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 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 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 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. 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 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. (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. (ai) As additional compensation for his services Promptly following the date the Executive commences employment hereunder, the Corporation Company shall grant to the Executive an option under the Corporation's 1993 Stock Option Plan to purchase Thirty-Seven Thousand, Five Hundred (the "Plan"37,500) to acquire a total of 400,000 shares of the Corporation's common stock of Holdings at an exercise price of Thirty Dollars and Forty-One Cents ($30.41) per share equal share, as determined by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “Option”). The Option and the shares which are subject to the closing sale price Option shall be subject to the terms and conditions, including vesting and forfeiture provisions, of the Corporation's common PTHR Holdings, Inc. 2005 Stock Option Plan, the Amended and Restated Stockholders Agreement of Holdings dated as of January 11, 2006 between Holdings and its stockholders and a stock option certificate, copies of which have been provided to the Executive, and each as reported by the American Stock Exchange on the date hereof, with the terms of such option may be amended from time 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, time. (ii) one option letter agreement in In addition to granting the form annexed Executive the right to purchase common stock of Holdings under Section 4(b)(ii) hereof and granting him the Option, the Company shall offer the Executive the opportunity to purchase on July 1, 2006 or as Exhibit "A-2" hereto soon thereafter as is practical, Sixteen Thousand, Four Hundred and Forty-Two ("Option Letter A-2"16,442) being exercisable for 150,000 shares of Common Stock the common stock of Holdings at a price per share of Thirty Dollars and Forty-One Cents ($30.41), as determined by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, which shares, if the Executive exercises his right to purchase them, may not be sold prior to September 4, 2007. (iii) one option letter agreement Except as provided in accordance with Section 4(b)(ii) and Sections 4(c)(i) and 4(c)(ii), the form annexed Executive shall not be eligible to receive any other stock options, restricted stock or other equity of Holdings, whether under an equity incentive plan or otherwise, except as Exhibit "B" hereto ("expressly authorized for him individually by the Board, or a delegated committee thereof properly charged with the authority to administer such plan, in its discretion. Prior to issuing the Option Letter B") being exercisable for 150,000 shares of Common Stock (such option letters being referred or any other equity 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 Executive, Holdings may require 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 Executive provide such representations 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 ’s sophistication and Executive is required after investment intent and other 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 matters 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 subparagraphHoldings reasonably may request.

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 hereofAugust 4, with the terms of such option to be evidenced by 2006: (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 8,208,706 shares of Company Class A Common Stock and 19,345,782 shares of Company Class B Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Company Common Stock under the applicable Company Benefit Plans that are stock option plans as set forth on Section 2.12(a) of the Company Disclosure Letter (the “Company Stock Option Plans”) (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Option Plans, other than the Company Rights, Company Stock-Based Awards and the Convertible Debt (as defined in Section 2.2(c)), are referred to in this Agreement as “Company 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 Company Class A Common Stock or Class B Common Stock were reserved for future issuance under the Company Purchase Plan, and (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 no shares of Company Class A 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 no shares of Class B Common Stock currently available under were subject to issuance pursuant to outstanding Company Stock-Based Awards. Section 2.2(b) of the Company's 1993 Stock Option Company Disclosure Letter sets forth a list of each outstanding Company Stock-Based Award and Company Option, and (1) the particular Company Benefit Plan (if any) pursuant to which such Company Stock-Based Award or Company Option was granted, (2) 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 name of the Corporation to approve both holder of such Company Stock-Based Award or Company Option, (i3) an amendment increasing the number of shares available for of Company Common Stock subject to such Company Stock-Based Award or Company Option, (4) the exercise price of such Company Stock-Based Award or Company Option, (5) the date on which such Company Stock-Based Award or Company Option was granted, (6) the applicable vesting schedule, and the extent to which such Company Stock-Based Award or Company Option is vested and exercisable, and (7) the date on which such Company Stock-Based Award or Company Option expires. All shares of Company Common Stock subject to issuance of options under the Plan applicable Company Benefit Plans, upon issuance on the terms and conditions specified in the instruments pursuant to an amount at least sufficient to cover all which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. The exercise price of each Company Stock-Based Award and Company Option is no less than the shares fair market value of a share of Company Common Stock issuable upon exercise as determined on the date of Option Letter A-2 grant of such Company Stock-Based Award or Company Option. All grants of Company Stock-Based Awards and Option Letter B Company Options were validly issued and properly approved by the Board of Directors of the Company in material compliance with all applicable Legal Requirements and recorded on the Company Financials (iias defined in Section 2.4(b)) appropriate amendments in accordance with GAAP (as defined in Section 2.4(b)), and no such grants involved any “back dating,” “forward dating” or similar practices with respect to the Plan specifically confirming the right effective date of the Corporation's Board of Directorsgrant. There are no outstanding or authorized stock appreciation, in the issuance of stock options under the Planphantom stock, profit participation or other similar rights or equity based awards with respect 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 set forth 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 2.2(b).

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. 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 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 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 Except for his services hereunder, the Corporation shall grant to Executive an option under the Corporation's 1993 Xoom 1998 Employee Stock Option Purchase Plan (the "PlanXOOM ESPP") ), the Xoom Option Plan pursuant to acquire a total which the Xoom Plan Options were issued, and the Xoom Non-Plan Options (together with the Xoom Plan Options, the "XOOM OPTIONS"), none of 400,000 Xoom, Xenon 2 or any of their respective Subsidiaries has ever adopted or maintained any stock option plan or other plan providing for equity compensation of any person. As of May 9, 1999, Xoom has reserved 3,535,224 shares of the Corporation's common stock at an exercise price per share equal Xoom Stock for issuance pursuant to the closing sale price Xoom ESPP, Xoom Plan Options and Xoom Non-Plan Options, of which 3,336,157 have been issued as of May 9, 1999, of which 2,043,556 shares remain subject to Xoom Plan Options unexercised as of May 9, 1999 and 981,212 shares remain subject to Xoom Non-Plan Options unexercised as of May 9, 1999. Except pursuant to SECTION 6.8 and as reflected on SCHEDULE 4.3(G) none of the Corporation's common stock as reported Xoom Options will be accelerated in any way by the American transactions contemplated by this Agreement. Xoom, Xenon 2 and their respective Subsidiaries have made available to NMC accurate and complete copies of all stock option plans pursuant to which Xoom, Xenon 2 and their respective Subsidiaries have granted stock options that are currently outstanding, the form of all stock option agreements evidencing such options and the applicable vesting schedule for each such option. All shares of Xoom Stock Exchange and Class A Common Stock subject to issuance as aforesaid, upon issuance on the date hereof, with the terms of such option to be evidenced by (i) one option letter agreement and conditions specified in the form annexed instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and non-assessable. Except as Exhibit "A" hereto ("Option Letter A-1"set forth in SCHEDULE 4.3(G) being exercisable for 100,000 shares of Common Stockor as contemplated by this Agreement, (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 no commitments or agreements of Common Stock currently available under any character to which Xoom, Xenon 2 or any of their respective Subsidiaries are bound obligating Xoom, Xenon 2 or any of their respective Subsidiaries to accelerate the Company's 1993 Stock vesting of any Xoom 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 this Agreement. SCHEDULE 4.3(G) lists each outstanding Xoom Option and identifies with respect to each such Xoom Option whether it is a Xoom Plan Option or a Xoom Non-Plan Option; its exercise price; its grant date; its vesting schedule; and what portion of such Xoom Option remains outstanding as of May 9, 1999. Xoom, Xenon 2 and their respective Subsidiaries shall prepare and deliver to NMC an Employer Breach or (zupdated version of SCHEDULE 4.3(G) by the Corporation by reason of the Executive's disability or death prior to the expiration Effective Time as 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 date no earlier than 5 days prior 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) 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. 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) 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 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. 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. 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. (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 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. (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. 