Common use of Treatment of Options and Other Stock-Based Awards Clause in Contracts

Treatment of Options and Other Stock-Based Awards. (a) At the Effective Time, each option granted (or previously assumed) by the Company to purchase shares of Company Common Stock (each, a “Company Option”), which is outstanding and unexercised immediately prior to the Effective Time (each an “Outstanding Company Option”) shall cease to represent a right to acquire shares of Company Common Stock and shall be EXECUTION COPY assumed by Parent and converted automatically, into an option to purchase shares of Parent Common Stock (a “Converted Option”) in an amount and at an exercise price determined as provided below (and each Converted Option otherwise shall remain subject to the terms of the Company’s 2000 Equity Incentive Plan, or other governing share-based plan document, including plan documents governing options that have previously been assumed by the Company as a result of corporate acquisition transactions by the Company, as applicable (collectively, and in each case as the same may be amended to the date hereof, the “Company Stock Plans”) and the applicable agreement, notice or letter evidencing the grant of the Company Option thereunder and any Benefit Plan providing for accelerated vesting). (i) The number of shares of Parent Common Stock to be subject to the Converted Option shall be equal to the product of (x) the number of shares of Company Common Stock subject to the Outstanding Company Option and (y) 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 (ii) the exercise price per share of Parent Common Stock under the Converted Option shall be equal to the exercise price per share of Company Common Stock under the Outstanding Company Option divided by the Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. In the case of any Outstanding Company Option which is, immediately prior to the Effective Time, an “incentive stock option” (as defined in Section 422 of the Code), the exercise price, the number of shares purchasable pursuant to the corresponding Converted Option and the terms and conditions of exercise of such Converted Option shall be determined in order to comply with Section 424(a) of the Code and to avoid a “modification” of any such option under Code Section 424(h). In all events, Outstanding Company Options shall be converted into Converted Options in such a manner as to be compliant with Section 409A of the Code (or an available exemption therefrom) and any guidance issued thereupon by the U.S. Department of Treasury. Except as otherwise provided in this section, the duration and other terms of each Converted Option shall be the same as those of the applicable Outstanding Company Option, except that all references to the Company shall be deemed to be references to Parent. Prior to the Effective Time, the Company shall take all action necessary to be taken by the Company in order to effect the foregoing provisions of this section. (b) At the Effective Time, each restricted stock unit award granted (or previously assumed) by the Company representing a right to receive upon a future date or dates shares of Company Common Stock (each a “Company RSU Award”) which is outstanding and which has not been settled by the issuance of shares of Company Common Stock immediately prior to the Effective Time (each an “Outstanding Company RSU Award”) shall cease to represent a right to receive upon settlement thereof shares of Company Common Stock and shall be assumed by Parent and converted automatically into a right to receive upon settlement thereof shares of Parent Common Stock (a “Converted RSU Award”) in an amount determined as provided below (and each Converted RSU Award otherwise shall remain subject to the terms of the applicable Company Stock Plan, and the applicable agreement, notice or letter evidencing the grant of the Company RSU Award thereunder and any Benefit Plan providing for accelerated vesting). The number of shares of Parent Common Stock to be subject to the Converted RSU Award shall be equal to the product of (x) the number of shares of Company Common Stock subject to the Outstanding Company RSU Award and (y) 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. Prior to the Effective Time, the Company shall take all action necessary to be taken by the Company in order to effect the foregoing provisions of this Section.

Treatment of Options and Other Stock-Based Awards. (a) At the Effective Time, each option granted (or previously assumed) heretofore assumed by the Company Dime to purchase shares of Company Dime Common Stock (each, a “Company each an "Dime Option”), ") which is outstanding and unexercised (whether or not exercisable) immediately prior to the Effective Time (each an “Outstanding Company Option”) thereto shall cease to represent a right to acquire shares of Company Dime Common Stock and shall be EXECUTION COPY assumed by Parent and converted automatically, automatically into an option to purchase shares of Parent Washington Mutual Common Stock (a “Converted Option”) in an amount and at an exercise price determined as provided below (and each Converted Option otherwise shall remain subject to the terms of the Company’s 2000 Equity Dime Stock Incentive Plan, or other governing share-based plan document, including plan documents governing options that have previously been assumed by the Company as a result of corporate acquisition transactions by the Company, as applicable (collectively, and in each case as the same may be amended to the date hereof, the “Company Dime 1991 Stock Plans”) Incentive Plan, as amended to the date hereof, the Dime Stock Incentive Plan for Outside Directors, as amended to the date hereof, the Dime 