "1993 PlanNon-Plan Shares") prior to: (A) Key Employee understands that the Non-Plan Shares have not been registered under the Securities Act of 1933, as amended (the "Securities Act") or any state securities laws; (B) The Non-Plan Shares are being offered and will be sold pursuant to cover exemptions from registration contained in the shares Securities Act and applicable state securities laws based in part upon Key Employee's representations contained in this paragraph 3(d)(i); (C) Key Employee has had the opportunity to its satisfaction to review Employer's quarterly and annual reports to and other filings with the United States Securities and Exchange Commission (the "SEC") and to ask questions of Common Stock issuable to Executive upon and receive answers from Employer's management regarding the business, assets, financial condition, prospects and affairs of Employer; (D) Key Employee is an "accredited investor" (as such term is defined in Rule 501 under the Securities Act) and has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of his investment in the Shares and of protecting his interests in connection with such investment; (E) Key Employee is not aware of the publication of any advertisement in connection with the Non-Plan Option or the Non-Plan Shares; (F) Any Non-Plan Shares which Key Employee may acquire through exercise of the Non-Plan Option Letter A-1.will be for his own account for investment only, and not with a view toward their distribution, that he bear a total loss of the investment without materially impairing his financial condition, and will be able to bear the economic risk of the investment indefinitely; and (cG) In Key Employee understands that he cannot resell the event that Non-Plan Shares unless and until the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options Non-Plan Shares are registered under the Securities Act and/or applicable state securities laws or an exemption from such registration is available and that any certificate evidencing Non-Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising Shares upon any exercise of options evidenced by the Non-Plan Option Lettersprior to the registration thereof provided for in paragraph 3(d)(ii) below will be legended regarding the absence of and necessity for such registration and that there is no assurance that any registration exemption will be available or that, if available, such exemption will allow Key Employee to transfer all or any portion of the Corporation Non-Plan Shares he may subsequently desire to transfer. It shall be a condition of any exercise of the Non-Plan Option prior to the registration thereof provided for in paragraph 3(d)(ii) below that the representations and warranties contained in this paragraph 3(d)(i) shall be true in all material respects on and as of the date of any exercise of the Non-Plan Option with the same force and effect as though such representations and warranties had been made on and as of such exercise date. Upon request of Key Employee with respect to any such exercise of the Non-Plan Option as he may contemplate, Employer agrees to reimburse Executive make available to Key Employee copy's of Employer's quarterly and annual reports to and other filings with the difference between SEC and to afford him the opportunity to his satisfaction to ask questions of and receive answers from Employer's management regarding the business, assets, financial condition, prospects and affairs of Employer. ii. Employer agrees to use its reasonable best efforts, (A) if Employer becomes eligible to utilize Form S-8 for the amount registration of Income Taxes Executive would have been required securities under the Securities Act prior to pay had the income recognized exercise of the Promotion Option and Form S-8 may properly be utilized for registration of the Non-Plan Shares, to register the Non-Plan Shares on such exercise been treated as a long term capital gain and form, or (B) in the amount event that Employer is ineligible to register the Non-Plan Shares on Form S-8 prior to Key Employee's exercise of Income Taxes payable by Executive the Non-Plan Option or such Form otherwise may not be utilized for the registration of the Non-Plan Shares, to register, upon Key Employee's request, the Non-Plan Shares for Key Employee as a selling stockholder on Form S-3 at or about the time that Employer effects the registration with the SEC of the Employer common stock issued in connection with the Employer's acquisition of the minority interests in its Metanetics Corporation subsidiary, or at any time thereafter as of which it may reasonably be expected that such registration would become effective prior to the Non-Plan Shares so acquired becoming eligible for resale in reliance upon SEC Rule 144. Key Employee agrees to cooperate in the effecting of, and to execute and deliver such representations, warranties and indemnifications customarily required of selling stockholders with respect to, such registration as Employer shall reasonably request. Employer shall bear all securities registration fees, fees and expenses of its counsel and accountants, and financial printers' and similar out-of-pocket costs incident to the preparation, filing and maintaining of the effectiveness of such exercise (registration but shall not be responsible for any brokerage, attorneys or other fees or expenses incurred by Key Employee in connection with the amount sale or other disposition of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Non-Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphShares.

Stock Options. The stock option agreements of each of the individuals on TogetherSoft’s management team provide that 75% of the unvested shares subject to each such individual’s stock options will vest upon the closing of the Mergers. In the event any such person is terminated as the result of an “involuntary termination” following the closing of the Mergers, the remaining unvested shares subject to any such option will immediately vest and become exercisable. In addition to the foregoing, the remaining unvested shares subject to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’▇ stock options will immediately vest and become Table of Contents exercisable in the event he voluntarily terminates his employment or in the event he is terminated without cause. Additionally, any continuing employee who is terminated without cause within 12 months following the closing of the Mergers will have his or her stock options vest (at a minimum) as to the number of shares that would have otherwise vested had such individual remained employed for at least four (4) weeks following such termination. TA Associates, Inc. and U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇, and their respective affiliates, together hold substantially all of the outstanding shares of TogetherSoft Series B Preferred Stock. The value of the Borland common stock issuable and cash payable in exchange for each share of TogetherSoft Series B Preferred Stock in Merger I is being increased to an amount greater than the liquidation preference for such shares of TogetherSoft Series B Preferred Stock as provided in TogetherSoft’s certificate of incorporation. As described in the third and fourth paragraphs under “Merger Consideration” on page 83, the Borland common stock issuable and cash payable to the TogetherSoft Series A Preferred Stock in connection with the Mergers will be reduced by an amount equal to the difference between the liquidation preference of TogetherSoft Series B Preferred Stock as provided in TogetherSoft’s certificate of incorporation before Merger I and the aggregate value of the Borland common stock issuable and cash payable to the holders of TogetherSoft Series B Preferred Stock in Merger I. The entire cost of this redistributed consideration will be borne by those holders of TogetherSoft Series A Preferred Stock who have agreed to bear such cost. U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ has provided an opinion concerning the fairness of the consideration issuable and payable in this transaction with respect to TogetherSoft stockholders. ▇▇▇▇ ▇▇▇▇▇▇▇ is a member of TogetherSoft’s board of directors and is a managing director of TA Associates, Inc., which is either the general partner or managing member of each of the following entities that hold TogetherSoft Series B Preferred Stock: TA IX, L.P., TA/Atlantic and Pacific IV, L.P., TA Investors LLC and TA Executives Fund LLC. These relationships and ownership interests may cause TA Associates’ and U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇’▇ interests to differ from the interests of TogetherSoft stockholders generally. Certain individuals currently or previously associated with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., TogetherSoft’s outside legal counsel, hold equity interests in TogetherSoft. As of September 30, 2002, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, an associate of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., held 4,591 shares of TogetherSoft Series B Preferred Stock. As of September 30, 2002, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, a retired partner of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C. and a current director and corporate secretary of TogetherSoft, held (a) As additional compensation for his services hereunder, the Corporation shall grant to Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 46,470 shares of the Corporation's common stock at an exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by TogetherSoft Series B Preferred Stock; (ib) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being TogetherSoft Warrants exercisable for 100,000 23,989 shares of Common Stock, TogetherSoft Series B Preferred Stock at $1.00 per share; and (iic) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being TogetherSoft Options exercisable for 150,000 shares of TogetherSoft Common Stock exercisable at $2.33 per share. As of September 30, 2002, WS Investment Company, LLC (2000), an entity affiliated with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., held 23,235 shares of TogetherSoft Series B Preferred Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being TogetherSoft Warrants exercisable for 150,000 11,994 shares of Common TogetherSoft Series B Preferred Stock (such option letters being referred at $1.00 per share. Table of Contents CALIFORNIA FAIRNESS HEARING The Mergers are subject to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares approval by the California Commissioner of Common Stock currently available under the Company's 1993 Stock Option Plan Corporations after a fairness hearing (the "1993 Plan"“Fairness Hearing”) to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail be held at the next annual meeting of stockholders offices of the Corporation to approve both California Department of Corporations located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ on January 7, 2003 at 11:00 a.m. (i) an amendment increasing Pacific Standard Time), where Borland and TogetherSoft will present information regarding their respective companies and the number anticipated effect of shares available the Mergers on their respective organizations. After considering ▇▇▇▇▇▇▇’▇ application for a permit authorizing the exchange of Borland securities for the outstanding securities of TogetherSoft and the information and views presented at the Fairness Hearing, the California Commissioner of Corporations will determine whether the terms and conditions of the Mergers are fair and if so, will issue a permit (the “Permit”), the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments which is a condition to the Plan specifically confirming the right consummation of the Corporation's Board of DirectorsMergers. If the Permit is issued, in the issuance of stock options Borland securities to security holders of TogetherSoft will be exempt from registration with the SEC under the Plan, to determine provisions regarding terms Section 3(a)(10) of the exercise of such stock options Act (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without causeas described below) and provisions regarding forfeiture of stock options under the Plan upon termination of employmentwill generally be freely tradable, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive except as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary noted in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphInformation Statement.

Stock Options. (a) As additional compensation for his services hereunderOn the Effective Time, the Corporation shall grant Blackbaud-SC hereby assigns, delegates and transfers to Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereofBlackbaud-DE, with the terms of such option to be evidenced by and Blackbaud-DE hereby assumes and continues: (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders all of the Corporation to approve both stock option plans of Blackbaud-SC (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directorsincluding, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions all of the Plan Stock Options. (drights, title, interests, remedies, powers, obligations and duties of Blackbaud-SC under such stock option plans) In in existence on the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for CauseEffective Time, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income outstanding and unexercised portions of all outstanding options to purchase Blackbaud-SC Common Stock (including, without limitation, all of the rights, title, interests, remedies, powers, obligations and duties of Blackbaud-SC under such stock options), whether granted under any such stock option plan or otherwise. The outstanding and unexercised portions of all options to purchase Blackbaud-SC Common Stock, including without limitation all options outstanding under the stock option plans of Blackbaud-SC and any other outstanding stock options shall, as of the Effective Time, become options to purchase the number of shares of Blackbaud-DE Common Stock equal to the number of shares of Blackbaud-SC Common Stock subject to such option (or the unexercised portion of such option) with no other changes to the terms or conditions thereof, unless such changes shall be required to maintain the tax rate applicable to Executivequalified status of incentive stock options under the Internal Revenue Code of 1986, as amended (the "CODE"). Consistent with the provisions of the Code and the regulations, Blackbaud-DE may, in each case in respect its discretion, grant new options to purchase shares of ordinary incomeBlackbaud-DE Common Stock under the continued stock plans or otherwise, in effect at the time stead of Blackbaud-SC Common Stock as if Blackbaud-DE had been the creator of the stock option plans and stock options of Blackbaud-SC, and Blackbaud-DE shall be substituted for and have all the obligations and liabilities of Blackbaud-SC under such continued stock plans and stock options. Subject to adjustment for any subsequent stock splits, stock dividends, combinations, recapitalizations or similar transactions, Blackbaud-DE Common Stock shall be substituted for Blackbaud-SC Common Stock on a 1-for-1 basis as to any options granted by Blackbaud-DE pursuant to the continued stock plans or otherwise subsequent to the Effective Time. It is the intention of the parties hereto that while the benefits of the stock option plans and stock options of Blackbaud-SC shall be preserved for the employees of Blackbaud-SC, the assumption of such exercise. Such amount stock option plans and the outstanding and unexercised portions of all options to purchase Blackbaud-SC Common Stock by Blackbaud-DE shall be paid by not confer any additional benefits on the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to holders of options granted under the contrary in this Agreement stock option plans or the Plan Option Lettersotherwise, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphwhether now outstanding or hereafter granted.

Stock Options. (ai) As additional compensation for his services hereunderAt the Effective Time, each outstanding option to purchase PageNet Shares (a "PageNet Option") under PageNet Stock Plans, and which has not vested prior to the Effective Time, shall become fully exercisable and vested as of the Effective Time. At the Effective Time, each PageNet Option shall be converted to an option to acquire, on the same terms and conditions as were applicable under such PageNet Option, the Corporation shall grant to Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total same number of 400,000 shares of Arch Common Stock as the Corporation's common stock holder of such PageNet Option would have been entitled to receive pursuant to the Merger had such holder exercised such PageNet 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 equal (rounded to the closing sale nearest whole cent) equal to: (y) the aggregate exercise price for PageNet Shares otherwise purchasable by such holder pursuant to such PageNet Option; divided by (z) the number of the Corporation's common stock as reported by the American full shares of Arch Common Stock Exchange on the date hereof, deemed purchasable pursuant to such PageNet Option in accordance with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, foregoing. (ii) one option letter agreement Notwithstanding the foregoing provisions, in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares case of Common Stock and (iii) one any option letter agreement in to which Code Section 421 applies, the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing price, the number of shares available for subject to such option, and the issuance terms and conditions of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitationoption shall be determined in order to comply with Code Section 424(a). As promptly as practicable after the Effective Time, Arch shall deliver to the period of exercisability of stock options under participants in PageNet Stock Plans appropriate notices setting forth such participants' rights pursuant to the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Substitute Options. (diii) In the event that (i) the Corporation is required With respect to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason each of the Executive's disability or death prior to the expiration directors and officers of PageNet identified in Section 6.11(a)(iii) of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax PageNet Disclosure Letter (collectivelyeach, a "Income TaxesSection 16 Person") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters), the Corporation agrees full Board of Directors of PageNet shall approve the disposition by each such Section 16 Person of the PageNet equity securities (including derivative securities) set forth next to reimburse Executive such Section 16 Person's name in Section 6.11(a)(iii) of the difference between PageNet Disclosure Letter and the full Board of Directors of Arch shall approve the acquisition by each such Section 16 Person of the Arch equity securities (Aincluding derivative securities) set forth next to such Section 16 Person's name in Section 6.11(a)(iii) of the amount PageNet Disclosure Letter. Each such approval shall specify, in the form set forth in Section 6.11(a)(iii) of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax DifferencePageNet Disclosure Letter, the amount material terms of taxes payable by Executive the derivative securities and each such approval shall be determined by assuming specify that the income recognized as a result approval is granted for purposes of such exercise is taxed at exempting the highest marginal federal and state income tax rates applicable to ordinary income. In addition, transaction under Rule 16b-3 under the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphExchange Act.