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 Except for his services hereunderthe Xoom ESPP, the Corporation shall grant to Executive an option under the Corporation's 1993 Stock Xoom Option Plan ------------- pursuant to which the Xoom Plan Options were issued, and the Xoom Non-Plan Options (together with the Xoom Plan Options, the "PlanXoom Options") to acquire a total ), neither Xoom ------------ nor any of 400,000 its Subsidiaries has ever adopted or maintained any stock option plan or other plan providing for equity compensation of any person. Xoom has reserved 3,535,224 shares of the Corporation's common stock at an exercise price per share equal Xoom Stock for issuance pursuant to the closing sale price Xoom ESPP, Xoom Plan Options and Xoom Non-Plan Options, of the Corporation's common stock which 3,336,157 have been issued as reported by the American Stock Exchange on of the date hereof, with of which 2,043,556 shares remain subject to Xoom Plan Options unexercised as of the date hereof and 981,212 shares remain subject to Xoom Non-Plan Options unexercised as of the date hereof. Except pursuant to Section 6.8 and as reflected on Schedule 4.2(g) none of the Xoom Options will be ----------- --------------- accelerated in any way by the transactions contemplated by this Agreement. Xoom and its Subsidiaries have made available to CNET accurate and complete copies of all stock option plans pursuant to which Xoom and its Subsidiaries have granted stock options that are currently outstanding, the form of all stock option agreements evidencing such options and the applicable vesting schedule for each such option. All shares of Xoom Stock subject to issuance as aforesaid, upon issuance on the terms of such option to be evidenced by (i) one option letter agreement and conditions specified in the form annexed instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and non-assessable. Except as Exhibit "A" hereto ("Option Letter A-1"set forth in Schedule 4.2(g) being exercisable for 100,000 shares of Common Stockor as contemplated by --------------- this Agreement, (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 no commitments or agreements of Common Stock currently available under any character to which Xoom or any of its Subsidiaries are bound obligating Xoom or any of its Subsidiaries to accelerate the Company's 1993 Stock vesting of any Xoom 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 this Agreement. Schedule 4.2(g) lists each outstanding Xoom Option and identifies -------------- with respect to each such Xoom Option whether it is a Xoom Plan Option or (z) by the Corporation by reason a Xoom Non-Plan Option; its exercise price; its grant date; its vesting schedule; and what portion of such Xoom Option remains outstanding as of the Executive's disability or death date hereof. Xoom and its Subsidiaries shall prepare and deliver to CNET an updated version of Schedule 4.2(g) prior to the expiration Effective Time as 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 date no earlier than 5 days --------------- prior 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, 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. (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 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 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 hereof (the "Transfer Date"), the Corporation BWI shall grant to Executive an option under the CorporationEmployee pursuant to BWI's 1993 Stock Option and Incentive Plan (the "Plan") an option to acquire a total of 400,000 purchase 25,000 shares of common stock, par value of $.01 per share, of BWI (the Corporation's common stock at an exercise price per share equal to the closing sale price "BWI Common Stock"). On each of the Corporation's common stock as reported by the American Stock Exchange on first, second, and third anniversaries of the date hereof, with BWI shall grant to Employee under the terms of such Plan (or any successor plan) 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 25,000 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 BWI Common Stock (such option letters being the total options to which Employee is entitled under this Section 1.1.4 shall be referred to collectively herein as the "Options"). The exercise price for the Options shall be the fair market value of BWI Common Stock on the respective grant dates and each of the Options shall vest 25% on each of the first four (4) anniversaries of the respective grant dates. To the maximum extent permissible, the Options shall be incentive stock options. The other terms of the Options shall be as set forth in the grant letters attached hereto as Exhibit A-1 and Exhibit A-2. BWI agrees to continue to register the BWI Common Stock issuable upon the exercise of Options granted under the Plan Option Letters"on Form S-8 (or any successor form). (b) The Company represents and warrants In the event that there are sufficient shares of changes in the BWI Common Stock currently available under of the Company's 1993 Stock Option type described by Section 10 of the Plan (occur prior to any of the "1993 Plan") anniversaries of the date hereof, the number and kind of securities as to cover which BWI shall thereafter be obligated to grant an option or options to the shares Employee pursuant to this Section 1.1.4 shall be adjusted as appropriate as contemplated by Section 10 of the Plan as if such options had already been granted to the Employee prior to the date of such change in the BWI Common Stock issuable to Executive upon exercise of Option Letter A-1Stock. (c) In the event BWI's obligations to issue options under this Section 1.1.4 are an integral part of this Agreement and BWI agrees never to assert that the Company's stockholders fail at the next annual meeting general disclaimer of stockholders Section 14 of the Corporation Plan to approve both (i) an amendment increasing the number of effect that BWI shall not bind itself to award shares available for the issuance of options under the Plan invalidates or limits in any way BWI's obligations 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 Employee under this subparagraphSection 1.1.4.

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 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 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. 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 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 hereunderAt the Effective Time, 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 Buyer will assume the Company's 1993 Stock Option Plan (the "1993 and Incentive 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 1998 Incentive Stock Plan, and the next annual meeting of stockholders OSB Financial Corp. 1992 Stock Option and Incentive Plan (collectively, the "Option Plans") and all of the Corporation Company's obligations thereunder. At the Effective Time, each outstanding option issued pursuant to approve both the Option Plans shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such option (i) an amendment increasing including, without limitation, the time periods allowed for exercise), a number of shares of Buyer Common Stock equal to the product of the Exchange Ratio and the number of shares available of Company Common Stock subject to such option (provided that any fractional shares of Buyer Common Stock resulting from such multiplication shall be rounded up to the nearest share), at a price per share (rounded down to the nearest cent) equal to the exercise price per share of the shares of Company Common Stock subject to such option divided by the Exchange Ratio. The duration and other terms of the new option shall be the same as the original option, except that all references to the Company shall be deemed to be references to the Buyer. The Buyer agrees to take all corporate action necessary to reserve for the issuance a sufficient number of shares of Buyer Common Stock for delivery upon exercise of options under the Plan Option Plans assumed by the Buyer in accordance with this Agreement. (b) Within ten (10) days after the Effective Time, the Buyer shall, to the extent necessary, file with the SEC a registration statement on an amount at least sufficient appropriate form under the Securities Act with respect 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 5.7(a) hereof, and Option Letter B and (ii) appropriate amendments shall use its best efforts to maintain the Plan specifically confirming the right current status of the Corporation's Board of Directorsprospectus related thereto, 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. (a) 11.1 As additional compensation for his services hereunderan inducement to Employee to enter into this Agreement the Company hereby grants, as of the Corporation shall grant date of this Agreement, to Executive an option under Employee options to purchase shares of the Corporation's 1993 Company’s Common Stock, $.001 par value, as follows: Subject to the terms and conditions of the Company’s 2000 Employees’ Stock Option Plan (the "“Plan") ”), and the terms and conditions set forth in the Stock Option Agreement which are incorporated herein by reference, the Employee is hereby granted options to acquire a total of purchase 400,000 shares of the Corporation's common stock Company’s Common Stock, of which options to purchase 100,000 shares shall vest on the date of this Agreement and the balance of 300,000 options shall vest monthly, as long as Employee continues to be an employee of the Company but subject to Section 11.2 hereto, at an the rate of 12,500 per month (the “Options”). The exercise price per share equal to the closing sale price of the Corporation's Options shall be the fair market value per share of the Company’s Common Stock as of the date of grant and shall contain such other terms and conditions as set forth in the stock option agreement. The foregoing Options shall be qualified as incentive stock options to the maximum as allowed by law. The Options provided for herein are not transferable by Employee and shall be exercised only by Employee, or by his legal representative or executor, as provided in the Plan. Such Options shall terminate as provided in the Plan, except as otherwise modified by this Agreement. 11.2 In the event of a termination of Employee’s employment with the Company pursuant to Section 9.1(c) or by the Employee for Good Reason, notwithstanding anything herein or in any stock option agreement to the contrary, (a) the Employee’s right to purchase shares of Common Stock of the Company pursuant to any stock option or stock option plan shall immediately fully vest and become exercisable, (b) the exercise period in which Employee may exercise his options to purchase Company common stock shall be extended to the duration of their original term (as reported by if Employee remained an employee of the American Stock Exchange on the date hereofCompany), with and the terms of such option options shall be deemed amended to take into account the foregoing provisions. In the event of a termination of Employee’s employment with the Company pursuant to Section 9.1(b), options granted and not exercised as of the Termination Date shall terminate immediately and be evidenced by null and void. In the event of a termination of Employee’s employment with the Company due to the Employee’s death, or Disability, the Employee’s (ior his estate’s or legal representative’s) 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 right to purchase shares of Common Stock and (iii) one of the Company pursuant to any stock option letter agreement in or stock option plan to the form annexed extent vested as Exhibit "B" hereto ("Option Letter B") being of the Termination Date shall remain exercisable for 150,000 a period of twelve (12) months following the Termination Date, but in no event after the expiration of the exercise period. In the event of a termination of Employee’s employment with the Company by the Employee other than for Good Reason, the Employee’s right to purchase 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 Company pursuant 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 any stock option or stock option plan to the Plan specifically confirming the right extent vested as 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 Termination Date shall remain exercisable for a period of exercisability of stock options under three months following the Plan upon termination of employment for cause or without cause) and provisions regarding forfeiture of stock options under the Plan upon termination of employmentTermination Date, 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 but in no 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 after 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 subparagraphperiod.