1992 Stock Option Plan, as amended to the date hereof, the Dime 1990 Stock Option Plan, as amended to the date hereof, the Dime 1997 Stock Incentive Plan, as amended to the date hereof, the Dime 1997 Stock Incentive Plan for Outside Directors, as amended to the date hereof, the Dime Pride Shares Program, as amended to the date hereof, the Dime Pride Shares II Program, as amended to the date hereof, the Dime 1993 Employee Stock Purchase Plan, as amended to the date hereof, and the North American Mortgage Company Incentive Stock Option Plan, as amended to the date hereof, as applicable agreement(collectively, notice the "Dime Stock Option Plans"), and the agreements or letter letters evidencing the grant of the Company Option thereunder and any Benefit Plan providing for accelerated vesting).grants thereunder): (i) The the number of shares of Parent Washington Mutual Common Stock to be subject to the Converted Option converted option shall be equal to the product of (x) the number of shares of Company Dime Common Stock subject to the Outstanding Company Dime Option and (y) the Exchange Ratio (the "Option Conversion Ratio"), provided that any fractional shares of Parent Washington Mutual Common Stock resulting from such multiplication shall be rounded down up to the nearest whole share; and (ii) the exercise price per share of Parent Washington Mutual Common Stock under the Converted Option converted option shall be equal to the exercise price per share of Company Dime Common Stock under the Outstanding Company Dime Option divided by the Exchange Option Conversion Ratio, provided that such exercise price shall be rounded up down to the nearest cent. In the case of any Outstanding Company Option Dime Options which is, immediately prior to the Effective Time, an “are "incentive stock option” options" (as defined in Section 422 of the Code), the exercise price, the number of shares purchasable pursuant to the corresponding Converted Option such options and the terms and conditions of exercise of such Converted Option options shall be determined in order to comply with Section 424(a) of the Code and to avoid a “"modification” " of any such option under Code Section 424(h). In all events, Outstanding Company Options shall be converted into Converted Options in such a manner as to be compliant with Section 409A of the Code (or an available exemption therefrom) and any guidance issued thereupon by the U.S. Department of Treasury. Except as otherwise provided in this sectionSection 2.9, the duration and other terms of each Converted Option converted option shall be the same as those of the applicable Outstanding Company Option, Dime Option except that all references to the Company Dime shall be deemed to be references to ParentWashington Mutual. Prior In addition to the foregoing, in the event that any Dime Option has associated with it a stock appreciation right and/or limited stock appreciation right, the number and kind of shares subject to such right and the exercise price thereof shall be adjusted in the same manner as provided above for such Dime Option, and the terms and conditions thereof shall otherwise remain the same as they were immediately prior to the Effective Time, the Company shall take all action necessary to be taken by the Company in order to effect the foregoing provisions of this section. (b) At the Effective Time, each share of restricted stock unit award granted (or previously assumeda "Restricted Share" and, collectively, the "Restricted Shares") by the Company representing a right to receive upon a future date or dates shares outstanding as of Company Common Stock (each a “Company RSU Award”) which is outstanding and which has not been settled by the issuance of shares of Company Common Stock immediately prior to the Effective Time (each an “Outstanding Company RSU Award”) and issued pursuant to a Dime Stock Option Plan or any other equity-based plans or agreements of or with Dime or any of its Subsidiaries providing for the grant of Restricted Share awards, to the extent not already vested, shall cease to vest and shall represent a right to receive upon settlement thereof shares the same rights provided to other holders of Company Dime Common Stock and shall be assumed by Parent and converted automatically into a right pursuant to receive upon settlement thereof shares of Parent Common Stock Section 2.5 above. (a “Converted RSU Award”c) in an amount determined Except as provided below (herein or as otherwise agreed to by the parties, the Dime Stock Option Plans and each Converted RSU Award otherwise shall remain subject to any other plan, program or arrangement providing for the terms issuance or grant of any other interest in respect of the applicable Company Stock Plan, and the applicable agreement, notice capital stock of Dime or letter evidencing the grant any Subsidiary thereof shall terminate as of the Company RSU Award thereunder and any Benefit Plan providing for accelerated vesting). The number of shares of Parent Common Stock to be subject to the Converted RSU Award shall be equal to the product of (x) the number of shares of Company Common Stock subject to the Outstanding Company RSU Award and (y) 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. Prior to the Effective Time, and Dime shall ensure that following the Company Effective Time no holder of a Dime Option nor any holder of a Restricted Share or any other equity-based right shall take all action necessary have any right to be taken acquire equity securities of Dime or the Surviving Corporation (except to the extent required under any qualified plan maintained by the Company in order to effect the foregoing provisions Dime or any of this Sectionits Subsidiaries).