Stock Options. (a) As additional compensation for his services hereunder, the Corporation shall grant Any award of options to Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 purchase shares of the Corporation's common Company’s Common stock previously granted to you by the Board or the Compensation Committee of the Board prior to the date of this Agreement shall remain in full force and effect in accordance with the terms and conditions of the written award agreements between you and the Company governing each such award. (b) Subject to the approval of the Board (including a majority of the independent members of the Board) or the Compensation Committee of the Board, the Company will grant to you a non-qualified stock option (the “Option”) for the purchase of an aggregate of 30,000 shares of Common Stock of the Company (subject to appropriate adjustments for stock splits, stock dividends, combinations, recapitalizations and similar transactions affecting the Common Stock of the Company after the date hereof) at an exercise a price per share equal to the closing sale price of the Corporation's common stock as reported by Common Stock on the American Stock Exchange Nasdaq Global Market on the date hereofof grant, as an inducement material to you joining the Company, pursuant to Rule 5635(c)(4) of the Nasdaq Listed Company Manual. The Option shall be subject to all terms, vesting schedules and other provisions set forth in a separate option agreement. The Option will have a term of ten (10) years except as set forth in the stock option agreement and be subject to a vesting schedule of four (4) years, with the terms 25% of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares vesting on the first anniversary of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders your employment start date and 6.25% of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in vesting each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercisequarter thereafter. Notwithstanding anything to the contrary in this Agreement the stock option agreement, if a “Change in Control Event” (as defined on Exhibit A attached hereto) occurs and, within one (1) year of such Change in Control Event, your employment is terminated by the Company (or the Plan Option Lettersany successor) without “Cause” (as defined on Exhibit A) or by you for “Good Reason” (as defined on Exhibit A), the Corporation vesting schedule of the Option shall have no obligation be accelerated in full. You may be eligible to pay Executive any amount receive future stock options grants as the Board shall deem appropriate and in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphsole and absolute discretion.

Stock Options. (a) As additional compensation for his services hereunder, the Corporation shall grant to Executive an option under the Corporation's 1993 Stock Option Plan The parties agree that Employee (i) currently owns 199,998 shares of common stock of Company (the "PlanOwned Stock") and (ii) as of the Separation Date will hold vested options to acquire a total of 400,000 purchase an additional 998,630 shares of the Corporation's common stock at an exercise price per share equal of Company (the "Stock Options"), pursuant to various stock option plans (the closing sale price of the Corporation's common stock as reported "Option Plans") adopted by the American Stock Exchange on the date hereofCompany, with the terms of such any stock option agreements entered into pursuant to be evidenced by the option Plans (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1Agreements") being exercisable for 100,000 shares and the terms of Common Stockthe Employment Agreement dated December 28, 1995 between Company and Employee (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option LettersEmployment Agreement"). (b) The Company represents and warrants that there are sufficient Employee shall not sell or otherwise transfer or dispose of any shares of Common the Owned Stock currently available under and Stock Options for a period equal to the lesser of (1) completion of Company's 1993 Stock Option Plan next private placement of securities of five million dollars or more (a "Private Placement") or (2) one hundred eighty (180) days from the Separation Date (the "1993 PlanLock-Up Period"). As used in this paragraph 4(b), a Private Placement by the Company excludes any financing received by the Company as a result of (i) the Warrant Redemption by the Company which expires on April 19, 1999, and (ii) any agreement entered into with Fresenius AG and Fresenius Hemotechnology, Inc. Notwithstanding any terms of the Option Plans, Option Agreements or Employment Agreement, the exercise period of Employee's Stock Options shall be and is hereby extended such that such Stock Options may be exercised for a period of two (2) years after the Lock-Up Period (the "Exercise Period"); provided, that as requested by the Company or any representative of an underwriter of the Company, Employee agrees not to cover the sell or otherwise transfer or dispose of any shares of Common Owned Stock issuable or any Stock Options of the Company during such periods of time as the Company or such underwriters may request in order to Executive upon exercise facilitate any private or public offerings of Option Letter A-1securities by the Company during the Exercise Period. To the extent Employee is subject to any further lock-up periods during the two (2) year Exercise Period, the two (2) year Exercise Period shall be extended by the same number of days that Employee was subject to additional lock-ups, if any. Upon written request by Employee, a Company shall from time to time confirm in writing the commencement and expiration dates of any lock-up periods and the expiration date of the Exercise Period. (c) In Employee's registration rights (as set forth in the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of DirectorsEmployment Agreement and, if applicable, in the issuance of Option Plans and Option Agreements) in connection with her Owned Stock and any additional stock options under purchased pursuant to the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock OptionsOptions shall be preserved. (d) In Employee expressly acknowledges that, by virtue of the event extension of the exercise period, any of her Stock Options originally granted as incentive stock options will no longer be treated as such, but instead will be treated for tax purposes as if they were non-qualified stock options. Employee also acknowledges that an extension of time to exercise may be considered a "purchase" under Section 16 of the Securities Exchange Act of 1934, as amended. (ie) Except as provided herein, Employee understands and agrees that all vesting under any stock compensation award (e.g., incentive stock option, non-qualified stock option, stock purchase agreement, or restricted stock bonus agreement) from the Corporation is required Company shall cease upon the separation Date. (f) Company agrees to amend the Plan Option Letters cooperate with Employee from time to time in effectuating cashless exercises of her Stock Options pursuant to Paragraph 5(c) or (ii) Executive's employment a program developed under Regulation T as promulgated by the Corporation is terminated (x) by the Corporation for any reason other than for CauseFederal Reserve Board, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced extent permitted by the Plan Option Letters law and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising extent Company cooperates with its then current employees in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagrapheffectuating similar transactions.

Stock Options. (a) As additional compensation for his services hereunderSubject to applicable stockholder approval, the Corporation Employee shall grant be entitled to Executive an option receive stock options, issued under the Corporation's 1993 2003 Stock Incentive Plan and pursuant to Stock Option Plan (Agreements substantially in the "Plan") form attached hereto as Exhibit A, to acquire a total of 400,000 purchase shares of the Corporation's common stock at an a per share exercise price per share equal to the closing sale price market value of such stock as determined by the Board on the date of grant as follows: (A) as soon as practicable following the date hereof a stock option shall be granted to the Employee to purchase 150,454 shares of the Corporation's common stock, which is equal to two percent (2%) of the Corporation's outstanding equity securities on a fully-diluted basis as of the date hereof (assuming conversion of all outstanding shares of preferred stock and exercise of all outstanding warrants and options) (the "Signing Option Shares"), which shall vest as follows: the option to purchase up to 50% of the Signing Option Shares shall vest immediately upon issuance of the stock option and the option to purchase the remaining 50% of the Signing Option Shares shall vest quarterly in four (4) equal installments over a one year period commencing on the Effective Date; (B) as soon as practicable following the date hereof a stock option shall be granted to the Employee to purchase 13,053 shares of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being shares collectively referred to collectively herein as the "Plan January Option LettersShares")., which shall vest as follows: the option to purchase up to 50% of the January Option Shares shall vest immediately upon issuance of the stock option and the option to purchase the remaining 50% of the January Option Shares shall vest quarterly in four (4) equal installments over a one year period commencing on the Effective Date; and (bC) The Company represents and warrants as soon as practicable following the date hereof a stock option shall be granted to the Employee to purchase up to that there are sufficient number of shares of Common Stock currently available under the CompanyCorporation's 1993 Stock common stock which, when combined with the Signing Option Plan Shares and the January Option Shares, will be equal to four percent (4%) of the Corporation's outstanding equity securities on a fully-diluted basis (as described above) calculated as of the date on which FDA Approval (as hereinafter defined) is obtained (the "1993 PlanApproval Option Shares") which shall vest as follows: the option to cover the shares of Common Stock issuable purchase up to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders 50% of the Approval Option Shares shall vest immediately upon FDA Approval and the option to purchase the remaining 50% of the Approval Option Shares shall vest quarterly in four (4) equal installments over a one year period commencing on the date on which FDA Approval is obtained. For purposes hereof, the term "FDA Approval" shall mean receipt by the Corporation of written approval from the United States Food and Drug Administration without limitations or exceptions of the Corporation's MelaFind(TM) modular PreMarket Approval Application ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. The Corporation shall use its best efforts to approve both (i) obtain stockholder approval of an amendment increasing increase in the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of common stock for which options may be issued under the Plan, to determine provisions regarding terms of the exercise of such its stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation option plans within ninety (90) 90 days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphEffective Date.

Stock Options. (a) As additional compensation Each grantee under any of the MII Legacy Equity Plans (i) who is a B&W Legacy Award Holder or will be a B&W Employee, or who will not be a B&W Employee but will serve on the board of directors of B&W and not on the board of directors of MII immediately after the Distribution Date, and (ii) who holds as of the Distribution Date, one or more MII Options, shall receive, as a replacement award in substitution for his services hereundereach such MII Option (which shall be cancelled), the Corporation shall grant to Executive an option to purchase a number of shares of B&W Common Stock under the Corporation's 1993 Stock Option B&W New Equity Plan (a “Replacement B&W Option”) having a value (calculated using the "Plan"Post-Distribution B&W Share Price) to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale value of the MII Common Stock subject to the MII Option (calculated using the Pre-Distribution MII Share Price), as calculated pursuant to the following provisions. The number of shares of B&W Common Stock subject to a Replacement B&W Option shall be equal to the product of (i) the number of shares of MII Common Stock subject to an MII Option as of the Distribution Date and (ii) a fraction, the numerator of which is the Pre-Distribution MII Share Price and the denominator of which is the Post-Distribution MII Share Price. Each such Replacement B&W Option shall have the same comparative ratio of the exercise price to the Post-Distribution B&W Share Price as the exercise price of each MII Option to the Corporation's common stock Pre-Distribution MII Share Price. B&W shall be responsible for (i) the satisfaction of all tax reporting and withholding requirements in respect of the exercise of Replacement B&W 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 B&W Options shall not be exercisable until the Registration Statement Effectiveness Date. Except as reported by provided in the American Stock Exchange foregoing provisions of this Section 3.4(a), Replacement B&W Options granted under this Section 3.4(a) shall be granted on the date hereof, terms which are in all material respects identical (including with respect to vesting) to the terms of such option the MII Options with respect to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")which they replace. (b) The Company represents Each grantee under any of the MII Legacy Equity Plans (i) who is an MII Legacy Award Holder or will be a ▇▇▇▇▇▇▇▇▇ Employee, or who will not be a ▇▇▇▇▇▇▇▇▇ Employee but will serve on the board of directors of MII and warrants that there are sufficient not on the board of directors of B&W immediately after the Distribution Date, and (ii) who will hold one or more MII Options as of the Distribution Date, shall receive, in substitution for each such MII Option (which shall be cancelled), an option to purchase shares of MII Common Stock currently available under one of the Company's 1993 Stock Option Plan MII Legacy Equity Plans (a “Post-Distribution MII Option”) having a value (calculated using the "1993 Plan"Post-Distribution MII Share Price) equal to cover the value of the shares of MII Common Stock issuable subject to Executive upon the MII Option (calculated using the Pre-Distribution MII Share Price), as calculated pursuant to the following provisions. The number of shares of MII Common Stock subject to a Post-Distribution MII Option shall be equal to the product of (i) the number of shares of MII Common Stock subject to an MII Option as of the Distribution Date and (ii) a fraction, the numerator of which is the Pre-Distribution MII Share Price and the denominator of which is the Post-Distribution B&W Share Price. Each such Post-Distribution MII Option shall have the same comparative ratio of the exercise price to the Post-Distribution MII Share Price as the exercise price of each MII Option to the Pre-Distribution MII Share Price. MII (or one or more of the MII Subsidiaries, as designated by MII) shall be responsible for (i) the satisfaction of all tax reporting and withholding requirements in respect of the exercise of Option Letter A-1Post-Distribution MII 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 MII Options shall be granted on terms which are in all material respects identical (including with respect to vesting) to the terms of the MII Options with respect to which they are substituted. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders Each grantee under any of the Corporation to approve both MII Legacy Equity Plans (i) who is a Former B&W Officer, or who will serve on the board of directors of both MII and B&W immediately after the Distribution Date, and (ii) who will hold one or more MII Options as of the Distribution Date shall receive, in substitution for each such MII Option (which shall be cancelled), both a Replacement B&W Option with respect to shares of B&W Common Stock and a Post-Distribution MII Option with respect to shares of MII Common Stock, with such shares of B&W Common Stock and MII Common Stock having an amendment increasing aggregate value (calculated using the Post-Distribution MII Share Price and the Post-Distribution B&W Share Price) equal to the value of the shares of MII Common Stock subject to the MII Option (calculated using the Pre-Distribution MII Share Price), as calculated pursuant to the following provisions. In each case, the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of MII Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments subject to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Post-Distribution MII Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that multiplying the income recognized as a result aggregate fair market value of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal number of shares of MII Common Stock subject to the Tax Difference arising in respect of such exercise multiplied MII Option using the Pre-Distribution MII Share Price by a fraction, the numerator of which is 1 the Post-Distribution MII Share Price and the denominator of which is equal the Post-Distribution MII Share Price plus the Post-Distribution B&W Share Price. In each case, the number of shares of B&W Common Stock subject to 1 minus the Replacement B&W Option shall be determined by multiplying the fair market value of the number of shares of MII Common Stock subject to the MII Option using the Pre-Distribution MII Share Price by a fraction the numerator of which is the Post-Distribution B&W Share Price and the denominator of which is the Post-Distribution MII Share Price plus the Post-Distribution B&W Share Price. Each of the Replacement B&W Options and the Post-Distribution MII Options shall have the same comparative ratio of the exercise price to the Post-Distribution B&W Share Price and Post-Distribution MII Share Price, respectively, as the exercise price of the MII Option being replaced to the Pre-Distribution MII Share Price. MII (or one or more of the MII Subsidiaries, as designated by MII) shall be responsible for (i) the highest marginal federal income satisfaction of all tax rate (currently 39.6%reporting and withholding requirements in respect of the exercise of Post-Distribution MII Options issued in accordance with this Section 3.4(c) and (ii) remitting the highest marginal state income appropriate tax rate applicable or withholding amounts to Executive, in each case the appropriate taxing authorities. Replacement B&W Options shall not be exercisable until the Registration Statement Effectiveness Date. B&W shall be responsible for (i) the satisfaction of all tax reporting and withholding requirements in respect of ordinary incomethe exercise of Replacement B&W Options issued in accordance with this Section 3.4(c) 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(c), in effect at the time of such exercise. Such amount Replacement B&W Options and Post-Distribution MII Options shall be paid by the Corporation within ninety granted on such terms which are in all material respects identical (90including with respect to vesting) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or terms of the Plan Option Letters, the Corporation shall have no obligation MII Options with respect to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphwhich they are granted.