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) 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. 11.1 As an inducement to Employee to enter into this Agreement, the Company hereby grants to Employee options to purchase 150,000 shares of the Company’s Common Stock, $.001 par value (the “Options”), subject to the terms and conditions of this Agreement, and the terms and conditions of the Company’s 2006 Long Term Incentive Plan (the “Plan”), and the Stock Option Agreement, which are incorporated herein by reference. The Options shall be qualified as incentive stock options to the extent permitted by law. 11.2 Provided Employee is an employee of the Company on the vesting date, and unless otherwise provided by this Agreement, the Options shall vest as follows: (a) As additional compensation 50,000 Options on the Commencement Date; (b) 50,000 Options if the Closing Price of the Company’s Common Stock equals or exceeds $3.00 per share for his services hereunderten consecutive trading days; and (c) 50,000 Options if the Closing Price of the Company’s Common Stock equals or exceeds $5.00 per share for ten consecutive trading days. The Options, to the extent vested, shall be exercisable for a period of ten years from the date of this Agreement (the “Exercise Period”). 11.3 The Closing Price of a share of Common Stock shall mean (i) if the Common Stock is traded on a national securities exchange or on the Nasdaq Stock Market (“Nasdaq”), the 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 per share closing price of the Corporation's common stock at an exercise Common Stock shall be the reported closing price the principal securities exchange on which they are listed or on Nasdaq, as the case may be, on the date of determination (or if there is no closing price for such date of determination, then the last preceding business day on which there was a closing price); or (ii) if the Common Stock is traded in the over-the-counter market but bid quotations are not published on Nasdaq, the closing bid price per share equal to for the Common Stock as furnished by a broker-dealer which regularly furnishes price quotations for the Common Stock; provided, however, that in the event of a Change in Control, the closing sale price shall be the “Change in Control Price” as defined in the Plan. 11.4 The exercise price of the Corporation's common stock as reported by Options shall be equal to Fair Market Value of the American Company’s Common Stock Exchange on the date hereofthis Agreement is fully executed as determined under the Plan, and shall contain such other terms and conditions as set forth in the stock option agreement. The Options provided for herein are not transferable by Employee and shall be exercised only by Employee, or by his legal representative or executor, as provided in the Plan. Such Options shall terminate as provided in the Plan, except as otherwise modified by this Agreement or the stock option agreement. 11.5 In the event of a termination of Employee’s employment with the terms Company: (a) pursuant to Section 9.1(a), options granted and not exercised as of such option the Termination Date shall terminate immediately and be null and void; (b) due to be evidenced by the Employee’s death, or Disability, the Employee’s (ior his estate’s or legal representative’s) 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 right to purchase shares of Common Stock and of the Company pursuant to any stock option or stock option plan to the extent vested as of the Termination Date shall remain exercisable in accordance with the Plan, but in no event after the expiration of the Exercise Period; (iiic) one option letter agreement in by the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable Employee other than for 150,000 Good Reason, Employee’s right to purchase 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 Company pursuant 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 any stock option or stock option plan to the Plan specifically confirming the right extent vested as of the Corporation's Board of Directors, Termination Date shall remain exercisable in the issuance of stock options under accordance with the Plan, to determine provisions regarding terms but in no event after the expiration 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.Exercise Period; and (d) In 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 of Employee’s termination by the Corporation is terminated (x) Company without Cause or by the Corporation Employee for any reason other than for CauseGood Reason, (y) by Executive options vested as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to Termination Date shall remain exercisable in accordance with the Plan, but in no event after the expiration of the Exercise Period (it being agreed and acknowledged that unvested options evidenced by shall be void immediately upon 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 occurrence of such exercise (the amount of such difference being referred to as the "Tax Difference" in respect of such exercisea termination event). 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 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. (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. (a) As additional compensation for his services hereunderSubject to the approval of the Board of Directors or the Marchex 2003 Stock Incentive Plan Administrator, the Corporation shall grant to Executive will be granted an option under the Corporation's 1993 Stock Option Plan to purchase three hundred fifty thousand (the "Plan"350,000) to acquire a total of 400,000 shares of the Corporation's common stock of Marchex, subject to the terms and conditions of the Marchex 2003 Stock Incentive Plan, (“Option 1”). Options granted pursuant to Option 1 shall be designated as indicated on Exhibit A-1 as either incentive stock options (“ISO”) meeting the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or non-qualified options (“NQ”) which are not intended to meet the requirements of such Section 422 of the Code. Options granted pursuant to Option 1 shall vest according to the schedule indicated on Exhibit A-1. The exercise price of Option 1 shall be three dollars ($3.00) per share. Subject to the approval of the Board of Directors or the Marchex 2003 Stock Incentive Plan Administrator, Executive will also be granted an option to purchase one hundred thousand (100,000) shares of Marchex’s common stock, subject to the terms and conditions of the Marchex 2003 Stock Incentive Plan (“Option 2”) and effective upon the earliest of (i) the first anniversary of the Effective Date and (ii) the closing of Marchex’s initial public offering. Options granted pursuant to Option 2 shall be designated as NQ and shall vest according to the schedule attached as Exhibit A-2. The exercise price of Option 2 shall be the fair market value of such common stock at an exercise the time the option is granted or the price per share equal to the closing sale price per share offered and sold to the public pursuant to an effective registration statement prepared in accordance with the Securities Act of the Corporation's common stock 1933, as reported amended, as determined 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) Board. In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation to approve both either (i) an amendment increasing the number of shares available ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ceases to be a Marchex employee 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) any reason or (ii) Executive's employment a Change in Control (as defined below) occurs while Executive is employed by the Corporation is terminated (x) by the Corporation for any reason Marchex, all options or other than for Cause, (y) equity awards held by Executive as with respect to Marchex common stock shall become fully vested. For purposes of this subsection, a result “Change in Control” shall be deemed to have occurred upon the acquisition of an Employer Breach or beneficial ownership of greater than fifty percent (z50%) by the Corporation by reason of the Executive's disability or death prior to the expiration combined voting power of the then-outstanding shares of Marchex common stock entitled to vote generally in the election of directors by any individual, entity or group, but excluding for this purpose any such acquisition by Marchex or any corporation controlled by Marchex. With respect to any grants of capital stock, which shall include grants of options 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 (collectivelypurchase shares of capital stock of Marchex, "Income Taxes") on any income recognized received by Executive arising upon any exercise from Marchex, Executive agrees that the investigation 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 tax consequences of such exercise (the amount a grant 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 capital stock or options and the denominator implementation of which is equal a plan to 1 minus (i) provide for such consequences are solely the highest marginal federal income tax rate (currently 39.6%) and (ii) the highest marginal state income tax rate applicable to responsibility of 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 Marchex shall have no obligation responsibility, legal, financial or otherwise, with regards to pay Executive any amount in excess tax consequences of $250,000 in the aggregate in respect of its obligations under this subparagraphany stock or options granted by Marchex to Executive.

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. 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. If (and only if) the Merger is consummated, the Purchaser shall grant certain stock options as follows: (a) As additional compensation In the event the Surviving Corporation achieves during the year ended December 31, 1997 one hundred twenty-five percent (125%) of the revenues projected for his services hereunderthe Company in the projections set forth in Schedule 7.3 for such year, on or before May 31, 1998 the Corporation Purchaser shall grant to Executive an option those of the persons listed in Schedule 7.3 who have been employed continuously since the date hereof and remain employees of the Surviving Corporation as of the date of such grant (each, a "1997 Eligible Optionee") options under the CorporationPurchaser's 1993 1995 Employees' Incentive Stock Option Plan to purchase shares of the Purchaser's Class B Common Stock (the "Plan1997 Options") to acquire a total of 400,000 shares of the Corporation's common stock in amounts determined as provided below in this Section 7.3(a), at an exercise price per share equal to the closing sale price fair market value per share of the CorporationPurchaser's common stock as reported by the American Class B Common Stock Exchange on the date hereofsuch options are granted, with as determined in good faith by the terms Purchaser's board of such option to directors. The aggregate number of shares purchasable under the 1997 Options shall be evidenced by 82,500. The 1997 Options shall be allocated among the 1997 Eligible Optionees as follows: (i) one option letter agreement in the form annexed Purchaser shall grant 1997 Options to purchase up to an aggregate of 41,250 shares by granting to each 1997 Eligible Optionee a 1997 Option to purchase the number of shares set forth adjacent to such Eligible Optionee's name on Schedule 7.3 as Exhibit "A" hereto (1997 Options"Option Letter A-1") being exercisable for 100,000 shares of Common Stock, ; and (ii) one option letter agreement in the form annexed Purchaser shall grant 1997 Options to purchase up to an additional aggregate number of shares equal to 82,500 minus the number of shares purchasable under options granted under Section 7.3(a)(i) by granting to each 1997 Eligible Optionee a 1997 Option to purchase such additional number of shares (if any) as Exhibit "A-2" hereto is recommended to the Purchaser's board of directors by those persons who are directors of the Company on the date hereof and who are employees of the Surviving Corporation at the time the 1997 Options are granted ("Option Letter A-2"or such additional number of shares (if any) being exercisable for 150,000 shares as is determined by the board of Common Stock and (iii) one option letter agreement in directors of the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares Purchaser, if no such persons are then employees of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"Surviving Corporation). (b) The In the event the Surviving Corporation achieves during the year ended December 31, 1998 one hundred twenty-five percent (125%) of the revenues projected for the Company represents in the projections set forth in Schedule 7.3 for such year, on or before May 31, 1999 the Purchaser shall grant to those of the persons listed in Schedule 7.3 who have been employed continuously since the date hereof and warrants that there are sufficient shares remain employees of Common Stock currently available the Surviving Corporation as of the date of such grant (each, a "1998 Eligible Optionee") options under the CompanyPurchaser's 1993 1995 Employees' Incentive Stock Option Plan to purchase shares of the Purchaser's Class B Common Stock (the "1993 Plan1998 Options") in amounts determined as provided below in this Section 7.3(b), at an exercise price per share equal to cover the shares fair market value per share of the Purchaser's Class B Common Stock issuable on the date such options are granted, as determined in good faith by the Purchaser's board of directors. The aggregate number of shares purchasable under the 1998 Options shall be 82,500. The 1998 Options shall be allocated among the 1998 Eligible Optionees as follows: (i) the Purchaser shall grant 1998 Options to Executive upon exercise purchase up to an aggregate of 41,250 shares by granting to each 1998 Eligible Optionee a 1998 Option Letter A-1to purchase the number of shares set forth adjacent to such Eligible Optionee's name on Schedule 7.3 as "1998 Options"; and (ii) the Purchaser shall grant 1998 Options to purchase up to an additional aggregate number of shares equal to 82,500 minus the number of shares purchasable under options granted under Section 7.3(b)(i) by granting to each 1998 Eligible Optionee a 1998 Option to purchase such additional number of shares (if any) as is recommended to the Purchaser's board of directors by those persons who are directors of the Company on the date hereof and who are employees of the Surviving Corporation at the time the 1998 Options are granted (or such additional number of shares (if any) as is determined by the board of directors of the Purchaser, if no such persons are then employees of the Surviving Corporation). (c) In the event that the CompanyPurchaser takes any action inconsistent with the assumptions underlying and expressed in the projections set forth in Schedule 7.3 which reasonably could be expected to affect the Surviving Corporation's stockholders fail at the next annual meeting of stockholders achievement of the Corporation to approve both revenue projections specified in subsections (ia) 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 (iib) 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 limitationabove, the period Purchaser and the Management Shareholders (except any no longer employed by the Surviving Corporation) shall negotiate in good faith appropriate corresponding adjustments to such revenue projections in order to maintain their relative likelihood 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 Optionsachievement. (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 All share amounts 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 prices referred to as the "Tax Difference" above in respect of such exercise). In computing the Tax Difference, the amount of taxes payable by Executive this Section 7.3 shall be determined by assuming that the income recognized as a result subject to corresponding proportionate adjustments to reflect any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange 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 subparagraphshares.