Treatment of Options and Other Stock-Based Awards. (a) At the Effective Time, each option granted (or previously assumed) by the Company to purchase shares of Company Common Stock (each, each a “Company Option”), which is outstanding and unexercised immediately prior to the Effective Time (each an “Outstanding Company Option”) shall cease to represent a right to acquire shares of Company Common Stock and shall be EXECUTION COPY assumed by Parent and converted automatically, into an option to purchase shares of Parent Common Stock (a “Converted Option”) in an amount and at an exercise price determined as provided below (and each Converted Option otherwise shall remain subject to the terms of the Company’s 2000 Amended and Restated 2003 Stock Incentive Plan, 2003 Director Stock Option Plan or 1998 Special Equity Incentive Plan, or other governing share-based plan document, including plan documents governing options that have previously been assumed by the Company as a result of corporate acquisition transactions by the Company, as applicable (collectively, and in each case as the same may be amended from time to the date hereoftime, the “Company Stock Plans”) and the applicable agreement, notice or letter evidencing the grant of the Company Option thereunder and any Benefit Plan providing for accelerated vestingthereunder). (i) The the number of shares of Parent Common Stock to be subject to the Converted Option shall be equal to the product of (x) the number of shares of Company Common Stock subject to the Outstanding Company Option and (y) 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 (ii) the exercise price per share of Parent Common Stock under the Converted Option shall be equal to the exercise price per share of Company Common Stock under the Outstanding Company Option divided by the Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. In the case of any Outstanding Company Option which is, immediately prior to the Effective Time, an “incentive stock option” (as defined in Section 422 of the Code), the exercise price, the number of shares purchasable pursuant to the corresponding Converted Option and the terms and conditions of exercise of such Converted Option shall be determined in order to comply with Section 424(a) of the Code and to avoid a “modification” of any such option under Code Section 424(h)) of the Code. In all events, Outstanding Company Options shall be converted into Converted Options in such a manner as to be compliant with Section 409A of the Code (or an available exemption therefrom) and any guidance issued thereupon by the U.S. Department of Treasury. Except as otherwise provided in this section, the duration and other terms of each Converted Option (including vesting provisions) shall be the same as those of the applicable Outstanding Company Option, except that all references to the Company shall be deemed to be references to Parent. Prior to the Effective Time, the Company and Parent shall take all action necessary to be taken by the Company in order to effect the foregoing provisions of this section. (b) At the Effective Time, each restricted stock unit award granted (or previously assumed) by the Company representing a right to receive upon a future date or dates shares of Company Common Stock (each a “Company RSU Award”) which is outstanding and which has not been settled by the issuance of shares of Company Common Stock immediately prior to the Effective Time (each an “Outstanding Company RSU Award”) shall cease to represent a right to receive upon settlement thereof shares of Company Common Stock and shall be assumed by Parent and converted automatically into a right to receive upon settlement thereof shares of Parent Common Stock (a “Converted RSU Award”) in an amount determined as provided below (and each Converted RSU Award otherwise shall remain subject to the terms of the applicable Company Stock Plan, and the applicable agreement, notice or letter evidencing the grant of the Company RSU Award thereunder and any Benefit Plan providing for accelerated vesting)thereunder. The number of shares of Parent Common Stock to be subject to the Converted RSU Award shall be equal to the product of (x) the number of shares of Company Common Stock subject to the Outstanding Company RSU Award and (y) 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. Prior to the Effective Time, the Company shall take all action necessary to be taken by the Company in order to effect the foregoing provisions of this Section.

Treatment of Options and Other Stock-Based Awards. (a) At the Effective Time, each option granted (or previously assumed) by the Company Maxtor to purchase shares of Company Maxtor Common Stock (each, each a “Company Maxtor Option”), which is outstanding and unexercised immediately prior to the Effective Time (each an “Outstanding Company Option”) shall cease to represent a right to acquire shares of Company Maxtor Common Stock and shall be EXECUTION COPY assumed by Parent Seagate and converted automatically, and in accordance with the terms of the plan documents and agreements, notices or letters governing such options, into an option to purchase shares of Parent Seagate Common Stock (a “Converted Option”) in an amount and at an exercise price determined as provided below (and each Converted Option otherwise shall remain subject to the terms of the Company’s 2000 Equity Maxtor Amended and Restated 1996 Stock Option Plan, the Maxtor 2005 Performance Incentive Plan, or other governing share-based plan document, including plan documents governing options that have previously been assumed by the Company Maxtor as a result of corporate acquisition transactions by the CompanyMaxtor, as applicable (collectively, and in each case as the same may be amended to the date hereof, the “Company Maxtor Stock Plans”) and the applicable agreementagreements, notice notices or letter letters evidencing the grant of the Company Option thereunder and any Benefit Plan providing for accelerated vesting).grants thereunder): (i) The the number of shares of Parent Seagate Common Stock to be subject to the Converted Option shall be equal to the product of (x) the number of shares of Company Maxtor Common Stock subject to the Outstanding Company Maxtor Option and (y) the Exchange Ratio, provided that any fractional shares of Parent Seagate Common Stock resulting from such multiplication shall be rounded down to the nearest whole share; and (ii) the exercise price per share of Parent Seagate Common Stock under the