Stock Options. (a) As additional compensation for his services hereunderImmediately prior to the Effective Time, the Corporation shall grant Company will cause each option granted by the Company to Executive an option under purchase shares of Company Common Stock pursuant to the Corporation's 1993 Company’s 1983 Incentive Stock Option Plan, as amended, the Company’s 1995 Stock Option Plan, the Company’s 1999 Employee Stock Option Plan, the Company’s 1999 Stock Option Plan for Non-Employee Directors, the Patapsco Valley Bancshares, Inc. (“PVBI”) Incentive Stock Option Plan, the PVBI Director’s Stock Option Plan, the PVBI Employee Stock Purchase Plan, the Monocacy Bancshares, Inc. (“MBI”) 1994 Stock Incentive Plan, and the MBI 1997 Independent Directors’ Stock Option Plan (collectively, the "Plan") “Company Option Plans”), (each a “Company Option”), which is then outstanding and unexercised to become fully vested and, at the Effective Time, each such fully-vested Company Option shall cease to represent a right to acquire a total of 400,000 shares of the Corporation's common stock Company Common Stock and shall be converted automatically into a fully-vested option to purchase shares of Parent Common Stock (a “Parent Option”) in an amount and at an exercise price per share determined as provided below (and otherwise subject to the terms of the Company Option Plan, under which such Company Option was granted, the agreements evidencing grants thereunder and any other agreements between the Company and an optionee regarding Company Options): (1) the number of shares of Parent Common Stock to be subject to the new option shall be equal to the closing sale price product of the Corporation's common stock as reported number of shares of Company Common Stock subject to the original option and the Exchange Ratio, provided that any fractional shares of Parent Common Stock resulting from such multiplication shall be rounded down to the nearest whole share; and (2) the exercise price per share of Parent Common Stock under the new option shall be equal to the exercise price per share of Company Common Stock under the original option divided by the American Stock Exchange on Ratio, provided that such exercise price shall be rounded up to the date hereofnearest cent. (3) notwithstanding anything else contained in this Section 1.6(a), with it is the terms intention of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares parties that the assumption of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Company Common Stock hereunder shall meet the requirements of Section 424(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and that each Parent Option shall qualify immediately after the Effective Time as an incentive stock option (iiias defined in Section 422 of the Code) one option letter agreement in to the form annexed as Exhibit "B" hereto ("extent the related Company Option Letter B"so qualified immediately before the Effective Time, and the foregoing provisions of this Section 1.6(a) being exercisable for 150,000 shares of Common Stock (shall be interpreted to further such option letters being referred to collectively herein as the "Plan Option Letters")purpose and intention. (b) The Company represents and warrants that there are sufficient Prior to the Effective Time, Parent shall reserve for issuance the number of shares of Parent Common Stock currently available necessary to satisfy Parent’s obligations under this Section 1.6. Promptly after the Effective Time (but in no event later than ten business days thereafter), Parent shall file with the Securities and Exchange Commission (the “SEC”) a registration statement on an appropriate form under the Company's 1993 Stock Option Plan Securities Act of 1933, as amended (the "1993 Plan") “Securities Act”), with respect to cover the shares of Parent Common Stock issuable subject to Executive upon exercise options to acquire Parent Common Stock issued pursuant to Section 1.6(a) hereof, and shall use its best efforts to maintain the current status of Option Letter A-1the prospectus contained therein, as well as comply with applicable state securities or “blue sky” laws, for so long as such options remain outstanding. (c) In Prior to the event that Effective Time, Parent and the Company shall take all such steps as may be required to cause any acquisitions of Parent equity securities (including derivative securities with respect to any Parent equity securities) and dispositions of Company equity securities (including derivative securities with respect to any Company equity securities) resulting from the transactions contemplated by this Agreement by each individual who is anticipated to be subject to the reporting requirements of Section 16(a) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), with respect to Parent or who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company's stockholders fail at the next annual meeting of stockholders of the Corporation , to approve both (i) an amendment increasing the number of shares available for the issuance of options be exempt under Rule 16b-3 promulgated under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock OptionsExchange Act. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. (a) As additional compensation for his services hereunderSubject to approval of the Board, Executive will be granted the Corporation shall grant following stock options, each of which will be, to Executive an option the extent possible under the Corporation's 1993 Stock Option Plan $100,000 rule of Section 422(d) of the Internal Revenue Code of 1986, as amended (the "PlanCODE"), an "incentive stock option" (as defined in Section 422 of the Code): (i) a stock option to acquire purchase 300,000 shares of the Company's Common Stock (as adjusted for stock splits, stock dividends and similar events) (the "FIRST OPTION"), which will vest monthly as to 1/48th of the shares subject to the First Option, so that the First Option will be fully vested four (4) years from the Effective Date, subject to Executive's continued service to the Company through the relevant vesting dates and (ii) a total of stock option to purchase 400,000 shares of the CorporationCompany's common Common Stock (as adjusted for stock splits, stock dividends and similar events) (the "SECOND OPTION"), which, subject to the accelerated vesting provisions set forth herein, will cliff vest in full on the four-year anniversary of the Effectiv▇ ▇▇▇▇, ▇▇bject to Executive's continued service to the Company through the relevant vesting dates; provided, however, that (1) fifty percent (50%) of the shares subject to the Second Option will accelerate and vest on the earlier to occur of the filing by the Company of its first registration statement with the Securities and Exchange Commission under the Securities Act of 1933, as amended, (the "REGISTRATION STATEMENT FILING") or the closing of a Major Transaction (as defined below), and (2) fifty percent (50%) of the shares subject to the Second Option will accelerate and vest at an exercise price per share equal the time the Company first achieves a market capitalization of $500 million (as reasonably determined by the Board prior to the date on which the Company's Common Stock is first traded on a national stock exchange or quotation system, or if the Company's Common Stock is so traded, then based on the closing sale price of the CorporationCompany's common stock as reported by Common Stock on such exchange or system). The First Option and Second Option will have an exercise price equal to the American fair market value of the Company's Common Stock Exchange on the date hereofof grant as determined by the Board in its sole discretion and will be subject to the terms, with the terms definitions and provisions of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 1999 Stock Option Plan (the "1993 PlanOPTION PLAN") to cover and the shares of Common Stock issuable to related stock option agreements by and between Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exerciseOPTION AGREEMENTS"). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator all of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid documents are incorporated herein by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphreference.

Stock Options. (a) As additional compensation for his services hereunderAt the Effective Time, the Corporation shall grant to Executive an option each outstanding Navius Option under the Corporation's 1993 Stock Navius Option Plan (Plans, whether vested or unvested, shall be assumed by Endosonics and deemed to constitute an Endosonics Option to acquire, on the "Plan") to acquire same terms and conditions as were applicable under the Navius Option, a total number of 400,000 shares of Endosonics Common Stock equal to (i) the Corporation's common stock number of shares of Navius Common Stock issuable had the holder of such Navius Option exercised such option in full immediately prior to the Effective Time multiplied by the Option Exchange Ratio (rounded down to the nearest whole number), at an exercise a price per share (rounded up to the nearest whole cent) equal to (i) the closing sale aggregate exercise price for the shares of Navius Common Stock otherwise purchasable pursuant to such Navius Option divided by (ii) the number of full shares of Endosonics Common Stock deemed purchasable pursuant to such Endosonics Option in accordance with the foregoing; provided, however, that, in the case of any Navius Option to which Section 422 of the CorporationCode 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 Endosonics of the Navius Options pursuant to this Section 6.5(a), Navius shall be deemed to have assigned to Endosonics, effective at the Effective Time, Navius's common stock as reported by right to repurchase unvested shares of Navius Common Stock issuable upon the American Stock Exchange on exercise of the date hereofNavius Options or previously issued upon the exercise of options granted under the Navius Option Plans, in accordance with the terms of such the Navius Option Plans and the related stock option to agreements and stock purchase agreements entered into under the Navius Option Plans. For purposes of the foregoing, "OPTION EXCHANGE RATIO" shall be evidenced determined by dividing (x) the quotient obtained by dividing (A) $15,500,000 by (iB) one option letter agreement in the form annexed as Exhibit "A" hereto Reference Stock Price, by ("Option Letter A-1"y) being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")Total Capitalization Number. (b) The Company represents As soon as practicable after the Effective Time, Endosonics shall deliver to the participants in the Navius Option Plans appropriate notice setting forth such participants' rights pursuant thereto and warrants that there are sufficient shares the grants pursuant to the Navius Option Plans 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). Endosonics shall comply with the terms of Common Stock currently available under the Company's 1993 Stock Navius Option Plan (and use best efforts to ensure, to the "1993 Plan"extent required by, and subject to the provisions of, such Navius Option Plan and Sections 422 and 424(a) of the Code, that Navius Options which qualified as incentive stock options prior the Effective Time continue to cover qualify as incentive stock options after the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1Effective Time. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation Endosonics shall take all corporate action necessary to approve both (i) an amendment increasing the reserve for issuance a sufficient number of shares available of Endosonics Common Stock for delivery upon exercise of Navius Options assumed in accordance with this Section 6.5. As soon as practicable after the issuance of options Effective Time and in any event no later than 20 business days after the Closing Date, Endosonics shall file a registration statement on Form S-8 (or any successor or other appropriate forms) under the Plan Securities Act or another appropriate form with respect to an amount at least sufficient to cover all the shares of Endosonics Common Stock issuable upon exercise subject to such options and shall use its best efforts to maintain the effectiveness of Option Letter A-2 such registration statement or registration statements (and Option Letter B and (ii) appropriate amendments to maintain the Plan specifically confirming the right current status of the Corporation's Board of Directors, in the issuance of stock prospectus or prospectuses contained therein) for so long as such options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Optionsremain outstanding. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. (a) As additional compensation for his services hereunderAll stock options outstanding at the Effective Time (i) under Sandy's 1985 Performance Incentive Plan, the Corporation shall grant to Executive an option under the Corporation's 1993 1989 Performance Incentive Plan or Director Stock Option Plan or (ii) pursuant to the nonqualified stock option agreement dated August 8, 1988 between Sand▇ ▇▇▇ Raym▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ the amended nonqualified stock option agreement dated September 1, 1992 between Sand▇ ▇▇▇ Raym▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (▇▇llectively, the "PlanSand▇ ▇▇▇ions") shall, by virtue of the Merger and without any action on the part of the holders of such options, be converted into and become options to acquire a total of 400,000 purchase shares of the Corporation's common stock at an exercise price per share equal to the closing sale price of the Corporation's common stock ADP Common Stock ("Substitute Options") as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by follows: (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("each Substitute Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to will cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of ADP Common Stock issuable (rounded down to the nearest whole share) which the holder of the Sand▇ ▇▇▇ion being replaced would have been entitled to receive in the Merger had such holder exercised, immediately prior to the Effective Time, the Sand▇ ▇▇▇ion which the Substitute Option is replacing; (ii) each Substitute Option will be exercisable for a purchase price per share (rounded down to the nearest cent) determined by dividing (x) the purchase price per share of Sand▇ ▇▇▇mon Stock payable upon exercise of the Sand▇ ▇▇▇ion which the Substitute Option Letter A-2 and Option Letter B and replaced, multiplied by the number of shares of Sand▇ ▇▇▇mon Stock covered by the Sand▇ Option, by (iiy) appropriate amendments to the Plan specifically confirming number of shares of ADP shares of Sand▇ Common Stock covered by the right of the Corporation's Board of DirectorsSubstitute Option, as determined in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that accordance with clause (i) above; and (iii) each Substitute Option will be exercisable, over each time period during which the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or Sand▇ ▇▇▇ion it replaced would have been exercisable (ii) Executive's employment taking into account any acceleration in vesting brought about by the Corporation is terminated Merger), with respect to that number of shares of ADP Common Stock (rounded down to the nearest whole share) determined by multiplying (x) the number of shares of Sand▇ ▇▇▇mon Stock with respect to which the Sand▇ ▇▇▇ion would have been exercisable during that time period by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 the total number of shares of ADP Common Stock covered by the Substitute Option and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect total number of ordinary income, in effect at the time shares of such exercise. Such amount shall be paid Sand▇ Common Stock covered by the Corporation within ninety replaced Sand▇ ▇▇▇ion. (90b) days after any such exercise. Notwithstanding anything Subject to the contrary in this Agreement or the Plan Option Lettersforegoing requirements, the Corporation shall have no obligation terms of each Substitute Option will be substantially equivalent to pay Executive any amount in excess the terms of $250,000 in the aggregate in respect of its obligations under this subparagraphSand▇ ▇▇▇ion that it replaces.