Stock Options. (a) As additional compensation for his services hereunder, Key employees of the Corporation shall grant Company will be eligible to Executive an option under ------------- participate in the Corporation's 1993 Stock Option 1997 Equity Incentive Plan (the "Equity Incentive Plan") of Details Holdings Corp. (or, if applicable, its parent corporation) ("Details Holdings"), and in connection therewith to receive restricted shares of and/or options to acquire, Details Holdings' Class A-5 Common Stock, in each case subject to the vesting and other terms specified in the applicable Option Agreement and the Equity Incentive Plan. Details Holdings' intends that options to acquire a total an aggregate of 400,000 24,062.45 shares of Class A-5 Common Stock, representing 1.25% of the Corporationcurrently outstanding Class A Common Stock, will be made available to the Company's common stock employees (including ▇▇▇▇▇▇▇▇, as described below) under the Equity Incentive Plan, divided equally between options exercisable at $5.00 per share and options exercisable at $61.17 per share, it being understood that each employee will be given the opportunity to purchase Restricted Stock (as defined in the 1997 Equity Incentive Plan) for a purchase price of $5.00 per share in lieu of receiving options exercisable for $5.00 per share. Each employee, as a condition to receiving Restricted Stock or options under the Equity Incentive Plan, will be required to become party, as an "Employee" (or if designated as such by the Company, a "Manager"), to the Stockholders Agreement dated as of October 28, 1997 among Details Holdings and its stockholders, as amended and otherwise modified from time to time. Following the Effective Date, Details Holdings shall ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ the option to purchase up to 9,023.25 shares of Details Holdings' Class A-5 Common Stock (which shall be Restricted Stock (as defined in the Equity Incentive Plan)) at a purchase price of $5.00 per share, and will receive options to purchase up to 9,023.25 shares of Details Holdings' Class A-5 Common Stock, at an exercise price of $61.17 per share share. The shares of Restricted Stock and options will vest in equal monthly installments over a four-year period from the Effective Date, and will be subject 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 and conditions set forth 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 "1997 Equity Incentive 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%) Option Agreement between Details Holdings 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 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 for his services hereunder, the Corporation shall grant Executive will be eligible to Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") be granted options to acquire a total of 400,000 purchase up to 100,000 shares of the Corporation's Taleo common stock at an the discretion of the Board, based upon Executive achieving the performance goals for a fiscal year. (i) Any stock option will be for such number of shares of Taleo Class A common stock as determined by the Compensation Committee of the Board (the “Stock Option”). Any Stock Option will have a per-share exercise price per share equal to the closing sale price fair market value of the Corporation's common stock as reported by the American Stock Exchange a share on the date hereofof grant, will vest over a 4-year period, with 25% of the terms shares vesting on the first anniversary of the Effective Date, and 1/48th of the total shares vesting monthly thereafter, or at such option other vesting schedule as determined by the Board, subject to be evidenced by Executive continuing to remain a “Service Provider” (i) one option letter agreement as defined in the form annexed as Exhibit "A" hereto ("Company’s 1999 Stock Plan, the “Option Letter A-1"Plan”) being exercisable for 100,000 shares of Common Stock, to the Company on each vesting date; (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto Any Stock Option shall have ("Option Letter A-2"x) being exercisable for 150,000 shares of Common Stock a ten-year maximum term, and (iiiy) 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 otherwise have the same terms and conditions as stock options held by other senior executives of the Company, subject to Section 6. Any Stock Option granted to Executive may be exercised (a) with cash, (b) with previously owned Taleo common shares and/or (c) if Taleo’s stock is publicly traded and it is legally permissible, via a “cashless exercise” program in which payment may be made all or in part by delivery of an irrevocable direction to a securities broker to sell common shares and to deliver all or part of the sale proceeds to Taleo in payment of the aggregate option exercise and any applicable tax withholding obligations relating to the exercised option. In the event of any conflict in the express terms between this Agreement and the Option Plan and any Stock Option agreement executed by and between Executive and the Company, the express terms of this Agreement shall prevail and govern. Subject to the preceding provisions of this Section 3(c), a Stock Option will be subject to the terms, definitions and provisions of the Option Plan Stock Optionsand the stock option agreements by and between the Executive and the Company (the “Option Agreement”), all of which documents are incorporated herein by reference. (diii) 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) The Stock Options currently held by Executive are attached hereto 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.Exhibit A.

Stock Options. (a) As additional compensation for his services hereunder, The Company confirms the Corporation shall grant to Executive an option under the Corporation's 1993 Stock Option Plan (the "Plan") Executive, effective as of April 1, 2001, of options to acquire a total of 400,000 purchase 150,000 shares of the Corporation's common stock at an exercise price per share equal to the closing sale price market value of the CorporationCompany's common stock as reported by on April 1, 2001, under the American Stock Exchange on terms of the date hereofexisting stock option plan, with the terms of such option to be evidenced by (i) one option letter agreement modifications set forth in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common StockSection 2.3(c)(i), (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 below. In addition, as of April 1 of each year during the form annexed as Exhibit "B" hereto term of this Agreement ("Option Letter B") being exercisable for or the next business day if April 1 of any year is not a business day), the Company shall issue options to purchase not fewer than 150,000 shares of Common Stock common stock of the Company (such adjusted appropriately for any stock dividend, stock split, spin-off, reorganization, or similar transaction), under a new stock option letters being referred to collectively herein as plan, the "Plan Option Letters"terms of which are described in Section 2.3(c). (b) The Company represents During the term of this Agreement 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 thereafter so long as any stock option granted to Executive upon exercise of Option Letter A-1. by the Company remains outstanding (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 whether such stock options (including without limitation, option was granted prior to or after the period date 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 employmentthis Agreement), the Company agrees, upon receipt of a written demand from Executive, shall loan 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 aggregate exercise price of any such stock option, with such loan to be made upon Executive's giving of notice to the Company that he is exercising a stock option and desires to have the Company loan to him the exercise price of such stock option. Any such loan shall be on a full recourse basis, shall be payable within 60 days, and shall be on such other terms as are reasonably acceptable to Executive but that in any event are no more favorable to Executive than would be available to Executive from an unrelated third party. The proceeds from any such loan shall be used to pay the exercise multiplied by a fractionprice of the pertinent stock options. (c) Upon the execution of this Agreement, the numerator Company shall execute and deliver to Executive the Amendment to Stock Options in the form of which is 1 and the denominator of which is equal Exhibit B in order to 1 minus cause Executive's existing stock options to be amended to provide as follows: (i) the highest marginal federal income tax rate (currently 39.6%) allow assignment of options to family members and charitable organizations; (ii) require registration of the highest marginal state income tax rate applicable stock on a Form S-8 and require the Company to Executiveprovide a Form S-3 for resales, if needed for Executive to be able to resell freely stock acquired upon the exercise of stock options; (iii) give Executive the right to pay the option exercise price with shares which have been held by Executive for at least six months or with the surrender of stock options. The terms of the new stock option plan shall be substantially the same as apply in each case the existing stock option plan, except that the new stock option plan shall include the provisions described in respect clauses (i), (ii), and (iii) above, shall provide for immediate vesting of ordinary incomeall options upon death or Total Disability (as defined below), in effect at and shall provide that, if Executive remains employed by the time Company through March 13, 2004, or if, prior to March 14, 2004, Executive is terminated without Cause, Executive terminates his employment for Good Reason, or Executive dies or becomes Totally Disabled, then the expiration date for exercise of such exercise. Such amount stock options shall be paid by a date not earlier than ten years from the Corporation within ninety (90) days after any such exercise. Notwithstanding anything to date of grant of 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 subparagraphstock option.