Converted Option shall be equal to the exercise price per share of Company Maxtor Common Stock under the Outstanding Company Maxtor Option divided by the Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. In the case of any Outstanding Company Maxtor Option which is, immediately prior to the Effective Time, an “incentive stock option” (as defined in Section 422 of the Code), the exercise price, the number of shares purchasable pursuant to the corresponding Converted Option and the terms and conditions of exercise of such Converted Option shall be determined in order to comply with Section 424(a) of the Code and to avoid a “modification” of any such option under Code Section 424(h). In all events, Outstanding Company Maxtor Options shall be converted into Converted Options in such a manner as to be compliant with Section 409A of the Code (or an available exemption therefrom) and any guidance issued thereupon by the U.S. Department of Treasury. Except as otherwise provided in this sectionSection 2.4, the duration and other terms of each Converted Option shall be the same as those of the applicable Outstanding Company Maxtor Option, except that all references to the Company Maxtor shall be deemed to be references to ParentSeagate. Prior to the Effective Time, the Company Maxtor shall take all action necessary to be taken by the Company Maxtor in order to effect the foregoing provisions of this sectionSection 2.4(a). (b) The foregoing provisions of Section 2.4(a) shall not apply to the Maxtor 1998 Employee Stock Purchase Plan or any other plan, program or arrangement intending to qualify as an employee stock purchase plan under Section 423 of the Code (the “Maxtor ESPP”). The Maxtor ESPP and all outstanding rights thereunder shall terminate at the Effective Time and the offering periods thereunder shall be deemed to end on the NYSE trading day immediately preceding the Closing Date, and the rights of each participating Maxtor employee then outstanding shall be deemed to be automatically exercised on such NYSE trading day. On such trading day, each participating Maxtor employee will be credited with the number of shares of Maxtor Common Stock purchased for his or her account(s) under the Maxtor ESPP during such offering period and such shares shall be treated in the manner described in Section 2.1. (c) Except as provided herein or as otherwise agreed to by the parties, Maxtor shall ensure that following the Effective Time no holder of a Maxtor Option nor any holder of any other equity-based right shall have any right to acquire equity securities of Maxtor or the Surviving Company. (d) At the Effective Time, each restricted stock unit award granted by Maxtor under the Maxtor 2005 Performance Incentive Plan and the Restricted Stock Unit Plan (or previously assumedthe “Maxtor RSU Plans”) by the Company representing a right to receive upon a future date or dates shares of Company Maxtor Common Stock (each a “Company RSU AwardMaxtor RSU”) which is outstanding and which has not been settled by the issuance of shares of Company Maxtor Common Stock immediately prior to the Effective Time (each an “Outstanding Company RSU Award”) shall cease to represent a right to receive upon settlement thereof shares of Company Maxtor Common Stock and shall be assumed by Parent Seagate and converted automatically into a right to receive upon settlement thereof shares of Parent Seagate Common Stock (a “Converted RSU AwardRSU”) in an amount determined as provided below (and each the Converted RSU Award otherwise shall remain subject to the terms of the applicable Company Stock Maxtor RSU Plan, and the applicable agreementagreements, notice notices or letter letters evidencing the grant of the Company RSU Award thereunder and any Benefit Plan providing for accelerated vestinggrants thereunder). The number of shares of Parent Seagate Common Stock to be subject to the Converted RSU Award shall be equal to the product of (x) the number of shares of Company Maxtor Common Stock subject to the Outstanding Company Maxtor RSU Award and (y) the Exchange Ratio, provided that any fractional shares of Parent Seagate Common Stock resulting from such multiplication shall be rounded down to the nearest whole share. Prior to the Effective Time, the Company Maxtor shall take all action necessary to be taken by the Company Maxtor in order to effect the foregoing provisions of this Section 2.4(d). (e) As soon as reasonably practicable after the Effective Time, and not more than ten (10) Business Days thereafter, Seagate shall deliver to each holder of a Converted Option or Converted RSU an appropriate notice evidencing the foregoing assumption of the option or restricted stock unit award by Seagate. Seagate shall comply with the terms of the Maxtor Stock Plans and the Maxtor RSU Plans, as applicable, and the agreements, notices or letters, subject to the adjustments pursuant to this Section. Each holder of a Converted Option or Converted RSU shall be credited with such holder’s service with Maxtor or its Subsidiaries for purposes of determining such holder’s vesting under such Converted Option or Converted RSU, as applicable. (f) Seagate shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Seagate Common Stock for delivery upon the exercise of the Converted Options and settlement of Converted RSUs. As soon as practicable after the Effective Time, and not more than ten (10) Business Days thereafter, Seagate shall file a registration statement on Form S-8 (or any successor or other appropriate form) with respect to the shares of Seagate Common Stock subject to the Converted Options and Converted RSUs and shall use its best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as the Converted Options and Converted RSUs remain outstanding. Seagate shall administer each Converted Option and Converted RSU held by a Maxtor Insider in a manner that complies with Rule 16b-3 promulgated under the Exchange Act to the extent the Maxtor Options and Maxtor RSUs were administered in a manner that complied with such rule prior to the date of this Agreement. (g) Employees of Maxtor and its Subsidiaries as of the Effective Time shall be permitted to participate in the Seagate employee stock purchase plan commencing on the first enrollment date of such plan following the Effective Time, subject to the eligibility provisions of such plan (with employees receiving credit, for purposes of such eligibility provisions, for service with Maxtor or Seagate or any of their respective Subsidiaries).