Stock Options. (ai) As additional compensation for his services hereunder, the Corporation The Consultant shall grant receive stock options to Executive an option under the Corporation's 1993 Stock Option Plan purchase Two Hundred Thousand (the "Plan"200,000) to acquire a total of 400,000 shares of the Corporation's common stock of the Company at an exercise price per share equal to the closing sale price for shares of common stock of the Corporation's common stock Company as reported by the American Stock Exchange on the date hereofOTC Bulletin Board on December 18, with 2006 (the terms of such option to be evidenced by (i) one option letter agreement “Stock Options”). The Stock Options shall become exercisable in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stockthree equal annual installments beginning on December 18, 2007. (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto The Consultant shall receive additional stock options to purchase Five Hundred Thousand ("Option Letter A-2"500,000) being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in common stock of the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable Company at an exercise price equal to the closing price for 150,000 shares of Common Stock (such option letters being referred to collectively herein common stock of the Company as reported on the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan OTC Bulletin Board on December 18, 2006 (the "1993 Plan") to cover the shares of Common “Performance Stock issuable to Executive upon exercise of Option Letter A-1. (c) In Options”). The Performance Stock Options shall become exercisable in the event that the Company's stockholders fail at the next annual meeting closing price for shares of stockholders common stock of the Corporation Company as reported on the OTC Bulletin Board exceeds $6.60 per share (subject to approve both (i) an amendment increasing the number of shares available adjustment for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 stock splits, stock dividends, stock combinations and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right other similar transactions of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the Company’s common stock) for a period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment30 consecutive trading days prior to December 31, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options2011. (diii) In The Stock Options and the Performance Stock Options shall terminate immediately upon the termination of the Consultant’s affiliation with the Company (which for purposes of this Agreement shall mean the termination of the Consultant’s services to the Company whether as a director, consultant or employee). The foregoing sentence shall not apply in the event that (i) the Corporation is required Consultant’s services to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive Company terminate solely as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount removal of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated Consultant as a long term capital gain and director of the Company by the Board of Directors without cause, (B) the amount determination of Income Taxes payable by Executive in respect the Board of such exercise (Directors not to nominate the amount of such difference being referred Consultant to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal re-elected to the Tax Difference arising in respect Board of Directors (unless such exercise multiplied by a fractiondetermination is for cause), the numerator of which is 1 and the denominator of which is equal to 1 minus or (iC) the highest marginal federal income tax rate (currently 39.6%) and (ii) failure of the highest marginal state income tax rate applicable stockholders to Executive, in each case in respect re-elect the Consultant to the Board of ordinary income, in effect at the time of such exercise. Such amount shall be paid Directors upon nomination for re-election by the Corporation within ninety (90) days after any such exerciseBoard of Directors. Notwithstanding anything to the contrary contained herein, in this Agreement the event that the Consultant’s affiliation with the Company is terminated due to his removal from the Board of Directors for cause (under the Company’s Amended and Restated Certificate of Incorporation) or the Plan Option LettersConsultant’s engagement hereunder is terminated for Cause (as defined below), the Corporation Stock Options and the Performance Stock Options shall have no obligation terminate immediately. (iv) The Stock Options and the Performance Stock Options shall be non-qualified options. The Stock Options and the Performance Stock Options will be granted as stand-alone awards outside of the Company’s equity incentive plans but will be nevertheless governed by the terms and conditions of the 2001 Plan as though they were granted under the 2001 Plan. The Stock Options and the Performance Stock Options shall be evidenced by award agreements that shall contain terms and conditions consistent with the terms and conditions of options regularly granted to pay Executive any amount in excess directors of $250,000 in the aggregate in respect of its obligations under this subparagraphCompany and not inconsistent with the terms and conditions set forth herein.

Stock Options. (a) As additional compensation for his services hereunder, the Corporation shall The Company agrees that it will grant to Executive an option under the Corporation's 1993 Stock Option Executive, pursuant to the terms of the Company’s 2009 Equity Incentive Plan (the "“Plan"”) to acquire be established by the Company following the Company’s conversion to a total of 400,000 Delaware corporation, stock options to purchase shares of the Corporation's common Common Stock of the Company (each an “Option” and collectively, the “Options”) representing five percent (5%) of the shares of capital stock at an exercise price per share equal of the Company outstanding following the Series A Preferred Stock Financing of the Company (which is expected to occur in the first fiscal quarter of 2009) determined on a fully-diluted, as converted to Common Stock basis, including shares reserved for issuance pursuant to the closing sale Plan. Such Options shall include an “early-exercise” feature, which will allow the Executive to exercise the Options with respect to some or all of the unvested shares and such unvested shares shall thereafter be subject to a repurchase option in favor of the Company, which repurchase option shall lapse in accordance with the stated vesting of such unvested Options. To the maximum extent possible, the Options shall be “incentive stock options” as such term is defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). The purchase price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive Options shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising fair market value per share of the Company’s Common Stock on the date of grant, as determined in respect of such exercise multiplied good faith by the Board based on a valuation performed by a fractionqualified independent appraiser using a traditional appraisal methodology. The Options will be subject to vesting over a period of four (4) years following the grant date, with 1/4th of the numerator shares subject to such Options vesting on the one (1) year anniversary of which is 1 the grant date and 1/48th of the denominator shares subject to such Options vesting on a monthly basis thereafter until all the shares subject to such Options are vested on the fourth anniversary of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executivegrant date, in each case only so long as the Executive remains continuously employed by the Company. In the event of a Change in respect Control (as defined below), regardless of ordinary incometermination of the Executive’s employment, the vesting of the Options set forth in effect at Section 3.3 hereof shall accelerate and vest in full. The terms and vesting of the time of such exercise. Such amount Options will be more fully set forth in the Plan and shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything subject to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess Company’s standard form of $250,000 in the aggregate in respect of its obligations under this subparagraphstock option agreement.

Stock Options. (ai) As additional compensation for his services hereunder, the Corporation The Company shall grant to Executive an Employee a non-qualified option under the Corporation's 1993 Stock Option Plan (the "PlanFirst Option") to acquire a total of 400,000 purchase Nine Hundred Thousand (900,000) shares of the CorporationCompany's common Common Stock, $0.001 par value per share (the "Common Stock") effective on the Effective Date pursuant to the terms of that certain stock at an option agreement attached hereto as Exhibit B and incorporated in whole by this reference (the "First Option Agreement"). The exercise price per share equal to the closing sale price of the Corporation's common stock as reported by First Option shall be the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between lower of: (A) the amount closing price of Income Taxes Executive would have been required to pay had the income recognized Common Stock as shown on such exercise been treated as a long term capital gain and the pink sheets on the Effective Date; or (B) the amount average of Income Taxes payable the closing prices of the Common Stock as shown on the pink sheets for the fifteen (15) trading days immediately preceding the Effective Date. The First Option shall vest as to twenty-five percent (25%) of the shares covered by Executive in respect the First Option immediately on the Effective Date and 1/48th of the shares subject to the First Option beginning on the thirteenth monthly anniversary of the Effective Date and on each monthly anniversary of the Effective Date thereafter for the next thirty-six (36) months. The First Option shall expire on the tenth (10th) anniversary of the Effective Date. Employee's entitlement to the First Option is conditioned upon the approval of the Company's Board of Directors (or a committee thereof) and Employee's execution of the Company's First Option Agreement, and the First Option shall be subject to the terms and conditions of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and First Option Agreement. (ii) In addition to the highest marginal state income tax rate applicable First Option, the Company shall grant to ExecutiveEmployee an option (the "Second Option") to purchase One Hundred Thousand (100,000) shares of the Common Stock effective on the Effective Date pursuant to the terms of that certain stock option agreement attached hereto as Exhibit C and incorporated hereto by this reference (the "Second Option Agreement"). The exercise price per share of the Second Option shall be the lower of: (A) the closing price of the Common Stock as shown on the pink sheets on the Effective Date; or (B) the average of the closing prices of the Common Stock as shown on the pink sheets for the fifteen (15) trading days immediately preceding the Effective Date. The Second Option shall vest upon the first to occur of the attainment of performance objectives to be mutually agreed by the Company and Employee or the fifth anniversary of the Effective Date. The Second Option shall expire on the tenth (10th) anniversary of the Effective Date. Employee's entitlement to the Second Option is conditioned upon the approval of the Company's Board of Directors (or a committee thereof) and Employee's execution of the Second Option Agreement pursuant to which the Second Option is granted, in each case in respect of ordinary income, in effect at and the time Second Option shall be subject to the terms and conditions of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Second Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphAgreement.