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. (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, Employee shall be granted the Corporation shall grant option to Executive purchase an option under the Corporation's 1993 Stock Option Plan (the "Plan") to acquire a total aggregate of 400,000 25,000 shares of the Corporation's Class B common stock at an exercise price per share equal of Employer. The options shall be automatically converted to options to purchase Class A common stock (voting common stock) convertible upon the closing sale price of the Corporation's common stock as reported by the American Stock Exchange on Employer of an initial public offering which results in no less than $10,000,000 in capital being raised by the date hereof, with the terms of Employer which shall be a gross amount prior to expenses or commissions (hereinafter 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 offering is referred to collectively herein as the "Plan Option LettersInitial Public Offering"). In the event options have been exercised by the Employee prior to the Initial Public Offering, Employee's shares of Class B common stock shall be automatically converted to Class A common stock. The Employer's options are more particularly described in this paragraph 6, (and all references herein to common stock shall mean the non-voting Class B common stock). (a) Employee shall be granted the option to purchase 15,000 shares of common stock of the Employer at a price of $7.20 per share, with these options to vest and become exercisable as follows: In the event the Employee is still employed by the Employer on July 1, 1997, options to purchase 5,000 shares of the common stock of the Employer shall vest in the Employee and become exercisable; in the event the Employee is still employed by the Employer at January 1, 1998, options with respect to an additional 5,000 shares of common stock of the Employer shall vest in the Employee and become exercisable; and in the event the Employee is still employed by the Employer at July 1, 1998, options with respect to an additional 5,000 shares of common stock of the Employer shall vest in the Employee and become exercisable. After the vesting of options, the Employee shall have the right to exercise options with respect to those shares that shall have vested, all as set forth in the stock option agreement attached hereto as Exhibit A. (b) The Company represents and warrants that there are sufficient In addition to the stock options set forth in paragraph 6(a) above (relating to 15,000 shares of Common Stock currently available under stock), the Company's 1993 Stock Option Plan (the "1993 Plan") Employee shall be granted options to cover the purchase a further 10,000 shares of Common Stock issuable common stock of the Employer at the price of $7.20 per share, with such options to Executive upon exercise vest and be subject to the contingencies set forth in this section 6(b): (i) During the period between the date of Option Letter A-1this Agreement and April 30, 1997, Employer and Employee shall negotiate in good faith with respect to setting certain performance criteria which, if fulfilled, would result in the Employee having the option to purchase a further 5,000 shares of the common stock of the Employer, which shall vest in the Employee in the event the criteria established by the parties shall have been fulfilled and in the event Employee shall have continuously been an employee of the Company for the two-year term of this Agreement ending at December 31, 1998. (ii) In addition, the performance criteria to be negotiated as set forth in paragraph 6(b) (i) shall include performance criteria for options to purchase a further 5,000 shares of the common stock of the Employer which shall vest at December 31, 1999, and shall be conditional on the Employee having been continuously employed by Employer for the approximately three-year period ending December 31, 1999, and the performance criteria for the vesting of such options having been fulfilled. (c) In The performance criteria referred to in this Agreement shall be set forth in writing promptly following any agreement with respect to such criteria. For purposes of this Agreement, the event Employee shall be deemed to have been continuously employed by the Employer during a period, provided that his employment has not been terminated by the CompanyEmployer, or he has not terminated his employment voluntarily; provided, however, the Employee's stockholders fail at the next annual meeting of stockholders employment shall be deemed terminated as of the Corporation date of his death or his total and permanent disability, which shall mean his inability to approve both (i) an amendment increasing the number of shares available perform services 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 Employer for a continuous 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 Options120 days. (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 Agreement, in the event the Employer is acquired by or merged into any other entity, or in the event there is, in a single transaction, a sale of more than 25% of the outstanding capital stock of the Employer, then all options granted to Employee pursuant to paragraph 6(a) and (b) above shall vest immediately in Employee at the time of the merger, acquisition or change of stock ownership; provided, however, that there shall be no accelerated vesting hereunder as a result of (i) the contemplated private placement of capital stock of the Employer pursuant to which the Employer is seeking $20 million from a party introduced by ▇▇▇▇▇, ▇▇▇▇▇▇, or (ii) the sale of capital stock of Employer in the Initial Public Offering. For purposes of determining whether more than 25% of the outstanding capital stock of Employer is sold, this criterion shall be deemed to have been satisfied if after the transaction in question, the owner or owner(s) who acquired capital stock in the new transaction own more than 25% of the capital stock of the Employer, counting only the stock acquired in such transaction. (e) Employer agrees that upon the consummation of its Initial Public Offering of capital stock, it will take necessary steps, including the filing of form S-8, to register the stock of optionees such as Employee, subject, however, to the approval and regulations of any underwriter (who shall be entitled to nullify such registration rights for a particular offering if it determines, in good faith, that such rights would adversely affect the market for Employer's stock or the Plan Option LettersEmployer's ability to register and sell its stock). In the event that the registration contemplated in the preceding sentence is not possible, Employer agrees that after its Initial Public Offering of capital stock, it will grant Employee the right, subject to the reasonable regulations of any underwriter (who shall be entitled to nullify the piggyback registration rights for a particular offering if it determines, in good faith, that such rights would adversely affect the Employer's ability to register and sell its stock), piggyback registration rights so Employee can exercise some or all of his options and thereafter immediately sell the shares of common stock of the Employee underlying his options in the public market. Such piggyback registrations shall require the Employee to pay any underwriting commissions or discounts in connection with the sale by the Employee of his shares, and no more than two piggyback registrations shall be available to the Employee hereunder. Notwithstanding the foregoing, in the event the option shares should become freely tradeable pursuant to any exemption available under the rules and regulations of the Securities and Exchange Commission, the Corporation piggyback registrations hereunder shall have no obligation longer be available to pay Executive any amount Employee. The Employee shall, in excess connection with either of $250,000 in the aggregate in respect above contemplated methods of its obligations under this subparagraphregistration, also comply with the reasonable requirements of the Employer and all the rules and regulations of the Securities and Exchange Commission.

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. (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 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. (ai) As additional compensation for his services hereunderDuring the Term, the Corporation Executive shall grant be eligible to be granted Options at such time(s) and in such amount(s) as may be determined by the Committee in its sole discretion; provided, that the Executive an shall be granted such Options in accordance with the Company's customary past practice unless the Committee determines in its good faith discretion that the amount or timing of such Option grants shall be revised based upon the Executive's performance. (ii) In addition to any Options granted in accordance with subsection (i), as of July 1, 2003 the Executive shall be granted a non-qualified stock option under the Corporation's 1993 Stock Option Plan (the "PlanRetention 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 purchase 111,111 shares of Common Stock, (ii) one option letter agreement pursuant to the terms and conditions of the Stock Incentive Plan and a written Retention Stock Option Agreement to be entered into by and between the Company and Executive as of the date hereof in substantially the form annexed attached hereto as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares A. The Retention Options shall have an exercise price equal to the fair market value per share of Common Stock as of July 1, 2003 and (iii) one option letter agreement shall have a term of 10 years. The Retention Options shall become exercisable in the form annexed three cumulative installments 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").follows: (bA) The Company represents and warrants that there are sufficient shares the first installment shall consist of Common Stock currently available under the Company's 1993 Stock Option Plan (the "1993 Plan") to cover 15% of the shares of Common Stock issuable to Executive upon exercise covered by the Retention Options and shall become vested and exercisable on July 1, 2006; (B) the second installment shall consist of Option Letter A-1. (c) In the event that the Company's stockholders fail at the next annual meeting 15% 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 covered by the Retention Options and Option Letter B shall become vested and exercisable on July 1, 2007 and (iiC) appropriate amendments to the Plan specifically confirming the right third installment shall consist of 70% of the Corporation's Board shares of DirectorsCommon Stock covered by the Retention Options and shall become exercisable on July 1, 2008; provided, that, except as otherwise provided in Section 7 or in the issuance of stock options under the PlanRetention Stock Option Agreement, to determine provisions regarding terms no portion of the exercise of such stock options (including without limitation, Retention Options not then exercisable shall become exercisable following the period of exercisability of stock options under the Plan upon Executive's 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) any reason. In the event that (i) of the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) or (ii) Executive's termination of employment by the Corporation is terminated (x) by the Corporation for any reason other than for Cause, the Retention Options to the extent then exercisable shall remain exercisable until the earlier of (x) the date provided in the Retention Stock Option Agreement or (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 hereunderAt the Merger Date, the Corporation shall grant each option to Executive an option purchase shares of Welkin Stock pursuant to stock options ("Welkin Options") granted by Welkin under the Corporation's 1993 Incentive Stock Option Plan of 1988 of Welkin Associates, Ltd. (the "'Welkin Stock Option Plan") '), which are outstanding at the Merger Date, 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 hereofNichols Stock, and Nichol▇ ▇▇▇▇▇ assume each W▇▇▇▇▇ ▇ption in accordance with the terms of such the Welkin Stock Option Plan and stock option to be evidenced or other agreement by which it is evidenced, except that from and after the Merger Date, (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Nichols and its stock opti▇▇ ▇▇▇mittee shall be substituted for Welkin and Welkin's Board of Directors administering such Welkin Stock Option Letter A-1") being exercisable for 100,000 shares of Common StockPlan, (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("each Welkin Option Letter A-2") being exercisable for 150,000 assumed by Nichols may be exercised s▇▇▇▇▇ ▇or shares of Common Stock and Nichols Stock, (iii) one option letter agreement in the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 nu▇▇▇▇ ▇▇ shares of Common Nichols Stock subject to su▇▇ ▇▇▇▇in Options shall be equal to the number of shares of Welkin Stock subject to such Welkin Options immediately prior to the Merger Date multiplied by the Conversion Ratio, and (iv) the per share exercise price under each such option letters being referred Welkin Option shall be adjusted by dividing the per share exercise price under each such Welkin Option by the Conversion Ratio and rounding up to collectively herein the nearest cent. Notwithstanding the provisions of clause (iii) of the preceding sentence, Nichols shall not be oblig▇▇▇▇ ▇o issue any fraction of a share of Nichols Stock upon exerci▇▇ ▇▇ ▇elkin Options and any fraction of a share of Nichols Stock that otherwis▇ ▇▇▇▇▇ be subject to a converted Welkin Option shall represent the right to receive a cash payment upon exercise of such converted Welkin Option equal to the product of such fraction and the difference between the market value of one share of Nichols Stock at the time ▇▇ ▇▇▇▇cise of such Welkin Option and the per share exercise price of such Welkin Option. The market value of one share of Nichols Stock at the time o▇ ▇▇▇▇▇ise of a Welkin Option shall be the Weighted Average Share Price of Nichols Stock as set forth ▇▇ ▇▇▇▇dule 1.3(a), Weighted Average Share Price, hereto. Nichols and Welkin agree to ▇▇▇▇ ▇ll necessary steps to effectuate the "Plan Option Letters")foregoing provisions of this Section. (b) The Company represents As soon as practicable after the Merger Date and warrants that there are sufficient shares in any event no later than thirty (30) days after the Merger Date, Nichols shall deliver to t▇▇ ▇▇▇ticipants of Common Stock currently available under the Company's 1993 Welkin Stock Option Plan an appropriate notice setting forth such participant's rights pursuant thereto and the grants subject to the Welkin Stock Option Plan shall continue in effect on the same terms and conditions (subject to the adjustments required by Section 1.3(a) after giving effect to the Merger). Within fifteen (15) days after the Merger Date, Nichols shall file a reg▇▇▇▇▇▇▇on statement on Form S-8 (the "1993 PlanS-8 Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act") with respect to cover the shares of Common Nichols Stock issuable subject to Executive upon exercise ▇▇▇▇ ▇▇tions. Nichols shall use its best ▇▇▇▇▇▇▇ to maintain the effectiveness of Option Letter A-1the S-8 Registration Statement (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such options remain outstanding. The S-8 Registration Statement and all amendments and supplements thereto will conform in all respects with the requirements of the Securities Act and all rules and regulations thereunder. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation All contractual restrictions or limitations on transfer with respect to approve both (i) an amendment increasing the number of shares available for the issuance of options Welkin Stock awarded under the Welkin Stock Option 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 extent that such restrictions or limitations shall not have already lapsed (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 whether as a result of an Employer Breach the Merger or (zotherwise), and except as otherwise expressly provided in such plan, shall remain in full force and effect with respect to shares of Nichols Stock into which su▇▇ ▇▇▇▇ricted stock is converted pursuant to Section 1.3(a) 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 subparagraphAgreement.