Treatment of Options and Other Stock-Based Awards. (a) At the Effective Time, each outstanding option granted (or previously assumed) by the Company to purchase shares of Company Common Stock (each, a “Company Option”), which is outstanding and unexercised immediately prior ) issued pursuant to the Effective Time (each an “Outstanding any Company Option”) Stock Incentive Plan shall cease to represent a right to acquire shares of Company Common Stock be fully vested and shall be EXECUTION COPY assumed by Parent and converted automaticallyshall be honored by Parent in accordance with its terms (as modified as provided herein) following its conversion in the Merger into options to purchase Parent Common Shares (“Parent Options”). From and after the Effective Time, into each Company Option shall be deemed to constitute an option to purchase shares acquire, on the same terms and conditions as were applicable under such Company Option, a number of Parent Common Stock (a “Converted Option”) in an amount and at an exercise price determined as provided below (and each Converted Option otherwise shall remain subject to the terms of the Company’s 2000 Equity Incentive Plan, or other governing share-based plan document, including plan documents governing options that have previously been assumed by the Company as a result of corporate acquisition transactions by the Company, as applicable (collectively, and in each case as the same may be amended to the date hereof, the “Company Stock Plans”) and the applicable agreement, notice or letter evidencing the grant of the Company Option thereunder and any Benefit Plan providing for accelerated vesting). (i) The number of shares of Parent Common Stock to be subject to the Converted Option shall be Shares equal to the product of (xI) the number of shares of Company Common Stock subject otherwise purchasable pursuant to the Outstanding such Company Option and (yII) 0.5522 (the “Stock Option Exchange Ratio”), provided that any fractional shares of Parent Common Stock resulting from such multiplication shall be rounded down down, if necessary, to the nearest whole share; and , at a price per share equal to (iiy) the exercise price per share of Parent Common Stock under the Converted Option shall be equal to the exercise price per share shares of Company Common Stock under the Outstanding otherwise purchasable pursuant to such Company Option Option, divided by (z) the Stock Option Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. In ; provided, however, that in the case of any Outstanding Company Option to which isSection 421 of the Internal Revenue Code of 1986, immediately prior to as amended (the Effective Time, an “incentive stock option” (as defined in Code”) applies by reason of its qualification under Section 422 of the CodeCode (“incentive stock options”), the exercise option price, the number of shares purchasable pursuant to the corresponding Converted Option such option and the terms and conditions of exercise of such Converted Option option shall be determined in order to comply accordance with the method set forth above unless use of such method will not preserve the status of such options as incentive stock options, in which case the manner of determination shall be adjusted in a manner that both complies with Section 424(a) of the Code and results in the smallest modification in the economic values that otherwise would be achieved by the holder pursuant to avoid a “modification” of any such option under Code Section 424(h)the method set forth above. In all events, Outstanding the foregoing substitution of all Company Options with Parent Options shall be converted into Converted Options in such a manner as to be compliant comply with the requirements of Section 409A of the Code (or an available exemption therefrom) and any guidance issued thereupon by the U.S. Department of Treasury. Except as otherwise provided in this section, the duration and other terms of each Converted Option shall be the same as those of the applicable Outstanding Company Option, except that all references to the Company shall be deemed to be references to Parent. Prior to the Effective Time, the Company shall take all action necessary to be taken by the Company in order to effect the foregoing provisions of this sectionCode. (b) At The Company and Parent shall take all corporate action necessary for the conversion of the Company Options, and Parent shall take all corporate action necessary to reserve for issuance a sufficient number of Parent Common Shares for delivery upon exercise of the Parent Options issued in substitution for such Company Options in accordance with this Section 2.4. As soon as practicable after the Effective Time (but in no event later than five Business Days after the Effective Time), each restricted stock unit award granted Parent shall file a registration statement on Form F-3 or Form F-8, as the case may be (or previously assumedany successor or other appropriate forms), with respect to the Parent Common Shares subject to such Parent Options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) by for so long as such Parent Options remain outstanding. (c) The Company shall take such action as shall be required to (i) terminate the Dividend Reinvestment and Stock Purchase Plan (the “DRIP and Purchase Plan”) as provided in Section 7.15; and (ii) ensure that all Company Common Stock held in the Company representing a right to receive upon a future date or dates tax-qualified defined contribution plan is treated in the same manner as all other shares of Company Common Stock under Article II of this Agreement. (each a d) Following the Effective Time, Parent shall maintain, solely for purposes of the Parent Options provided for above, the 1989 Stock Option Plan for Non-Employee Directors, the 1997 Employee Stock Option Plan, the 1998 Stock Option Plan for Non-Employee Directors, and the 2004 Employee Stock Option Plan (collectively, the “Company RSU AwardStock Incentive Plans”) which is outstanding and which has not been settled by ). Any other plan, program or arrangement providing for the issuance or grant of shares any other interest in respect of the capital