Stock Options. (a) At the Effective Time, each outstanding option to purchase Arch Common Stock that has been granted pursuant to the Arch Stock Plan ("Arch Stock Option") shall be treated as set forth in this Section 5.8; provided however, that from and after the date hereof, Arch shall not (i) grant additional Arch Stock Options, (ii) grant any stock appreciation rights or limited stock appreciation rights, (iii) take any action or permit the committee charged with management of the Arch Stock Plan to take any action under the Arch Stock Plan other than the issuance of Arch Common Stock to employees other than Affiliates in the ordinary course and consistent with past practices, or to alter or amend or terminate the Arch Stock Plan or in connection with any Arch Stock Option granted pursuant thereto including, without limitation, any action permitting cash payments to holders of Arch Stock Options in lieu of the treatment otherwise provided in this Section 5.8. (b) Each Arch Stock Option shall, as of the Effective Time, be assumed by Pogo in accordance with the terms hereof. As additional compensation for his services hereunderso assumed, the Corporation such option shall grant be deemed to Executive constitute an option to acquire, on the same terms and conditions as were applicable under such Arch Stock Option, a number of shares of Pogo Common Stock equal to the Corporation's 1993 number of shares of Arch Common Stock purchasable pursuant to such exercisable portion of such Arch Stock Option Plan (multiplied by the "Plan") to acquire Common Exchange Ratio, at a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale per-share exercise price for the shares of Arch Common Stock purchasable pursuant to such Arch Stock Option divided by the Common Exchange Ratio; provided, however, that the number of shares of Pogo Common Stock that may be purchased upon exercise of such Arch Stock Option shall not include any fractional share and, upon exercise of such Arch Stock Option, a cash payment shall be made for any fractional share based upon the arithmetic average of the Corporation's common stock as reported by high and low trading prices ("regular way") of a share of Pogo Common Stock on the American Stock Exchange NYSE on the date hereofof exercise; and provided further, with 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. After the Effective Time, except as provided above in this Section 5.8(b), each assumed option shall fully vest and be evidenced by (i) one option letter agreement in immediately exercisable, but shall otherwise be subject to the form annexed same terms and conditions as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in were applicable to the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 related Arch Stock Option Plan (immediately prior to the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1Effective Time. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation Pogo shall take all corporate action necessary to approve both (i) an amendment increasing the reserve for issuance a sufficient number of shares available of Pogo Common Stock for delivery upon exercise of the issuance of options under Arch Stock Options assumed in accordance with this Section 5.8. As soon as practicable after the Plan Effective Time, Pogo shall file with the SEC a registration statement on Form S-8 (or any successor form) or another appropriate form with respect to an amount at least sufficient to cover all the shares of Pogo Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments subject to the Plan specifically confirming Arch Stock Options and shall use all reasonable efforts to maintain the right effectiveness of such registration statement or registration statements (and maintain the current status of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment prospectus or prospectuses contained therein) for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan so long as Arch Stock OptionsOptions remain outstanding. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. Prior to the Effective Time, each holder of an outstanding Schu▇▇ ▇▇▇ck Option (as defined in Section 4.3) to purchase shares of Schu▇▇ ▇▇▇mon Stock, shall have either (a) As additional compensation exercised such options (so long as such option is vested and exercisable at such time) or (b) agreed to the amendment of such options in the manner described in the following sentence. The Schu▇▇ ▇▇▇ck Options outstanding as of the Effective Time shall be amended such that Oakwood shall be substituted for his services hereunderSchu▇▇ ▇▇ a party thereto and shall continue to have, and be subject to, the Corporation same terms and conditions as set forth in the stock option plans and agreements pursuant to which such Schu▇▇ ▇▇▇ck Options were issued as in effect immediately prior to the Effective Time, except that (a) each Schu▇▇ ▇▇▇ck Option shall grant to Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total be exercisable for that number of 400,000 whole shares of the Corporation's common stock at an exercise price per share Oakwood Common Stock equal to the product of the number of shares of Schu▇▇ ▇▇▇mon Stock covered by such Schu▇▇ ▇▇▇ck Option immediately prior to the Effective Time multiplied by the fraction obtained by dividing $22.50 by the closing sale price of Oakwood Common Stock on the Corporation's common stock as reported by the American New York Stock Exchange on the date hereof, with hereof (the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1Exchange Ratio") being exercisable for 100,000 and rounded up to the nearest whole number of shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Oakwood Common Stock and (iiib) one option letter agreement in the form annexed as Exhibit "B" hereto price at which each such Schu▇▇ ▇▇▇ck Option is exercisable shall be equal to the exercise price of the Schu▇▇ ▇▇▇ck Option immediately prior to the Effective Time divided by the Exchange Ratio and rounded up to the nearest cent. Oakwood shall ("Option Letter B"i) being exercisable reserve for 150,000 issuance the aggregate number of shares of Oakwood Common Stock that will become issuable upon the exercise of such Schu▇▇ ▇▇▇ck Options pursuant to this Section 3.2 and (such option letters being referred ii) as soon as practicable after the Effective Time, file a registration statement on Form S-3 or Form S-8 (or any successor or other appropriate form), as determined by Oakwood, with respect to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Oakwood Common Stock issuable subject to Executive upon exercise such options and shall use its reasonable efforts to maintain the effectiveness of Option Letter A-1. such registration statement (c) In and maintain the event that the Company's stockholders fail at the next annual meeting of stockholders current status of the Corporation prospectus or prospectuses contained therein) for so long as such options remain outstanding. Nothing in this Section 3.2 shall affect the schedule of vesting with respect to approve both (i) an amendment increasing the Schu▇▇ ▇▇▇ck Options to be assumed by Oakwood. For each outstanding Schu▇▇ ▇▇▇ck Option, Schedule 3.2 sets forth the number of shares available of Schu▇▇ ▇▇▇mon Stock for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 which such option is exercisable and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Optionsprice with respect thereto. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. (ai) As additional compensation for his services hereunderUnder the terms of the 2008 Agreement, Executive was granted non-qualified stock options (the Corporation shall grant “Stock Options”) to Executive an option under purchase 500,000 shares of the Corporation's 1993 common stock, par value $.01 per share, of the Company (“Common Stock”), pursuant to the Company’s 2001 Omnibus Stock Option Plan (the "“2001 Plan"”). References to the 2008 Agreement in the Stock Options shall be deemed amended to refer to the corresponding provisions of this Agreement. (ii) Executive will be entitled to receive a grant of options (the “Additional Stock Options”) to acquire a total of 400,000 purchase an additional 500,000 shares of Common Stock if he remains employed by the Corporation's common Company through the date of the earliest of the following events that occurs (if at all) during fiscal year 2010: (1) stock at options are granted generally to other executive officers of the Company; (2) the public announcement of the results for a fiscal quarter in which the Company reported a positive EBITDA, as adjusted, for such fiscal quarter or (3) an “Event” as defined under the 2001 Plan; provided, that any grant of the Additional Stock Options shall be subject to the provisions of paragraph (iv) of this Section 4(c). If granted, the Additional Stock Options will cover 500,000 shares of Common Stock, appropriately adjusted for stock splits and similar events (the “Option Number”); and will be granted as soon as practicable after the occurrence of the applicable event, but not later than the 15th day of the third month after fiscal year 2010. The exercise price per share of any Additional Stock Options will be equal to the closing sale price of the Corporation's common stock as reported by the American Common Stock Exchange on the date hereofof grant. The other terms and conditions (including but not limited to vesting conditions and the period for exercise) of any Additional Stock Options shall be as determined by the Board or the Committee, with in its sole discretion. Furthermore, Executive will be eligible to receive further stock option grants in subsequent fiscal years during the terms term of such option this Agreement, at the sole discretion of the Board or the Committee. (iii) If the Additional Stock Options are granted to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, Executive under paragraph (ii) one option letter agreement in the form annexed above on account of an “Event” as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available defined under the Company's 1993 2001 Plan, such Additional Stock Option Plan (Options shall be vested in full on the "1993 Plan") to cover the shares date of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders grant if other stock options held by executives of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive receive accelerated vesting treatment as a result of an Employer Breach or the occurrence of the Event, and Executive shall also be entitled (zexcept as provided below) to a cash payment equal to the Option Number multiplied by any positive difference between the closing price per share (as appropriately adjusted for stock splits and similar events) of the Common Stock on the last trading day of fiscal 2009 and the closing price per share of the Common Stock on the date of the grant of the Additional Stock Options. This payment shall be paid on a date (determined solely by the Corporation by reason Company) within 60 days after such Event, but not later than the 15th day of the Executive's disability or death prior to third month after fiscal year 2010. Notwithstanding the expiration foregoing, if a “Fundamental Change” as defined under the 2001 Plan occurs before any grant of the options evidenced Additional Stock Options under paragraph (ii) above, then Executive shall not be entitled to receive the payment described in this paragraph (iii), but instead shall become entitled to receive the payment described in paragraph (iv) of this Section 4(c), if the applicable conditions are satisfied. (iv) If a “Fundamental Change” as defined under the 2001 Plan occurs during fiscal year 2010 before any grant of Additional Stock Options under paragraph (ii) above, (1) the Additional Stock Options shall not be granted; and (2) if Executive remains employed by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by Company through the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect date of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax DifferenceFundamental Change, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as entitled to a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount cash payment equal to the Tax Difference arising in respect of such exercise Option Number multiplied by a fraction, any positive difference between the numerator closing price per share (as appropriately adjusted for stocks splits and similar events) of which is 1 the Common Stock on the last trading day of fiscal 2009 and the denominator consideration per share payable to the common shareholders of which is equal the Company in connection with the Fundamental Change. If the Company’s common shareholders receive consideration other than cash consideration, then the Committee in its sole discretion shall determine the appropriate calculation and form of payment to 1 minus achieve the purpose of this provision. Any payment (iregardless of the resulting amount) the highest marginal federal income tax rate due under this paragraph (currently 39.6%iv) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by in lieu of any grant of the Corporation Additional Stock Options and, if applicable, any payment under paragraph (iii) above. Any payment due under this paragraph (iv) shall be made within ninety (90) 60 days after any such exercise. Notwithstanding anything to the contrary in this Agreement or date of the Plan Option LettersFundamental Change, but not later than the Corporation shall have no obligation to pay Executive any amount in excess 15th day of $250,000 in the aggregate in respect of its obligations under this subparagraphthird month after fiscal year 2010.

Stock Options. (a) As additional compensation for his services hereunder, ▇▇▇▇▇▇ shall be granted the Corporation shall grant option to Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 purchase ------------- 1,613,137 shares of the CorporationCommon Stock of the Company, which represents seven percent (7%) of the Company's common stock fully-diluted, as converted equity, at an exercise price per share equal to the closing sale price fair market value of a share of Common Stock of the Corporation's common stock as reported by the American Stock Exchange Company on the date hereofof grant as determined by the Board in its sole discretion. To the extent possible, such Option will be an incentive stock option. The Company currently anticipates (but does not guaranty) that the fair market value of the Common Stock of the Company on the date of grant shall be $.70 per share. Manuel's options shall vest monthly at the rate of 1/48 per month. Upon the termination of Manuel's employment in accordance with the provisions of paragraph 6(b), below, the options shall vest as described in those paragraphs. Except as provided in paragraph 6(b), below, Manuel's options shall be subject to the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (Plan, a copy of which is attached hereto as Exhibit A, and the "1993 Plan") standard option agreement provided pursuant to cover the shares of Common Stock issuable --------- plan. ▇▇▇▇▇▇ will be permitted to Executive upon exercise of Option Letter A-1. (c) In the event that option in full prior to vesting in the underlying shares, subject to the Company's stockholders fail right to repurchase any unvested shares at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable Manuel's original cost upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon her termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation Company shall permit ▇▇▇▇▇▇ to pay Executive an amount equal the option exercise price with a full recourse loan (secured by the shares acquired with the loan) at the lowest interest rate available to avoid the Tax Difference arising in respect imposition of such imputed income under the tax laws to assist ▇▇▇▇▇▇ to exercise multiplied by a fraction, her options. Such loan shall be repayable upon the numerator of which is 1 and the denominator of which is equal to 1 minus earlier of: (i) the highest marginal federal income tax rate (currently 39.6%) and fifth year anniversary of the Effective Date; (ii) the highest marginal state income tax rate applicable termination of Manuel's employment for any reason; or (iii) the date twelve (12) months after ▇▇▇▇▇▇ is first eligible to Executivesell shares of the Company's stock that she holds following an initial public offering of the Company's shares; provided, however, that in each case in respect the event of ordinary incomeManuel's Termination Without Cause, in effect at the time of such exercise. Such amount loan shall be paid by repayable upon the Corporation within ninety earlier of the events stated in clauses (90i) days after any such exerciseor (iii) immediately preceding. Notwithstanding anything to For purposes of the contrary in this Agreement or resale of the Plan Option Lettersunderlying shares under the Option, the Corporation shall have no obligation Company covenants to pay Executive any amount in excess use itsgood faith efforts to make available Rule 701 under the Securities Act of $250,000 1933, as amended (the "Securities Act"), or to register the shares on Form S-1 or S-3 under the Securities Act (in the aggregate in respect of case where the Company registers shares for its obligations own account or for others holding registration rights) or on Form S-8 under this subparagraphthe Securities Act.

Stock Options. (a) As additional compensation for his services hereunderIn consideration of Executive's entering into this Agreement, the Corporation shall grant to Executive an option has been granted under the CorporationCompany's 1993 1997 Stock Option and Annual Incentive Plan (the "USAi Plan") a non-qualified stock option (the "USAi Option") to acquire a total of 400,000 purchase an additional 300,000 shares of the Corporationcommon stock, par value $.01 per share, of the Company (the "Company's common stock at an Common Stock"), which grant was approved by the Compensation Committee of the Board of Directors of the Company on August 25, 2000.The exercise price per share equal to the closing sale price of the CorporationOption is $24.9375.Such USAi Option shall vest and become exercisable in four equal installments on each of the first, second, third and fourth anniversaries of the Effective Date, provided that the Option shall become 100% vested and exercisable upon a Change in Control (as such term is defined in the Plan), and as provided in Section 4(d) of this Agreement. Executive hereby acknowledges that the 100,000 options to purchase the Company's common stock as reported by the American Common Stock Exchange on the date hereof, with the terms of such option proposed to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred granted to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available Executive under the Company's 1993 1997 Stock Option and Annual Incentive Plan (the "1993 USAi Plan") in December 1999 were not granted. Executive further acknowledges that as a result of his resignation from the Boards of Director of Ticketmaster Online-CitySearch, Inc. ("TMCS") and Styleclick Inc. ("Styleclick"), Executive has agreed to cover the forfeit all options to purchase shares of Common Stock issuable TMCS and Styleclick, as more fully described in the letters dated September 21, 2000 to each of TMCS and Styleclick. The Company acknowledges that Executive upon exercise shall retain all rights in and to all other options to purchase shares of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting Common Stock and to all shares of stockholders of the Corporation Restricted Stock, in each case previously granted to approve both (i) an amendment increasing the number of shares available for the issuance of options Executive under the USAi Plan to an amount at least sufficient to cover all and the shares of Common HRN 2000 Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, (A) the period 15,000 shares of exercisability Restricted Stock granted on December 20, 1999 (30,000 shares after giving effect to the 2-for-1 stock split of stock the Company's Common Stock effective February 24, 2000); (B) the option to purchase 100,000 shares of Class A Common Stock, par value $.01 per share, of Hotel Reservations Network, Inc. ("HRN Common Stock") granted on February 22, 2000 with an exercise price of $16.00; (C) the option to purchase 100,000 shares of HRN Common Stock granted on April 5, 2000 with an exercise price of $15.50 (together with the options under described in clause (B) of this paragraph (iii), the Plan "HRN Options"); and (D) the option to purchase 100,000 shares of the Company's Common Stock granted on April 5, 2000 with an exercise price of $20.8675 (the "Prior USAi Option"). The the USAi Option, the Prior USAi Option and the HRN Options (collectively, the "2000 Options") shall expire upon the earlier to occur of (x) ten years from the date of the respective grant or (y) except as otherwise provided in the award agreement for any such option or in Section 4 of this Agreement, 90 days following the termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by with the Corporation is terminated (x) by the Corporation Company for any reason other than for Cause, (y) by Executive reason. The Prior USAi Option and the HRN Options shall vest as set forth in the Prior Employment Agreement. The 2000 Options shall not become vested and exercisable as a result of an Employer Breach the termination or non-renewal of this Agreement (z) by or the Corporation by reason termination of the Executive's disability or death prior to employment with the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay Company) for any U.S. federal or state income and withholding tax (collectivelyreason, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated except as a long term capital gain and (B) the amount of Income Taxes payable by Executive provided in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exerciseSection 4(d). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. (a) As additional compensation for his services hereunderAt the Effective Time, the Corporation Company will assume the option plans listed on Schedule 5.7(a) of the Seller Disclosure Schedule (the “Option Plans”) and all of the Seller’s obligations thereunder. At the Effective Time, each outstanding option issued pursuant to the Option Plans (each, an “Option”) shall grant be deemed to Executive constitute an option to acquire, on the same terms and conditions as were applicable under such Option (including, without limitation, the Corporation's 1993 Stock Option Plan (the "Plan") to acquire time periods allowed for exercise), a total number of 400,000 shares of Company Common Stock equal to the Corporation's common stock product of (i) the sum of (A) the Stock Amount and (B) the Additional Stock Amount, if any, and (C) the quotient calculated by (I) dividing the Cash Amount by (II) the Valuation Period Market Value (rounded to the nearest ten-thousandth of a share), and (ii) the number of shares of Seller Common Stock subject to such Option (provided that any fractional shares of Company Common Stock resulting from such calculation shall be rounded up to the nearest whole share), at an exercise a price per share equal to the closing sale aggregate exercise price for the shares of the Corporation's common stock as reported Seller Common Stock subject to such Option divided by the American Stock Exchange on the date hereof, with the terms number of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Company Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (subject to such option letters being referred to collectively herein as the "Plan Option Letters")assumed Option. (b) The Company represents and warrants that there are shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Company Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive for delivery upon exercise of Option Letter A-1. the Options adjusted in accordance with this Section 5.7. The Company shall file one or more registration statements on Form S-8 (cor any successor form) In or another appropriate form, promptly after the event that Effective Time, with respect to the Company's stockholders fail at Company Common Stock subject to such Options and shall use its reasonable efforts to maintain the next annual meeting effectiveness of stockholders such registration statement or registration statements (and maintain the current status of the Corporation related prospectus or prospectuses) for so long as such Options remain outstanding. With respect to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments those individuals who subsequent to the Plan specifically confirming Merger will be subject to the right reporting requirements under Section 16(a) of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employmentExchange Act, the Company agrees, upon receipt of a written demand from Executive, to promptly amend shall administer the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters Plans assumed pursuant to Paragraph 5(c) or (ii) Executive's employment by this Section 5.7 in a manner that complies with Rule 16b-3 promulgated under the Corporation is terminated (x) by Exchange Act to the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by extent the Corporation by reason of the Executive's disability or death Option Plans complied with such rule prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphMerger.