Stock Options. (a) As additional compensation for his services hereunder, the Corporation shall BioCryst hereby agrees that it will grant to Executive an a stock 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 Employee on or before December 31 of each year during the Corporation's common stock as reported by the American Stock Exchange on the date hereofterm of this Agreement, beginning with the terms of such option year 2004, 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 purchase at least 25,000 shares of Common Stock of BioCryst, par value $0.01 per share (the “Common Stock”), from the authorized and unissued stock or treasury stock of BioCryst, based on the performance of the Employee. The Board of Directors of BioCryst shall determine, in its sole discretion, based upon the performance of the Employee and the results of operations of BioCryst for the immediately preceding twelve (12) months, the number of shares which may be purchased pursuant to each such option, provided the number of shares shall not in any case be less than 25,000. In addition, BioCryst shall also grant to the Employee an option to purchase 100,000 shares of BioCryst Common Stock upon the occurrence of each of the following: (i) submission by BioCryst to the United States Food and Drug Administration (the “FDA”) of any new drug application; (ii) submission by any licensee of BioCryst to the FDA of any new drug application utilizing a product or process licensed by the licensee from BioCryst; (iii) one option letter agreement in final approval of each such new drug application of either BioCryst or such licensee by 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")FDA. (b) The Company represents parties intend for the options granted pursuant to this Agreement (the “Options”) to qualify as ”incentive stock options,” as that term is defined in Section 422 of the Internal Revenue Code of 1986, as amended (“Section 422”). The parties understand that the portion of any Option, together with the portion of any other incentive stock option granted by BioCryst and warrants that there are sufficient shares its parent and subsidiary corporations, if any, which may become exercisable in any year in excess of an aggregate of $100,000 fair market value, determined as of the date such Option or other option, as the case may be, was granted, may not be treated as an incentive stock option under Section 422. The Options may be exercised and the 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 may be purchased 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 Employee as a result of such exercise is taxed only within the periods and to the extent hereinafter set forth. (c) Each Option shall be 25% exercisable one year after the date it was granted, and the remaining seventy-five percent (75%) shall vest and become exercisable at the highest marginal federal rate of 1/48th per month, commencing with the thirteenth (13th) month after the date such Option was granted, and state income tax rates applicable continuing to ordinary incomevest for the succeeding months until fully vested and exercisable. In additionNotwithstanding the foregoing, in the event of a Change in Control or Structure, as defined below, or as set forth in subparagraphs (d) or (e) below, the Corporation entire amount of each Option shall pay Executive an become immediately exercisable. (d) If the Employee suffers a period of permanent disability, as defined in paragraph 4(b) below, the entire amount equal of each Option may be exercised at any time after termination for such disability and before the earlier of twenty-four (24) months or the expiration date of the Option. (e) In the event of the death of the Employee, the executor or administrator of the estate of the Employee, or other reliable transferee, shall have the right to exercise each Option, in its entirety, within the earlier of twenty-four (24) months after the Employee’s death or before the original expiration of the Option. Except as provided in this subparagraph (e), the Employee shall not have the right to transfer any Option. 25 (f) Subject to paragraphs 3(c), (d), and (e) above, each Option may, in the Employee’s sole discretion, be exercised in full at one time as to the Tax Difference arising total number of shares of Common Stock then exercisable, or in respect part from time to time as to a specific number of shares of Common Stock then exercisable. A partial exercise of an Option will not affect the exercisability of the remainder of the Option. (g) In no event shall the period for exercising an Option exceed ten (10) years from the date such exercise multiplied by a fractionOption is granted. (h) For purposes of this Agreement, the numerator term “Change 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 Control or Structure” 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.mean:

Stock Options. (a) As additional compensation for his services hereunderConcurrently with a Financing Event or at such earlier time as the Executive may direct, the Corporation shall Company will grant to the Executive an option under options (the Corporation"Options") to acquire 433,350 shares of the Company's 1993 Common Stock (the "Option Shares") pursuant to its 2003 Stock Option/Stock Issuance Plan (the "Plan") to acquire a total of 400,000 shares of the Corporation's common stock ), at an exercise price per share equal consistent with the valuation of the Company in the Financing Event (or, if the Executive directs an earlier grant, at an exercise price reasonably agreed upon by the Executive and the Company based on the then valuation of the Company). In the event of any issuance by the Company of additional Common Stock or other securities convertible or exercisable into Common Stock prior to, or within one (1) year following, the time following the Effective Date that the Company shall have closed equity or long-term debt financings resulting in aggregate gross proceeds to the closing sale price Company of $5,000,000, which issuance would result in the Executive owning, and/or having the right to acquire through the exercise of options, that number of shares of the CorporationCompany'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 such that the Executive would then own, and/or have the right to acquire through the exercise of options, that number of shares which, when combined with any shares that he has previously disposed of, amounts to less than two and one-half percent (iii2.5%) one option letter agreement in of the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares of Company's outstanding Common Stock on a fully diluted basis, the Company shall grant to the Executive additional options to purchase the Company's Common Stock ("Additional Options") such option letters being referred that the Executive shall, at all times during the one (1) year period following the closing of the last such financing, own, and/or have the right to collectively herein as acquire through the "exercise of options, not less than two and one-half percent (2.5%) of the Company's outstanding Common Stock on a fully diluted basis. In the event that there are insufficient shares of the Company's Common Stock available under the Plan Option Letters")to allow the grant of such Additional Options, the Company will cause the Plan to be amended or a new plan approved which will permit the grant of the Additional Options. (b) The Company represents Options and warrants that there are sufficient shares the Additional Options shall become exercisable on an equal monthly basis over the thirty-six (36) month period following the date of Common Stock currently available under grant, which period with respect to the Company's 1993 Stock Option Plan initial grant shall be reduced by the number of months, including fractional months, between the Effective Date and the grant date (the "1993 PlanNumber of Months") to cover and the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1. (c) In the event Options shall become immediately exercisable for 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 total number of such exercise Option Shares multiplied by a fraction, fraction the numerator of which is 1 shall be the Number of Months and the denominator of which is equal to 1 minus shall be thirty-six (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 36); provided that 100% of such exercise. Such amount Options and Additional Options shall be paid by become fully exercisable upon the Corporation within ninety (90) days after occurrence of any such exercise. Notwithstanding anything to the contrary Change in Control and as provided in Section 4 of 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. (ai) As additional compensation for his services hereunderOn the Commencement Date, Executive shall be granted options to purchase 100,000 shares of the Corporation Company’s $.10 par value common stock (“Common Stock”), exercisable at the closing price of such Common Stock on the first trading day after the approval of this Agreement by the Board. Such options shall grant have a term of 10 years, shall be on the terms and conditions contained in the Company’s standard stock option agreement and shall be subject to Executive an option under the Corporation's 1993 Stock Option Company’s 1998 Long Term Incentive Plan (the "“Plan") to acquire a total of 400,000 shares ”). To the extent permissible under the provisions of the Corporation's common stock at an exercise price per share equal Internal Revenue Code 1986, as amended (the “Code”) and under the Plan, such options shall be Incentive Stock Options within the meaning of the Code; to the closing sale price extent not so permissible, such options shall be non-qualified stock options. Options to purchase up to 50,000 of such shares shall vest at the end of the Corporation's common stock first year of the Initial Term, based upon the achievement by Executive of the Targets established for 2011, in the same percentage as reported by Executive earns the American Stock Exchange on the date hereofPerformance Bonus for that year; provided, with the terms however, that not more than 100% of such option options shall vest. Options to be evidenced purchase up to an additional 50,000 of such shares shall vest at the end of the second year of the Initial Term, based upon the achievement by (i) one option letter agreement Executive of the Targets established for 2012, in the form annexed same percentage as Exhibit "A" hereto Executive earns the Performance Bonus for that year; provided, however, that not more than 100% of such options shall vest. ("Option Letter A-1"ii) being exercisable for 100,000 At the beginning of each Renewal Term, Executive shall be granted options to purchase 50,000 shares of Common Stock, (ii) one option letter agreement exercisable at the closing price of such Common Stock on the first trading day of such Renewal Term. Such options shall have a term of 10 years, shall be on the terms and conditions contained in the form annexed Company’s standard stock option agreement and shall be subject to the Company’s 1998 Long Term Incentive Plan or any successor plan pursuant to which they are granted. To the extent permissible under the Code and the Plan or such successor plan, such options shall be Incentive Stock Options within the meaning of the Code; to the extent not so permissible, such options shall be non-qualified stock options. Such options shares shall vest at the end of the applicable Renewal Term, based upon the achievement by Executive of the Targets established for that year, in the same percentage as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable Executive earns the Performance Bonus for 150,000 shares that year; provided, however, that not more than 100% of Common Stock and such options shall vest. (iii) one option letter agreement in If the form annexed as Exhibit "B" hereto ("Option Letter B") being exercisable for 150,000 shares Company terminates Executive’s employment pursuant to the provisions of Common Stock (Section 5(d), then the maximum number of options that Executive can earn during that year shall vest on the effective date of such option letters being referred to collectively herein as the "Plan Option Letters")termination. (biv) The