stock of the Company Common Stock immediately prior to or any Subsidiary thereof (including the DRIP and Purchase Plan) shall terminate as of the Effective Time, and the Company shall ensure that following the Effective Time (each an “Outstanding no holder of a Company RSU Award”) Option or any other equity-based right shall cease to represent a have any right to receive upon settlement thereof shares acquire equity securities of the Company or the Surviving Company. (e) As soon as practicable after the Effective Time, Parent shall cause the Surviving Company to deliver to the holders of Company Common Options appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Incentive Plans and shall be stating that such Company Stock Incentive Plans, the Company Options and the underlying stock option agreements have been assumed by Parent and converted automatically into a right stock incentive plans covering, and options to receive upon settlement thereof shares of purchase, Parent Common Stock Shares, shall continue in effect on the same terms and conditions (a “Converted RSU Award”) in an amount determined as provided below (and each Converted RSU Award otherwise shall remain subject to the adjustments required by this Section 2.4 after giving effect to the Merger and the terms of the applicable Company Stock Plan, and the applicable agreement, notice or letter evidencing the grant of the Company RSU Award thereunder and any Benefit Plan providing for accelerated vestingIncentive Plans). The number of shares of Parent Common Stock to be subject to the Converted RSU Award shall be equal to the product of (x) the number of shares of Company Common Stock subject to the Outstanding Company RSU Award and (y) 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. Prior to the Effective Time, the Company shall take all action necessary to be taken by the Company in order to effect the foregoing provisions of this Section.

Treatment of Options and Other Stock-Based Awards. (a) At the Effective Time, each option granted (or previously assumed) by the Company Providian to purchase shares of Company Providian Common Stock (each, each a “Company Providian Option”), ) which is outstanding and unexercised immediately prior to the Effective Time (each an “Outstanding Company Option”) thereto shall cease to represent a right to acquire shares of Company Providian Common Stock and shall vest and be EXECUTION COPY assumed by Parent and converted automatically, automatically into an option to purchase a number of shares of Parent Washington Mutual Common Stock (a “Converted Option”) in an amount and at an exercise price determined as provided below (and each the Converted Option otherwise shall remain subject to the terms of the Company’s Providian 1997 Stock Option Plan, the Providian Stock Ownership Plan, the Providian Amended and Restated 2000 Stock Incentive Plan, and the Providian 1999 Non-Officer Equity Incentive Plan, or other governing share-based plan documentas applicable, including plan documents governing options that have previously been assumed by the Company as a result of corporate acquisition transactions by the Company, as applicable (collectively, and in each case as the same may be amended to the date hereof, the “Company Providian Stock Plans”) ), and the applicable agreement, notice agreements or letter letters evidencing the grant of the Company Option thereunder and any Benefit Plan providing for accelerated vesting).grants thereunder): (i) The the number of shares of Parent Washington Mutual Common Stock to be subject to the Converted Option shall be equal to the product of (x) the number of shares of Company Providian Common Stock subject to the Outstanding Company Providian Option and (y) the Exchange Ratio, provided that any fractional shares of Parent Washington Mutual Common Stock resulting from such multiplication shall be rounded down to the nearest whole share; and (ii) the exercise price per share of Parent Washington Mutual Common Stock under the Converted Option shall be equal to the exercise price per share of Company Providian Common Stock under the Outstanding Company Providian Option divided by the Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. In the case of any Outstanding Company Option Providian Options which is, immediately prior to the Effective Time, an are “incentive stock optionoptions” (as defined in Section 422 of the Code), the exercise price, the number of shares purchasable pursuant to the corresponding Converted Option such options and the terms and conditions of exercise of such Converted Option options shall be determined in order to comply with Section 424(a) of the Code and to avoid a “modification” of any such option under Code Section 424(h). In all events, Outstanding Company Providian Options shall be converted into Converted Options in such a manner as to be compliant with Section 409A of the Code (or an available exemption therefrom) and any guidance issued thereupon by the U.S. Department of Treasury. Except as otherwise provided in this sectionSection 2.4, the duration and other terms of each Converted Option shall be the same as those of the applicable Outstanding Company Option, Providian Option except that all references to the Company Providian shall be deemed to be references to Parent. Prior to the Effective Time, the Company shall take all action necessary to be taken by the Company in order to effect the foregoing provisions of this sectionWashington Mutual. (b) At the Effective Time, each right of any kind, contingent or accrued, to receive shares of Providian Common Stock or benefits measured by the value of a number of shares of Providian Common Stock, and each award of any kind consisting of shares of Providian Common Stock, granted under the Providian Stock Plans (including restricted stock unit award granted units, deferred stock units, phantom stock units and dividend equivalents), other than restricted stock (or previously assumed) by which shall vest and be treated the Company representing a right to receive upon a future date or dates same as outstanding shares of Company Providian Common Stock in accordance with Section 2.1) and