Stock Options. (aA) Unity and Feraro hereby stipulate and agree that: (i) As additional compensation for his services hereunderof December 31, 2003, Feraro has the Corporation shall grant to Executive an option under the Corporation's 1993 Stock Option Plan following vested stock options (the "Plan"“Options) to acquire a total of 400,000 50,750 shares of the Corporation's common stock at an exercise price per share equal to stock, no par value, of Unity Bancorp, Inc. (the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof“Common Stock”), with the terms of such option to be evidenced by (i) one option letter agreement in following exercise prices, under the form annexed as Exhibit "A" hereto ("following Stock Option Letter A-1") being exercisable Grants: Options for 100,000 35,000 shares of Common Stock, (ii) one option letter agreement in with an exercise price of $ 3.45 per share, under the form annexed as Exhibit "A-2" hereto ("January 25, 2001 Stock Option Letter A-2") being exercisable Grant, 17,500 of such Options vested on January 25, 2002, and 17,500 of such Options on January 25, 2003; Options for 150,000 7,000 shares of Common Stock with an exercise price of $ 4.05 per share, under the July 18, 2001 Stock Option Grant, 3,500 of such Options vested on July 18, 2002, and 3,500 of such Options vested on July 18, 2003; and Options for 8,750 shares of common stock with an exercise price of $ 6.44 per share, under the October 17, 2002 Stock Option Grant, all of which Options vested on October 17, 2003; and, (iiiii) one option The post-termination exercise of such Options shall be controlled by Paragraph 2(e)(iv) of the Stock Option Grants specified above. (B) Such Options shall be exercisable, and may be exercised, by Feraro within three (3) months after December 31, 2003, but in no event earlier than Unity’s receipt of a letter agreement in the form annexed attached hereto as Exhibit "B" hereto A; and, ("Option Letter B"C) being exercisable Such right to exercise such Options shall include the right to elect to exercise such Options pursuant to a “cashless exercise” of such Options on the same basis and in the same manner that Unity has previously permitted, facilitated and arranged for 150,000 shares the “cashless exercise” of Common Stock (such option letters being referred to collectively herein as options during the "Plan Option Letters")period of Feraro’s employment with Unity. (bD) The Company represents Feraro acknowledges and warrants agrees that there are sufficient he has no right or option to purchase any other shares of Unity Common Stock currently available except for the vested Options that he has as of the date hereof and, except as set forth above, waives any rights he may have under any stock option grants for the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the purchase of any additional shares of Unity Common Stock issuable to Executive upon exercise all of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directorswhich, in the issuance of stock options under the Planexcept as aforesaid, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized deemed terminated as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In additionDecember 31, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph2003.

Stock Options. (a) As additional compensation for his services hereunderOn the date of the first regular meeting of the Committee which occurs each calendar year during the Term, the Corporation Company shall grant to the Executive an a ten- year stock option under the Corporation's 1993 Company’s 1990 Stock Option Plan or any successor or other plan maintained by the Company (“Stock Plan”). With respect to any Stock Plan under which the "Plan") Executive is granted options to acquire a total of 400,000 purchase shares of the Corporation's Company’s common stock reserved thereunder at an exercise price per share equal to the closing sale price of the Corporation's common any time when such stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by is publicly traded (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of on a national securities exchange on which such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) listed or (ii) over the counter on an established market, prior to such time as options granted under the Stock Plan to the Executive are first exercisable, the Company shall register the interests in the Stock Plan and the shares of the Company’s common stock reserved thereunder under all applicable securities laws. On the date of the first regular meeting of the Committee in 1999, 2000, 2001 and any subsequent year during the Term, the Company shall grant the Executive an additional ten-year option under the Company’s Stock Plan (or any successor plan) to purchase a number of shares of the Company’s common stock not less than that number (rounded up to the next full number) which is equal to the Executive's employment ’s Base Rate on such grant date multiplied by 2.5 which product shall be divided by the Corporation is terminated fair market value of a share of common stock (xas defined in the Stock Plan) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death on such date. Each option granted hereunder shall provide that it shall not terminate prior to the expiration of its ten-year term unless the options evidenced by Company terminates the Plan Option Letters Executive’s employment for Cause and no less than one-third of the Company’s common stock subject to the option shall be cumulatively exercisable on the date of the grant and on each of the succeeding two anniversaries so that after the second anniversary of the grant date of the option the Executive is required after (or his representative or estate, as applicable) may exercise any unexercised portion of such event option throughout the remainder of the option’s ten-year term. Subject to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise the preceding provisions of options evidenced by the Plan Option Lettersthis Section 4(c), the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain form and (B) the amount of Income Taxes payable by Executive in respect other terms and conditions of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive options shall be determined by assuming that the income recognized substantially as set forth in Exhibit A, “Lufkin Industries, Inc. Stock Option Agreement” attached to and forming a result part of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphAgreement.

Stock Options. (a) As additional compensation for his services hereunderAt the Effective Time, the Corporation shall grant all options to Executive an option purchase shares of TeleCorp Common Stock then outstanding under the Corporation's 1993 TeleCorp 1999 Stock Option Plan (the "TeleCorp 1999 Plan") ), by virtue of the First Merger and without any action on the part of the holder thereof, shall no longer be options to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of TeleCorp Common Stock and (iii) one option letter agreement shall become options to acquire Class A Voting Stock with such terms as provided in Section 1.8(b). At the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 Effective Time, all options to purchase shares of Tritel Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available then outstanding under the Company's 1993 Tritel Non-Employee Directors Stock Option Plan (the "1993 Tritel Directors Plan") and the Tritel 1999 Stock Option Plan (the "Tritel 1999 Plan," and with the TeleCorp Option Plans and Tritel Directors Plan, the "Option Plans"), by virtue of the Second Merger and without any action on the part of the holder thereof, shall no longer be options to cover acquire Tritel Common Stock and shall become options to acquire Class A Voting Stock with such terms as provided in Section 1.8(b). Outstanding options under the Option Plans are referred to herein as "Outstanding Employee Options." (b) Each such Outstanding Employee Option shall continue to have, and be subject to, the same terms and conditions set forth in the relevant Option Plan, option agreements thereunder and other relevant documentation immediately prior to the Effective Time, except that such Outstanding Employee Options will be exercisable solely for that number of whole shares of Class A Voting Stock equal to the product of the number of shares of TeleCorp or Tritel Common Stock, as the case may be, that were purchasable under such Outstanding Employee Option immediately prior to the Effective Time multiplied by the applicable Exchange Ratio, rounded down to the nearest whole number of shares of the Holding Company Common Stock and the per-share exercise price for the shares of Common Class A Voting Stock issuable to Executive upon exercise of Option Letter A-1such assumed Outstanding Employee Options will be equal to the quotient determined by dividing the exercise price per-share of TeleCorp or Tritel Common Stock, as the case may be, at which such Outstanding Employee Options were exercisable immediately prior to the Effective Time by the relevant Exchange Ratio, and rounding the resulting exercise price up to the nearest whole cent. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the The Holding Company shall reserve for issuance a sufficient number of shares available of Class A Voting Stock for delivery upon exercise of Outstanding Employee Options. As soon as practicable after the issuance of options Effective Time, the Holding Company shall file a registration statement on Form S-8 under the Plan to an amount at least sufficient to cover all Securities Act covering the shares of Common Class A Voting Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of the Outstanding Employee Options assumed by the Holding Company, and shall use its reasonable efforts to cause such stock options (including without limitation, registration statement to become effective as soon thereafter as practicable and to maintain such registration in effect until the period exercise or expiration of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock such assumed Outstanding Employee Options. (d) In the event that (i) the Corporation is TeleCorp and Tritel shall take all such steps as may be required to amend cause consummation of the Plan Option Letters pursuant to Paragraph 5(ctransactions contemplated by Section 1.8(a) and (b) and any other disposition of TeleCorp or Tritel equity securities (iiincluding derivative securities) Executive's employment in connection with this Agreement by the Corporation is terminated each individual who (x) by the Corporation for any reason other than for Cause, is a director or officer of TeleCorp or Tritel or (y) by Executive at the Effective Time will be a director or officer of the Holding Company, to be exempt under Rule 16b-3 promulgated under the Exchange Act (as a result of an Employer Breach or (z) defined below), such steps to be taken in accordance with the No-Action Letter dated January 12, 1999, issued by the Corporation by reason SEC (as defined below) to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP. (e) At the Effective Time, the Holding Company shall assume all of the Executive's disability or death prior to obligations of TeleCorp under the expiration of TeleCorp 1998 Restricted Stock Plan (the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income TaxesTeleCorp Restricted Stock Plan") on any income recognized by Executive arising upon any exercise and of options evidenced by Tritel under the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive Tritel Restricted Stock Agreements specified in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphSchedule 1.8.

Stock Options. It is expressly agreed that ▇▇▇▇▇▇ may exercise any unexercised vested outstanding options (a) As additional compensation for his services hereunder, the Corporation shall grant to Executive an option under the Corporation's 1993 "Stock Option Plan (the "PlanOptions") granted to acquire a total ▇▇▇▇▇▇ pursuant to any of 400,000 shares of the CorporationHCC's common various stock at an exercise price per share equal to the closing sale price of the Corporation's common option plans and stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock agreements between ▇▇▇▇▇▇ and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock HCC (such stock option letters plans and stock option agreements being herein collectively referred to collectively herein as the "Plan Stock Option LettersAgreements"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under , but only in accordance with the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan operative Stock Option Agreement, including those provisions relating to termination of employment. Stock Options that have not vested before the Separation Date shall be forfeited. No further stock option awards, accruals, vesting, or payments of any kind will be made to ▇▇▇▇▇▇ for any plan year. In connection with any exercise of any Stock Options. (d) , ▇▇▇▇▇▇ shall first fully satisfy and fund HCC's tax withholding obligations, if any, that may arise in connection with ▇▇▇▇▇▇'▇ exercise of such Stock Option. In the event addition, ▇▇▇▇▇▇ agrees that (i) in connection with each exercise of any Stock Option, ▇▇▇▇▇▇ will immediately deliver the Corporation is required certificates evidencing the resulting shares of stock (the "Option Shares") to amend HCC in freely transferable form as collateral for the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason repayment of the Executive's disability or death prior Existing Loans (as defined below) together with such stock powers, financing statements and security agreements as HCC shall reasonably require to evidence and perfect a first priority security interest in the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) Shares and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety five (905) business days after Hanover presents initial drafts to ▇▇▇▇▇▇, ▇▇▇▇▇▇ will execute and deliver to HCC such security agreements and financing statements as HCC shall reasonably require to evidence and perfect a first priority security interest in any such exercise. Notwithstanding anything Option Shares that have been, or may in the future be, issued pursuant to the contrary in Stock Options (collectively the "2002 Stock Pledge Agreements"). All Option Shares shall secure the Existing Loans pursuant to the terms of the 2002 Stock Pledge Agreements and on terms consistent with this Agreement Agreement. The 2002 Stock Pledge Agreements shall include provisions that allow or the Plan Option Lettersrequire, as indicated below, the Corporation shall have no obligation sale of all or a portion of the Option Shares covered thereby and the application of the resulting proceeds to pay Executive any amount in excess of $250,000 the following in the aggregate in respect following order of its obligations under this subparagraph.priority:

Stock Options. (a) As additional compensation for his services hereunderDuring the Employment Term, the Corporation Board shall grant to Executive an option under during each one-year period on the Corporationearlier of the date of the Annual Meeting of Stockholders or one hundred fifty (150) days following the end of the Company's 1993 Stock Option Plan fiscal year, options to purchase 25,000 shares of the Company's Common Stock, no par value (the "PlanCommon Stock") and stock appreciation rights ("SARS") relating to acquire a total of 400,000 an additional 25,000 shares of the CorporationCompany's common stock at an Common Stock, each on the following terms and conditions: (i) The exercise price per share of each option and the initial valuation of each SAR shall be equal to (A) if the closing sale price Common Stock is traded on the NASDAQ Automated Quotation System, the average of the Corporation's common stock high and low bid and asked price for one share of Common Stock during the five (5) business days preceding the date of grant as reported by the American Stock Exchange such system or exchange, as reported on the NASDAQ Automated Quotation System; (B) if transactions in the Common Stock are reported on the NASDAQ National Market System or the Common Stock is listed on any national stock exchange, the average closing price for one share of Common Stock during the five (5) business days preceding the date hereofof grant, as reported on such system or by such exchange; or (C) if neither (A) nor (B) is applicable, then the fair market value of one share of the Common Stock, as determined by the Board. (ii) All stock options and SARS granted to Executive pursuant to this Section 4(d): (A) shall be immediately exercisable; (B) shall expire to the extent not exercised prior to the close of business on the day ten (10) years from the date of grant; (C) may be exercised as to the whole or any part, by written notice to the Company, stating the number of shares with respect to which the terms option is being exercised and specifying a date, not less than ten (10) nor more than twenty (20) days after the date of such option notice, as the date on which the stock will be taken up and payment, if any, made therefor at the principal office of the Company; (D) in the case of options, shall, to the maximum extent permitted under the Internal Revenue Code, be evidenced options intended to qualify as "Incentive Stock Options" pursuant to Section 422 of the Internal Revenue Code; (E) shall be governed by (i) one option letter agreement agreements substantially in the form annexed of the agreements which are Exhibits to the Company's 1991 Employee Stock Incentive Plan approved by the Board of Directors of the Company on December 13, 1990, or as Exhibit "A" hereto otherwise agreed upon by the parties; and ("Option Letter A-1"F) being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement shall be subject to all other terms identical to those contained in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Company's 1991 Employee Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) Incentive Plan. The Company represents shall use its best efforts to assure that all options and warrants that there SARS are sufficient shares of Common Stock currently available granted to Executive under the Company's 1993 1991 Employee Incentive Stock Option Plan (Plan, or a similar plan later adopted by the "1993 Plan") to cover Company which satisfies the shares conditions of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders Rule 16b-3 of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 Securities and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause Exchange Commission or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Optionsany successor thereto. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. (a) As additional compensation for his services hereunder, The Executive shall be eligible to receive non-qualified options to purchase an aggregate of 350,000 shares of Common Stock of the Corporation shall grant pursuant to Executive an option under the Corporation's 1993 Stock Option 2002 Long-Term Incentive Plan (or such other plan applicable to executives of the Corporation in effect from time to time) (each, an "Option" and collectively, the "PlanOptions"). The Options shall be granted by the Corporation in eight (8) semi-annual installments consisting of 43,750 Options each on April 1 and October 1 (each April 1 and October 1 shall be referred to herein as a "Date of Grant") commencing on October 1, 2002 through April 1, 2006. Each Option shall have a strike price equal to acquire a total of 400,000 shares the Fair Market Value (as defined in the Corporation's applicable stock option plan) of the Corporation's common Common Stock on the Date of Grant and shall become fully vested five (5) years from such Date of Grant and exercisable for two (2) years thereafter, with the same terms and conditions as the Corporation's then current standard non-qualified stock at an exercise option agreement for executives, except as provided below. The Options shall also vest in accordance with the following stock performance targets for the Corporation's Common Stock: One third of each Option grant shall vest upon the Corporation's Common Stock achieving a market price of five dollars ($5.00) per share equal to greater than the closing sale price Fair Market Value of the Corporation's common stock as reported by the American Common Stock Exchange on the date hereof, with Date of Grant; One-third of each Option grant shall vest upon the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Corporation's Common Stock and achieving a market price of ten dollars (iii$10.00) one option letter agreement in per share greater than the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to the Plan specifically confirming the right Fair Market Value of the Corporation's Board Common Stock on the Date of DirectorsGrant; and the remaining one third of each Option grant shall vest upon the Corporation's Common Stock achieving a market price of fifteen dollars ($15.00) per share greater than the Fair Market Value of the Corporation's Common Stock on the Date of Grant; provided, however, that in no event shall an Option be exercised for the first six (6) months following a Date of Grant. Notwithstanding the foregoing, (A) upon a Change of Control (as defined in the issuance Corporation's applicable stock option plan), (x) all shares with respect to which any Option granted prior to the Change of stock options under Control shall become fully exercisable and (y) any remaining Options not previously granted shall be immediately granted and become vested and fully exercisable with a strike price equal to the Plan, to determine provisions regarding terms Fair Market Value of the exercise Corporation's Common Stock on the day that is ninety (90) days prior to the public announcement of such stock options the Change of Control; and (including without limitation, the period of exercisability of stock options under the Plan B) upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (x) all shares with respect to which any Option granted shall become vested and fully exercisable and (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive remaining Options not previously granted shall be determined by assuming that the income recognized as immediately granted and become fully exercisable with a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount strike price equal to the Tax Difference arising in respect Fair Market Value on the applicable Date of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphTermination."

Stock Options. 4.1 Executive has been granted (ai) As additional compensation for his services hereunder, the Corporation shall grant to Executive an option under (the Corporation"Company Class A Stock Option") to purchase 250,000 shares of the Company's 1993 common stock pursuant to the Company's Amended and Restated 1989 Class A Stock Option Plan (the "Class A Plan") and the terms of a stock option agreement entered into between the Company and Executive (the "Company Class A Stock Option Agreement") and (ii) an option (the "Company Class B Stock Option" and collectively with the Company Class A Stock Option, the "Company Stock Options") to acquire a total of 400,000 purchase 200,000 shares of the CorporationCompany's common stock at an exercise price per share equal pursuant to the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Amended and Restated 1989 Class B Stock Option Plan (the "1993 Class B Plan") and the terms of a stock option agreement entered into between the Company and Executive (the "Company Class B Stock Option Agreement" and together with the Company Class A Stock Option Agreement, the "Company Stock Option Agreements"). Subject to cover Executive's remaining in the employ of the Company or CareInsite (except as set forth in Sections 5.2, 5.3 and 5.5 below), the Company Stock Options shall be exercisable in accordance with the following schedule: Anniversary of % of Stock Date of Grant Options Exercisable -------------- ------------------- 1st 20% 2nd 40% 3rd 60% 4th 80% 5th 100% Executive will be eligible to receive future grants of options to purchase shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail common stock at the next annual meeting of stockholders discretion of the Corporation Stock Option Committee of the Board. 4.2 Executive has also been granted an option (the "CareInsite Stock Option", collectively with the Company Stock Options, the "Stock Options") to approve both purchase 450,000 shares of the common stock of CareInsite pursuant to the terms of CareInsite's 1999 Officer Stock Option Plan (ithe "CareInsite Plan") an amendment increasing and a stock option agreement entered into between CareInsite and Executive (the number "CareInsite Stock Option Agreement" and, together with the Company Stock Option Agreements, the "Stock Option Agreements"). Subject to Executive's remaining in the employ of shares available for CareInsite or the issuance Company (except as set forth in Sections 5.2, 5.3 and 5.5 below), the CareInsite Stock Option shall be exercisable in accordance with the following schedule: Anniversary of % of Date of Grant Stock Option Exercisable ------------- ------------------------ 1st 20% 2nd 40% 3rd 60% 4th 80% 5th 100% ; provided, however, that, subject to Section 5.2, 5.3 and 5.5 below, no portion of the CareInsite Stock Option shall become vested and exercisable prior to December 15, 2001 (on such date, the portion of the CareInsite Stock Option shall become vested and exercisable to the extent that such portion would have become exercisable by virtue of the above vesting schedule). Executive will be eligible to receive future grants of options under the Plan to an amount at least sufficient to cover all the purchase shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to CareInsite's common stock at the Plan specifically confirming the right discretion of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms Compensation Committee of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock OptionsCareInsite Board. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraph.

Stock Options. (a) As additional compensation for his services hereunderSubject to approval by the Board or the Compensation Committee, effective on the Corporation shall grant Effective Date, Employee will be granted stock options to Executive purchase an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total aggregate of 400,000 250,000 shares of the Corporation's Company’s common stock (the “Common Stock”) at an a per share exercise price per share equal to the closing sale price of the Corporation's common stock as reported by Common Stock on the American Stock Exchange Nasdaq Global Select Market on the date hereofof grant, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both two awards: (i) an amendment increasing option to purchase 100,000 shares, which will be granted pursuant to and subject to the number terms and conditions of shares available for the issuance of options under Company’s 2017 Equity Incentive Plan (the “2017 Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B Option”), and (ii) appropriate amendments an option to purchase 150,000 shares, which will be an inducement material to you joining the Company, pursuant to Rule 5635(c)(4) of the Nasdaq Listed Company Manual (the “Inducement Option” and together with the 2017 Plan Option, the “Options”) The 2017 Plan Option will be, to the Plan specifically confirming maximum extent permissible, treated as an “incentive stock option” within the right meaning of Section 422 of the Corporation's Board of Directors, in Internal Revenue Code and the issuance of stock options under rules and regulations thereunder. The 2017 Plan Option will be further subject to the Plan, to determine provisions regarding terms of a stock option agreement as approved by the Board setting forth the exercise price, vesting conditions and other restrictions, and the Inducement Option will be subject to all terms, vesting schedules and other provisions as set forth in a separate option agreement. One fourth (1/4th) of each of the 2017 Plan Option and the Inducement Option will vest on the first (1st) anniversary of the Effective Date, and one forty-eighth (l/48th) of each of the 2017 Plan Option and the Inducement Option will vest each month over the following thirty-six (36) months thereafter, so long as Employee remains employed by the Company through each such stock options vesting date. Fifty percent (including without limitation50%) of any unvested portion of the 2017 Plan Option and 50% of any unvested portion of the Inducement Option will vest immediately prior to, and subject to, the period consummation of exercisability a Change in Control (as defined below) and, subject to Employee’s execution of stock options under the release of claims described in Section 4(b), any remaining unvested portion of the 2017 Plan upon termination Option and any remaining unvested portion of the Inducement Option will immediately vest if Employee’s employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, is terminated by the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. without Cause (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(cas defined below) or Employee resigns with Good Reason (iias defined below) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any following a Change in Control. A “Change in Control’’ means (i) the Company’s merger or consolidation with or into another entity such exercise. Notwithstanding anything that the stockholders of the Company prior to such transaction do not or are not expected to own a majority of the contrary in this Agreement voting stock of the surviving entity, (ii) the sale or other disposition of all or substantially all of the Plan Option Lettersassets of the Company, or (iii) the Corporation shall have no obligation sale or other disposition of greater than fifty percent (50%) of the then-outstanding voting stock of the Company by the holders thereof to pay Executive any amount in excess one or more persons or entities who are not then stockholders of $250,000 in the aggregate in respect of its obligations under this subparagraphCompany.

Stock Options. As of the Effective Time, each outstanding stock option to purchase shares of MYR Common Stock (aeach, an "MYR Stock Option") As additional compensation for his services hereundershall, by virtue of the Corporation shall grant Merger and without any action on the part of the holder thereof, entitle the holder thereof to Executive receive in settlement of the exercisable portion thereof a cash payment from MYR in an option under the Corporation's 1993 Stock Option Plan amount (the "PlanOption Cash-Out Amount") to acquire a total of 400,000 shares of the Corporation's common stock at an exercise price per share ), if any, equal to the closing sale price product of the Corporation's common stock as reported by the American Stock Exchange on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders excess of the Corporation to approve both (i) an amendment increasing Merger Consideration over the number per share exercise price of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common such MYR Stock issuable upon exercise of Option Letter A-2 and Option Letter B Option, and (ii) appropriate amendments the total number of shares of MYR Common Stock which the holder of such MYR Stock Option is entitled to the Plan specifically confirming the right purchase under such portion of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms MYR Stock Option (whereupon such portion of the exercise MYR Stock Option shall be canceled). Each MYR Stock Option, or portion thereof, that is not exercisable at the Effective Time, shall be canceled as of such stock options (including without limitationtime and the holder thereof shall become entitled to receive on the date such MYR Stock Option, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employmentportion thereof, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive otherwise would have been required to pay had the income recognized on such exercise been treated as become exercisable a long term capital gain and (B) the amount of Income Taxes payable by Executive cash payment from MYR in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising Option Cash-Out Amount. GPU agrees to make cash in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is an amount equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of Option Cash-Out Amount available to MYR as required to enable MYR to honor its obligations under this subparagraph.Section 2.1.3. Notwithstanding the foregoing, subject to the receipt of any required regulatory approvals, within 20 business days after the Effective Time each holder of an MYR Stock Option may elect in writing, in lieu of the cash settlement set forth in the first two sentences of this Section 2.1.3, to have any of such outstanding MYR Stock Options assumed by GPU, which assumed MYR Stock Options shall continue to have, and be subject to, the same terms and conditions set forth in the stock option plans and agreements pursuant to which the MYR Stock Options were issued as in effect immediately prior to the Effective Time, except that (a) such assumed MYR Stock Options shall be exercisable for that number of whole shares of GPU Common Stock equal to the product of the number of shares of MYR Common Stock covered by the assumed MYR Stock Option immediately prior to the Effective Time multiplied by the number (the "Exchange Ratio") determined by dividing the Merger Consideration by the average closing price of GPU Common Stock for the five (5) trading days immediately preceding the Effective Time, rounded up to the nearest whole number of shares of GPU Common Stock, (b) the per share exercise price for the GPU Common Stock issuable upon the exercise of such assumed MYR Stock Option shall be equal to the quotient