If the Company represents and warrants that there are sufficient shares of Common Stock currently available under shall experience a Change in Control, then 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 maximum number of shares available for options that Executive can earn during the issuance Term of options under this Agreement in effect on the Plan to an amount at least sufficient to cover all the shares earlier 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, date such Change in Control is publicly announced or (y) by Executive the effective date of such Change in Control shall vest as a result of an Employer Breach or (z) by the Corporation by reason of the Executive's disability or death prior to day preceding 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 effective date of such exercise (the amount 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. (a) As additional compensation for his services hereunderAt the Closing, each Option (other than the Management Options, which shall be treated in accordance with Section 3.5(b)) representing the right to acquire shares of Company Common Stock, ▇▇▇▇▇▇▇ Common Stock or Sunbeam Common Stock (collectively, "Stock") which is outstanding immediately prior to the Closing under the Company Stock Option Plan, the Corporation shall grant to Executive an option under ▇▇▇▇▇▇▇ Stock Option Plan or the Corporation's 1993 Sunbeam Stock Option Plan (whether or not then vested or exercisable) shall be cancelled at the Closing in exchange for a payment at the Closing in cash to the holder of such Option in such amount as is set forth opposite such holder's name (in a column designating the amount of such cash payment) on a schedule, to be delivered by the Principal Sellers to the Buyer two (2) Business Days prior to the Closing Date (the "PlanSchedule of Option Payments") to acquire a total of 400,000 shares which amount shall be calculated in accordance with Section 3.5(a) 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")Disclosure Schedule. (b) The Company represents and warrants that there are sufficient At the Closing, fifty percent (50%) of the Options held by each individual listed in Section 3.5(b) of the Disclosure Schedule (such fifty percent (50%) of such Options, the "Management Options") shall be converted into such number of restricted shares of Buyer 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 as is 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 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 quotient obtained by dividing (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 aggregate value of such exercise Management Options held by such individual as set forth opposite such individual's name (in a column designating the amount of such difference being referred value to as be paid in restricted Buyer Common Stock) on the "Tax Difference" in respect Schedule of such exercise). In computing the Tax DifferenceOption Payments, 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 ExecutiveFair Market Value of the Buyer Common Stock; provided, in each case in respect that such shares of ordinary income, in effect at the time of such exercise. Such amount restricted Buyer Common Stock shall be paid by the Corporation within ninety (90) days after any such exercise. Notwithstanding anything subject to the contrary in this terms of the Buyer's 2003 Stock Incentive Plan and a Restricted Stock Agreement or the Plan Option Letters, the Corporation shall have no obligation to pay Executive any amount in excess of $250,000 substantially in the aggregate in respect of its obligations under this subparagraphform attached hereto as Exhibit H (the "Restricted Stock Agreement").

Stock Options. (a) As additional compensation for his services hereunderAt the Effective Time, each outstanding option to purchase shares of VCAM Common Stock (a "VCAM Stock Option") issued pursuant to the Corporation VCAM Stock Plans, whether vested or unvested, shall grant be assumed by ADP. Each VCAM Stock Option shall be deemed, without further action on the part of ADP or the holders of such VCAM Stock Options, to Executive constitute an option to acquire, on the same terms and conditions as were applicable under the Corporation's 1993 such VCAM Stock Option Plan (except to the "Plan"extent that such terms and conditions may be altered in accordance with their terms as a result of the transactions contemplated hereby including accelerated vesting of VCAM Stock Options which shall occur by virtue of consummation of the Merger to the extent required with respect to the VCAM Stock Options set forth in Section 3.1(c) to acquire a total of 400,000 the VCAM Disclosure Schedule), shares of ADP Common Stock in such amount and at the Corporation's common stock at an exercise price provided below: (i) the number of shares of ADP Common Stock to be subject to the option (as adjusted) shall be equal to the product of (x) the number of shares of VCAM Common Stock subject to the original option and (y) the Exchange Ratio (rounded to four decimal points); (ii) the exercise price per share of ADP Common Stock under the option (as adjusted) shall be equal to (x) the closing sale exercise price per share of VCAM Common Stock under the Corporation's common stock as reported original option divided by (y) the American Stock Exchange on Ratio (rounded to the date hereof, nearest $0.01); and (iii) in accordance with the terms of the VCAM Stock Option Plan under which the VCAM Stock Options were issued, fractional shares of any assumed VCAM Stock Options resulting from the adjustments set forth in this Section 2.3(a) shall be eliminated. In the case of any option to which section 421 of the Code applies by reason of its qualification under any of sections 422-424 of the Code, the exercise price, the number of shares purchasable pursuant to such option to be evidenced by (i) one option letter agreement in and the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares terms and conditions 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 exercise 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 shall be effected in a manner consistent with the "Plan Option Letters")requirements of section 424(a) of the Code. (b) The Company represents As soon as practicable after the Effective Time, ADP shall deliver to the holders of VCAM Stock Options appropriate notices setting forth such holders' rights pursuant to the respective VCAM Stock Plans and warrants the agreements evidencing the grants of such VCAM Stock Options and that there are sufficient shares of Common Stock currently available under such options and the Company's 1993 Stock Option Plan related option agreements shall be assumed by ADP and shall continue in effect on the same terms and conditions (subject to the "1993 Plan") adjustments required by this Section 2.3 after giving effect to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1Merger). (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation ADP shall take all corporate action necessary to approve both (i) an amendment increasing the reserve for issuance a sufficient number of shares available of ADP Common Stock for delivery upon exercise of the issuance of options under VCAM Stock Options assumed in accordance with this Section 2.3. No later than the Plan Effective Time, ADP shall prepare and file a registration statement on Form S-8 (or any successor or other appropriate forms), or another appropriate form with respect to an amount at least sufficient to cover all the shares of ADP Common Stock issuable upon exercise subject to such options and shall use its reasonable commercial 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 prospectus or prospectuses contained therein) for so long as such options remain outstanding and cause such shares to be listed on 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 OptionsNYSE. (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 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. All options and warrants (individually, a "Frontier ------------- -------- Option" and collectively, the "Frontier Options") outstanding at the Effective ------ ---------------- Time to purchase securities of Frontier under any stock option plans or agreements adopted by Frontier or otherwise (the "Frontier Stock Option Plans") --------------------------- shall remain outstanding following the Effective Time. At the Effective Time, such Frontier Options, by virtue of the Merger and without any further action on the part of Frontier or the holder of such Frontier Options, shall be assumed by West Pac in such manner that West Pac (a) As additional compensation for his services hereunderis a corporation (or a parent or a subsidiary corporation of such corporation) "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code; or (b) to the extent that Section 424 of the Code does not apply to any such Frontier Options, would be such a corporation (or a parent or a subsidiary corporation of such corporation) were Section 424 applicable to such option. Each Frontier Option assumed by West Pac shall be exercisable upon the Corporation shall grant to Executive an option same terms and conditions as under the Corporation's 1993 applicable Frontier Stock Option Plan and the applicable option agreement issued thereunder, except that (x) the "Plan") to acquire a total unexercised portion of 400,000 each such Frontier Option shall be exercisable for that whole number of shares of West Pac Common Stock (rounded to the Corporation's common stock at an nearest whole share, with 0.5 rounded upward) equal to the number of shares of Frontier Common Stock subject to the unexercised portion of such Frontier Option multiplied by the Exchange Ratio; and (y) the option exercise price per share of West Pac Common Stock shall be an amount equal to the closing sale option exercise price per share of Frontier Common Stock subject to such Frontier Option in effect at the Effective Time divided by the Exchange Ratio (the option price per share, as so determined, being rounded to the nearest full cent, with $0.005 rounded upward). No payment shall be made for fractional interests. The term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Corporation's common stock as reported by Code, if applicable, and all of the American Stock Exchange on the date hereof, with the other terms of the Frontier Options shall otherwise remain unchanged unless modified by or as a result of the transaction contemplated by this Agreement. As soon as practicable after the Effective Time, West Pac shall deliver to the holders of Frontier Options appropriate notices setting forth such option holders' rights pursuant to be evidenced such Company Options, as amended by this Section 1.5, as well as notice of West Pac's assumption of Frontier's obligations with respect thereto (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable which occurs by virtue of this Agreement). West Pac shall take all corporate actions necessary to reserve for 100,000 issuance such 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 West Pac Common Stock and as will be necessary to satisfy exercises in full of all Frontier Options after the Effective Time. Within forty-five (iii45) one option letter agreement in days after 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 Effective Time, West Pac shall register 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 West Pac Common Stock issuable upon exercise of Option Letter A-2 such Frontier Options with the Securities and Option Letter B and (ii) appropriate amendments to Exchange Commission on Form S-8 and, for a period running until the Plan specifically confirming the right earlier 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) ten (10) years after the Corporation is required to amend the Plan Option Letters pursuant to Paragraph 5(c) Effective Time; or (ii) Executive's employment by the exercise of all of the Frontier Options, shall maintain the effectiveness of such Form S-8 Registration Statement unless the Surviving Corporation is terminated (x) acquired after the Effective Time by any Person that does not have a class of securities registered under 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 subparagraphExchange Act.