Providian Options (each each, a “Company RSU Providian Stock-Based Award”) ), which is outstanding and which has not been settled by the issuance of shares of Company Common Stock immediately prior to the Effective Time (each an “Outstanding Company RSU Award”) shall cease to represent a right or award with respect to receive upon settlement thereof shares of Company Providian Common Stock and shall vest and be assumed by Parent and converted automatically converted, at the Effective Time, into a right or award with respect to receive upon settlement thereof a number of shares of Parent Washington Mutual Common Stock (a “Converted RSU Award”) in an amount determined as provided below (and each Converted RSU Award otherwise shall remain subject to the terms of the applicable Company Stock Plan, and the applicable agreement, notice or letter evidencing the grant of the Company RSU Award thereunder and any Benefit Plan providing for accelerated vesting). The number of shares of Parent Common Stock to be subject to the Converted RSU Award shall be equal to the product of (x) the number of shares of Company Providian Common Stock subject to the Outstanding Company RSU Providian Stock-Based Award and (y) the Exchange Ratio, provided that any fractional shares of Parent Washington Mutual Common Stock resulting from such multiplication shall be rounded down to the nearest whole shareshare (and the Converted Awards otherwise shall remain subject to the terms of the Plans and the agreements or letters evidencing grants thereunder). (c) The foregoing provisions of Section 2.4(a) and (b) shall not apply to the 1997 Employee Stock Purchase Plan or any other plan, program or arrangement intending to qualify as a stock purchase plan under Section 423 of the Code (the “Providian ESPP”). Prior The Providian ESPP and all outstanding rights thereunder shall terminate at the Effective Time and the offering periods thereunder shall be deemed to end on the NYSE trading day immediately prior to the Effective Time, and the Company rights of each participating Providian employee then outstanding shall take all action necessary be deemed to be taken automatically exercised on such NYSE trading day. On such trading day, each participating Providian employee will be credited with the number of shares of Providian Common Stock purchased for his or her account(s) under the Providian ESPP during such offering period. The Board of Directors of Providian shall send written notice of the Merger that will result in the termination of the Providian ESPP to all participating Providian employees not later than ten (10) Business Days prior to the Effective Time. (d) Except as provided herein or as otherwise agreed to by the Company parties, Providian shall ensure that following the Effective Time no holder of a Providian Option nor any holder of any Providian Stock-Based Award shall have any right to acquire equity securities of Providian or the Surviving Corporation (except to the extent required under any qualified plan maintained by Providian or any of its Subsidiaries). Promptly, but in order any event within two Business Days, following the Effective Time, Washington Mutual shall file a registration statement on Form S-8 (or any successor form, or if Form S-8 is not available, other appropriate forms) with respect to effect the foregoing provisions shares of this SectionWashington Mutual Common Stock subject to such Converted Options and Converted Awards and shall 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 Converted Options and Converted Awards remain outstanding.

Treatment of Options and Other Stock-Based Awards. (a) At the Effective Time, each outstanding option granted (or previously assumed) by the Company to purchase shares of Company Common Stock (a “Company Option”) issued pursuant to any Company Stock Incentive Plans (as defined in Section 2.4(d)), whether vested or unvested, shall be assumed by Acquiror and shall be honored by Acquiror in accordance with its terms following its conversion in the Merger into an option to purchase Acquiror Common Stock (“Acquiror Options”), except that Acquiror may at its option decide to cancel in exchange for a cash payment any Company Options held by Company Employees who reside outside of the United States. From and after the Effective Time, each Company Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Option, a number of shares of Acquiror Common Stock equal to the product of (I) the number of shares of Company Common Stock otherwise purchasable pursuant to such Company Option and (II) the Exchange Ratio, rounded down, if necessary, to the nearest whole share, at a price per share equal to (y) the exercise price per share of the Company Common Stock otherwise purchasable pursuant to such Company Option, divided by (z) the Exchange Ratio, rounded up to the nearest cent; provided, however, that in the case of any Company Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code (“incentive stock options”), the exercise price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in accordance with the method set forth above unless use of such method will not preserve the status of such options as incentive stock options, in which case the manner of determination shall be adjusted in a manner that both complies with Section 424(a) of the Code and results in the smallest modification in the economic values that otherwise would be achieved by the holder pursuant to the method set forth above. In all events, the foregoing substitution of all Company Options with Acquiror Options shall comply with the requirements of Section 409A of the Code and shall not cause any assumption or substitution of Company Options to be treated as a grant of a new stock right or a change in the form of payment within the meaning of Treas. Reg. §1.409A – 1(6)(5)(v)(D). (b) At the Effective Time, each right of any kind, contingent or accrued, to receive shares of the Company Common Stock or benefits measured by the value of a number of shares of Company Common Stock, and each award of any kind consisting of shares of Company Common Stock, granted under the Company Stock Incentive Plans (including restricted