Stock Options. (a) As additional compensation At the Effective Time, each outstanding option to purchase IPIX Shares (an "IPIX Stock Option" or collectively, "IPIX Stock Options") issued pursuant to the 1997 Equity Compensation Plan and all other contractual grants for his services hereunderoptions to purchase IPIX Shares, whether vested or unvested and all other outstanding options to purchase IPIX Shares that are listed in Section 1.09 of the Disclosure Schedule, shall be assumed by Newco (all of such plans or agreements pursuant to which any IPIX Stock Option has been issued or may be issued are referred to collectively as the "IPIX Stock Option Plans"). Each IPIX Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such IPIX Stock Option, the Corporation shall grant same number of Newco Shares (rounded up to Executive an option under the Corporation's 1993 nearest whole share) as the holder of such IPIX Stock Option Plan (would have been entitled to receive pursuant to the "Plan") Merger had such holder exercised such option in full immediately prior to acquire the Effective Time, at a total of 400,000 shares of the Corporation's common stock at an exercise price per share (rounded up to the nearest whole cent) equal to (y) the closing sale aggregate exercise price for the IPIX Shares otherwise purchasable pursuant to such IPIX Stock Option divided by (z) the number of Newco Shares deemed purchasable pursuant to such IPIX Stock Option; provided, however, that in the case of any option to which section 421 of the Corporation's common Code applies by reason of its qualification under section 422 of the Code ("incentive stock as reported by options" or "ISOs"), the American Stock Exchange on option price, the date hereof, with number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to be evidenced by (icomply with section 424(a) one option letter agreement in of the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters")Code. (b) The Company represents At the Effective Time, each outstanding option to purchase bamboo Shares (a "bamboo Stock Option" or collectively, "bamboo Stock Options") issued pursuant to the 1998 Employee, Director and warrants that there are sufficient shares Consultant Stock Plan or Amended and Restated 1999 Employee Stock Purchase Plan, whether vested or unvested, shall be assumed by Newco (all of Common Stock currently available under the Company's 1993 such plans or agreements pursuant to which any bamboo Stock Option Plan (has been issued or may be issued are referred to collectively as the "1993 Planbamboo Plans"). Each bamboo Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such bamboo Stock Option, the same number of Newco Shares (rounded up to the nearest whole share) as the holder of such bamboo Stock Option would have been entitled to cover 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 down to the nearest whole cent) equal to (y) the aggregate exercise price for the bamboo Shares otherwise purchasable pursuant to such bamboo Stock Option divided by (z) the number of full Newco Shares deemed purchasable pursuant to such bamboo Stock Option; provided, however, that in the case of any ISO, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of Common Stock issuable to Executive upon exercise of Option Letter A-1such option shall be determined in order to comply with section 424(a) of the Code. (c) In As soon as practicable after the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments Effective Time, Newco shall deliver to the Plan specifically confirming holders of IPIX Stock Options and bamboo Stock Options appropriate notices setting forth such holders' rights pursuant to the right of respective IPIX Plans and bamboo Plans and the Corporation's Board of Directors, in agreements evidencing the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise grants of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) IPIX Options and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially bamboo Options shall continue in effect on the same terms and provisions conditions (subject to the adjustments required by this Section 1.09 after giving effect to the Merger). Newco shall comply with the terms of the Plan IPIX Plans and bamboo Plans and ensure, to the extent required by, and subject to the provisions of, such Plans, that IPIX Stock OptionsOptions and bamboo Stock Options which qualified as incentive stock options immediately prior to the Effective Time continue to qualify as incentive stock options of Newco after the Effective Time. (d) In the event that (i) the Corporation is required Newco shall take all corporate action necessary to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation reserve for any reason other than issuance a sufficient number of Newco Shares for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising delivery upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain IPIX Stock Options and (B) the amount of Income Taxes payable by Executive bamboo Stock Options assumed in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in accordance with this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphSection 1.

Stock Options. (a) As additional compensation for his services hereunder, the Corporation shall LSI acknowledges that Mint has granted or will grant prior to Executive an Closing to Holder a nonqualified stock option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 purchase 424,242 shares of the Corporation's common stock Common Stock of Mint at an exercise price of $5.50 per share (the "Alba▇▇▇▇ ▇▇▇ion"). The Alba▇▇▇▇ ▇▇▇ion vests in equal portions over three years, with one-third vesting on each of the first, second and third anniversaries of the Closing Date; provided however, that if Holder is involuntarily terminated by LSI as an employee of LSI without Cause (as defined in the Alba▇▇▇▇ ▇▇▇loyment and Non-Competition Agreement attached hereto as Exhibit B) or due to Death or Disability (as defined in that agreement), the Alba▇▇▇▇ ▇▇▇ion shall fully vest and become exercisable immediately. At the Effective Time, all options (including the Alba▇▇▇▇ ▇▇▇ion and the options issued pursuant to Section 5.14 hereof) to purchase Mint Common Stock (each a "Mint Option") then outstanding under Mint's 1996 Stock Option Plan as amended (the "Option Plan"), or otherwise, shall be assumed by LSI in accordance with provisions described below. (1) Each Mint Option so assumed by LSI under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Option Plan and/or as provided in the respective option agreements governing such Mint Option immediately prior to the Effective Time, except that (A) such Mint Option shall be exercisable for that number of whole shares of LSI Common Stock equal to the closing sale price product of the Corporation's common stock as reported number of shares of Mint Common Stock that were issuable upon exercise of such Mint Option immediately prior to the Effective Time multiplied by the American Stock Exchange on Ratio (as defined below), rounded down to the date hereof, with the terms nearest whole number of such option to be evidenced by (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common Stock, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of LSI Common Stock and (iiiB) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable per share exercise price for 150,000 shares of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"). (b) The Company represents and warrants that there are sufficient shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both (i) an amendment increasing the number of shares available for the issuance of options under the Plan to an amount at least sufficient to cover all the shares of LSI Common Stock issuable upon exercise of such assumed Mint Option Letter A-2 and Option Letter B and (ii) appropriate amendments shall be equal to the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of quotient determined by dividing the exercise of price per share at which such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Mint Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Options. (d) In the event that (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death was exercisable immediately prior to the expiration of the options evidenced Effective Time by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectivelyExchange Ratio, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal rounded to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to the contrary in this Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 in the aggregate in respect of its obligations under this subparagraphnearest whole cent.

Stock Options. (i) The Company has granted to the Executive nonqualified stock options (“Options”), having the terms set forth in this Section 2.2, in accordance with the following vesting schedule: Vesting Date October 31, 1996 80,000 October 31, 1997 80,000 October 31, 1998 80,000 (ii) Each of the Options will entitle the Executive to purchase one fully-paid, non-assessable share of the Company’s common stock at a price of $1.61, as adjusted (the “Exercise Price”), and will expire on October 31, 2003. The vested Options will be exercisable by the Executive delivering to the Company a written notice of exercise signed by the Executive, in substantially the form attached hereto as Exhibit A, together with (a) As additional compensation a check payable to the Company in the amount of the total Exercise Price for his services hereunderthe shares being purchased, or (b) a promissory note in substantially the Corporation form attached hereto as Exhibit B in the principal amount of the total Exercise Price, or (c) a check and a promissory note in the aggregate amount of the total Exercise Price. Such promissory note shall grant be secured by a pledge of the shares being purchased with such note pursuant to a Stock Pledge Agreement in substantially the form attached hereto as Exhibit C. In addition, all or any portion of the Exercise Price may be paid by the Executive an option under tendering to the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total of 400,000 Company shares of the Corporation's Company’s common stock that he has owned for at an exercise price per share least six (6) months, duly endorsed for transfer, to be credited against the Exercise Price at the fair market value of such shares on the date of exercise; provided, however, no fractional shares may be so tendered. In the event that the aggregate amount of the check and promissory note, if any, plus the fair market value of the shares of common stock tendered exceeds the total Exercise Price of the Option shares to be purchased (the “Excess Consideration”), the Company shall issue to the Executive or his designee a stock certificate evidencing shares of common stock equal to the closing sale price Excess Consideration divided by the fair market value of the Corporation's common stock as reported by the American Stock Exchange on the date hereofof exercise; provided, however, the Company shall not be obligated to issue any fractional shares to the Executive and the Company shall pay to the Executive an amount of cash equal to the fair market value of any fractional share determined as of the date of exercise. In addition to the above methods of exercise, to the extent permitted under Regulation T of the Federal Reserve Board, and subject to applicable securities laws, an Option may be exercised through a broker in a so-called “cashless exercise” whereby the broker sells the Option shares and delivers cash sales proceeds to the Company in payment of the total Exercise Price plus the amount of taxes and other amounts to be withheld. In addition to and at the time of payment of the Exercise Price, the Company may withhold, or require the Executive to pay to the Company in cash, the amount of any federal, state and local income, employment or other withholding taxes which the Company determines are required to be withheld under federal, state or local law in connection with the terms exercise of an Option; provided, however, that all or any portion of such option required minimum tax obligations (but not any greater amount) may, upon the election of the Executive, be paid by tendering to the Company whole shares of the Company’s common stock duly endorsed for transfer and owned by the Executive, or by authorization to the Company to withhold shares of the Company’s common stock otherwise issuable upon exercise of the Option, in either case in that number of shares of the Company’s common stock having a fair market value on the date of exercise equal to the amount of such taxes thereby being paid. As soon as practicable after exercise of an Option by the Executive, the Company will deliver or cause to be evidenced by (i) one option letter agreement in delivered to the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 Executive certificates or a certificate representing the number of fully paid and non- assessable shares of Common Stockcommon stock of the Company purchased. The Company will not issue fractional shares. Fractional calculations will be rounded up to the nearest number of whole shares. The Executive will be deemed a shareholder of record as of the date of exercise. The Company will at all times reserve and keep available sufficient authorized common stock for the exercise or conversion of all warrants, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock options and other securities it issues. (iii) one option letter agreement Ownership of the Options will be registered on the books of the Company and the Company will be entitled to treat the registered owner as the absolute owner of the Options for all purposes. The registered owner will not be entitled to any of the rights of a shareholder of the Company by virtue of owning Options. No transfer of the Options will be valid unless and until the Company has consented in writing to such transfer and the Company has received an instrument of transfer, in a form satisfactory to the Company and executed by the registered owner or an authorized agent, and the transfer is recorded by the Company. Transfers incident to the death of the Executive shall not require the Company’s approval and the assignee of such Options shall have all rights as the Executive with respect to such Options. (iv) The following adjustments shall apply: (a) If after the date of this Agreement the number of outstanding shares of the Company’s common stock is increased by a stock dividend payable in shares of the Company’s common stock or by a split-up of shares of the common stock, then, on the day following the date fixed for determination of holders of common stock entitled to receive the stock dividend or split-up, the number of shares issuable upon exercise of the Options will be increased in proportion to the increase in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 number of outstanding shares of Common Stock (such option letters being referred to collectively herein as and the "Plan Option Letters")Exercise Price will be correspondingly decreased. (b) The Company represents and warrants that there are sufficient If after the date of this Agreement the number of outstanding shares of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover the ’s common stock is decreased by a combination or reclassification of shares of Common Stock common stock, then, on the day after the effective date of the combination or reclassification, the number of shares issuable to Executive upon exercise of Option Letter A-1the Options will be decreased in proportion to the decrease in the number of outstanding shares and the Exercise Price will be correspondingly increased. (c) In If after the event that date of this Agreement the Company effects any capital reorganization or reclassification of its common stock, or a consolidation or merger with another corporation, or the sale or other transfer of substantially all of its assets to another person or entity, then, as a condition to such transaction, the Company will make fair and lawful provision whereby the registered owner of the Options will have the right to purchase at the Exercise Price, in lieu of voting common stock of the Company's stockholders fail at the next annual meeting , such shares of stockholders stock, securities, or assets as may be issued or payable with respect to or in exchange for a number of outstanding shares of the Corporation Company’s voting common stock equal to approve both (i) an amendment increasing the number of shares available for of the issuance Company voting common stock which the registered owner would be entitled to purchase at the applicable Exercise Price as of options under the Plan effective date of such transaction. The Company will not effect any such transaction unless the resulting successor or purchasing entity (if not the Company) assumes by written instrument the obligation to an amount at least sufficient to cover all deliver the applicable shares of Common Stock issuable upon exercise of Option Letter A-2 and Option Letter B and (ii) appropriate amendments to stock, securities, or assets in accordance with the Plan specifically confirming the right of the Corporation's Board of Directors, in the issuance of stock options under the Plan, to determine provisions regarding terms of the exercise of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employment, the Company agrees, upon receipt of a written demand from Executive, to promptly amend the Plan Option Letters to provide for three non-qualified options outside the Plan having substantially the same terms and provisions of the Plan Stock Optionsforegoing provision. (d) In the event that Within ten (i) the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, (y) by Executive as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to the expiration of the options evidenced by the Plan Option Letters and Executive is required after such event to pay any U.S. federal or state income and withholding tax (collectively, "Income Taxes") on any income recognized by Executive arising upon any exercise of options evidenced by the Plan Option Letters, the Corporation agrees to reimburse Executive the difference between (A) the amount of Income Taxes Executive would have been required to pay had the income recognized on such exercise been treated as a long term capital gain and (B) the amount of Income Taxes payable by Executive in respect of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive shall be determined by assuming that the income recognized as a result of such exercise is taxed at the highest marginal federal and state income tax rates applicable to ordinary income. In addition, the Corporation shall pay Executive an amount equal to the Tax Difference arising in respect of such exercise multiplied by a fraction, the numerator of which is 1 and the denominator of which is equal to 1 minus (i) the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to Executive, in each case in respect of ordinary income, in effect at the time of such exercise. Such amount shall be paid by the Corporation within ninety (9010) days after any such exercise. Notwithstanding anything the Board approves of an event which is likely to cause an adjustment to the contrary in this Agreement or the Plan Option LettersExercise Price, the Corporation shall have no obligation Company will deliver written notice to pay Executive any amount the registered owner of the Options setting forth in excess reasonable detail the facts of $250,000 in the aggregate in respect event and the expected calculation of its obligations under this subparagraphthe adjustment.