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 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 _____________ 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 ___________ 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 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 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. 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 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. 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. As a material inducement to Employee to enter into this Agreement, Company agrees that it will grant an option (the "Option") to Employee to purchase up to 50,000 shares of common capital stock of Company (the "Option Shares") (on the assumption that shares of Company's common stock will be issued and outstanding at the date of grant for fair market value and otherwise on terms to be agreed upon between Company and Employee at a later date than 120 days after the Effective Date). The Option will be evidenced by a written agreement (the "Option Agreement") acceptable to, and executed by, Company and Employee. The Option Agreement (a) As additional compensation will specify the purchase price to be paid by Employee for the Option Shares upon 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 exercise of the Corporation's common stock at an exercise price per share equal to Option (which will be the closing sale price fair market value of the CorporationOption Shares as determined in good faith by Company's common stock Board of Directors); (b) will provide that Employee may exercise the option over a three (3) year period 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 as to 33.3 percent of the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 shares of Common StockShares, on and after 2-17-98, (ii) one option letter agreement in as to 33.3 percent of the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 shares of Common Stock Shares, on and after 2-17-99, (iii) one option letter agreement in as to 33.3 percent of the form annexed Option Shares, on and after 2-17-2000, and (iv) as Exhibit "B" hereto to the remaining 0 percent of the Option Shares, on and after 2-17-2000 ("Option Letter B") being exercisable for 150,000 shares provided, that Employee remains employed by Company on each of Common Stock (such option letters being referred to collectively herein as the "Plan Option Letters"dates). (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 will provide for three non-qualified options outside the Plan having substantially the same terms such restrictions on transferability as may be reasonably required by Company; and provisions of the Plan Stock Options. (d) In will set forth other terms and conditions related to the Option agreed upon by Company and Employee. The foregoing notwithstanding, Employee acknowledges that Company is engaged in discussions with a corporation (an "Acquiring Company") that has expressed an interest in acquiring all the outstanding capital stock of Company with the effect of Company becoming a wholly-owned subsidiary of such Acquiring Company; and in such event Company agrees to act in good faith in an effort to negotiate options in favor of Employee that (i) the Corporation is required would provide Employee an opportunity, by their exercise, 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 acquire capital stock of the Executive's disability or death prior Acquiring Company of comparable value to the expiration of the options evidenced by the Plan Option Letters Shares (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 substantially similar terms to the Tax Difference arising in respect of such exercise multiplied terms upon which the Option is or would otherwise be granted 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 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 hereunderAt the Effective Time, each then-outstanding option to purchase Common Shares (collectively, the Corporation shall grant to Executive an option "Options") under the CorporationCompany's 1993 1990 Stock Option Plan and Company's Executive Share Option Scheme (collectively, the "Stock Option Plans"), whether or not then exercisable or fully vested, shall be assumed by Parent and shall constitute an option (a "Substitute Option") to acquire, on substantially the same terms and subject to substantially the same conditions as were applicable under such Option, including without limitation term, vesting, exercisability, status as an "incentive stock option" under Section 422 of the Code (if applicable) and termination provisions, the number of shares of Parent Common Stock, rounded down to the nearest whole share, determined by multiplying the number of Common Shares subject to such Option immediately prior to the Effective Time by 0.14357 (the "PlanConversion Factor") to acquire a total of 400,000 shares of the Corporation's common stock ), at an exercise price per share of Parent Common Stock (increased to the nearest whole cent) equal to the closing sale exercise price per share of Common Shares subject to such Option divided by the Conversion Factor; 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 as an incentive stock option under Section 422 of the Code or as reported by an employee stock purchase plan option under Section 423 of the American Stock Exchange on Code, the date hereof, conversion formula shall be adjusted if necessary to comply with Section 424(a) 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")Code. (b) The Company represents and warrants that there are sufficient shares shall use its best efforts to obtain all necessary waivers, consents or releases from holders of Common Stock currently available Options under the Company's 1993 Stock Option Plan (Plans and take any such other action as may be reasonably necessary to give effect to the "1993 Plan") to cover the shares of Common Stock issuable to Executive upon exercise of Option Letter A-1transactions contemplated by this Section 2.2. (c) In the event that the Company's stockholders fail at the next annual meeting of stockholders of the Corporation Parent shall take all corporate action necessary to approve both (i) an amendment increasing the reserve for issuance a sufficient number of shares available of Parent Common Stock for delivery upon exercise of Substitute Options pursuant to the issuance of options under terms set forth in Section 2.2(a). As soon as practicable after the Plan to an amount at least sufficient to cover all Effective Time, the shares of Parent Common Stock issuable upon exercise of Option Letter A-2 subject to Substitute Options will be covered by an effective registration statement on Form S-8 (or any successor form) or another appropriate form and Option Letter B and (ii) appropriate amendments Parent shall use its reasonable best efforts to maintain 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 effectiveness of such stock options (including without limitation, the period of exercisability of stock options under the Plan upon termination of employment registration statement 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 incomeSubstitute Options remain outstanding. In addition, Parent shall use all reasonable efforts to cause the Corporation shall pay Executive an amount equal shares of Parent Common Stock subject to Substitute Options to be listed on 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 NYSE (i) the highest marginal federal income tax rate (currently 39.6%as hereinafter defined) 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 other exchanges as Parent 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 subparagraphdetermine.

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. (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 hereof, with the terms of such option to be evidenced by Reference Date: (i) one option letter agreement in the form annexed as Exhibit "A" hereto ("Option Letter A-1") being exercisable for 100,000 2,079,286 shares of LTX-Credence Common StockStock were subject to issuance pursuant to outstanding LTX-Credence Options (as defined below) to purchase LTX-Credence Common Stock under the applicable LTX-Credence Stock Plan (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 LTX-Credence Share Plans, other than LTX-Credence Restricted Shares or LTX-Credence Restricted Share Units, are referred to in this Agreement as “LTX-Credence Options”), and (ii) one option letter agreement in the form annexed as Exhibit "A-2" hereto ("Option Letter A-2") being exercisable for 150,000 646,565 shares of LTX-Credence Common Stock are reserved for future issuance under the LTX-Credence Share Plans, including 326,477 shares reserved for issuance under the LTX-Credence Purchase Plan. Section 2.2(c) of the LTX-Credence Disclosure Schedule sets forth a complete and accurate list of all stock option plans or any other plan or agreement adopted by LTX-Credence that provides for the issuance of equity to any Person (the “LTX-Credence Share Plans”). LTX-Credence has made available to Verigy complete and accurate copies of all LTX-Credence Share Plans and the forms of all award agreements evidencing outstanding awards under such plans. LTX-Credence has made available to Verigy a true and complete list of each LTX-Credence Option outstanding as of the Reference Date, and (iii1) one option letter agreement in the form annexed as Exhibit "B" hereto particular LTX-Credence Stock Plan or other arrangement pursuant to which such LTX-Credence Option was granted, ("Option Letter B"2) 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 name of the Corporation to approve both holder of such LTX-Credence Option, (i3) an amendment increasing the number of shares available for of LTX-Credence Common Stock subject to such LTX-Credence Option, (4) the exercise price of such LTX-Credence Option, (5) the date on which such LTX-Credence Option was granted, (6) the applicable vesting schedule, and the extent to which such LTX-Credence Option was vested and exercisable as of the Reference Date, (7) the date on which such LTX-Credence Option expires and (8) whether such LTX-Credence 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 shares of LTX-Credence Common Stock subject to issuance of options under the Plan applicable LTX-Credence Benefit 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, fully paid and nonassessable. All grants of LTX-Credence Options were validly issued and properly approved by the Board of Directors of LTX-Credence (or a duly authorized committee or subcommittee thereof) in material compliance with all applicable Legal Requirements and recorded on 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 LTX-Credence Financials in accordance with GAAP. As of the Corporation's Board of DirectorsReference Date, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards (whether payable in the issuance of stock options under the Plancash, shares or otherwise) with respect 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 nonLTX-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 Credence 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. 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.