stock, restricted stock units, deferred stock units, performance shares (or units), phantom stock units and dividend equivalents), other than Company Options (each, a “Company OptionStock-Based Award”), which is outstanding and unexercised immediately prior to the Effective Time (each an “Outstanding Company Option”) shall cease to represent a right or award with respect to acquire shares of Company Common Stock and shall be EXECUTION COPY assumed by Parent and converted automaticallyconverted, at the Effective Time, into an option a right or award with respect to purchase a number of shares of Parent Acquiror Common Stock (a “Converted OptionAward”) in an amount and at an exercise price determined as provided below (and each Converted Option otherwise shall remain subject to the terms of the Company’s 2000 Equity Incentive Plan, or other governing share-based plan document, including plan documents governing options that have previously been assumed by the Company as a result of corporate acquisition transactions by the Company, as applicable (collectively, and in each case as the same may be amended to the date hereof, the “Company Stock Plans”) and the applicable agreement, notice or letter evidencing the grant of the Company Option thereunder and any Benefit Plan providing for accelerated vesting). (i) The number of shares of Parent Common Stock to be subject to the Converted Option shall be equal to the product of (x) the number of shares of Company Common Stock subject to the Outstanding Company Option Stock-Based Award and (y) the Exchange Ratio, provided provided, that any fractional shares of Parent Acquiror Common Stock resulting from such multiplication shall be rounded down to the nearest whole share; and (ii) the exercise price per share of Parent Common Stock under and the Converted Option shall be equal to the exercise price per share of Company Common Stock under the Outstanding Company Option divided by the Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. In the case of any Outstanding Company Option which is, immediately prior to the Effective Time, an “incentive stock option” (as defined in Section 422 of the Code), the exercise price, the number of shares purchasable pursuant to the corresponding Converted Option and the terms and conditions of exercise of such Converted Option shall be determined in order to comply with Section 424(a) of the Code and to avoid a “modification” of any such option under Code Section 424(h). In all events, Outstanding Company Options shall be converted into Converted Options in such a manner as to be compliant with Section 409A of the Code (or an available exemption therefrom) and any guidance issued thereupon by the U.S. Department of Treasury. Except as otherwise provided in this section, the duration and other terms of each Converted Option shall be the same as those of the applicable Outstanding Company Option, except that all references to the Company shall be deemed to be references to Parent. Prior to the Effective Time, the Company shall take all action necessary to be taken by the Company in order to effect the foregoing provisions of this section. (b) At the Effective Time, each restricted stock unit award granted (or previously assumed) by the Company representing a right to receive upon a future date or dates shares of Company Common Stock (each a “Company RSU Award”) which is outstanding and which has not been settled by the issuance of shares of Company Common Stock immediately prior to the Effective Time (each an “Outstanding Company RSU Award”) shall cease to represent a right to receive upon settlement thereof shares of Company Common Stock and shall be assumed by Parent and converted automatically into a right to receive upon settlement thereof shares of Parent Common Stock (a “Converted RSU Award”) in an amount determined as provided below (and each Converted RSU Award Awards otherwise shall remain subject to the terms of the applicable Company Stock Plan, Incentive Plan and the applicable agreement, notice agreements or letter letters evidencing grants thereunder after giving effect to any rights resulting exclusively from the grant of transactions contemplated under this Agreement pursuant to the Company RSU Award thereunder Stock Incentive Plans and any Benefit Plan providing the award agreements thereunder. (c) Acquiror shall take all corporate action necessary to reserve for accelerated vesting). The issuance a sufficient number of shares of Parent Acquiror Common Stock for delivery upon exercise or settlement of Acquiror Options and Converted Awards issued in substitution for Company Options and Company Stock-Based Awards in accordance with Sections 2.4(a) and 2.4(b). As soon as practicable after the Effective Time, Acquiror shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor or other appropriate forms), with respect to Acquiror Common Stock subject to such Acquiror Options and other Acquiror equity-based award including restricted stock, restricted stock units, deferred stock units, performance shares (or units), phantom stock units and dividend equivalents (each, an “Acquiror Stock-Based Award”), and shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such Acquiror Options and Acquiror Stock-Based Awards remain outstanding. (d) The Company shall ensure that following the Effective Time no holder of any equity-based right under the Company’s 2001 Equity Incentive Plan, the 2005 Equity Incentive Plan and the 2008 Equity Incentive Plan (each as amended, supplemented or otherwise modified from time to time, and collectively, the “Company Stock Incentive Plans”) and any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company or any Subsidiary thereof, shall have any right to acquire equity securities of the Company or the Surviving Company. (e) The Company shall take all actions necessary to (i) terminate the offering period currently in effect under the Company 2005 Employee Stock Purchase Plan (the “Company ESPP”) effective as soon as practicable after the date of this Agreement, (ii) provide that no new offering periods commence thereafter under the Company ESPP, (iii) provide that there will be no increase in the amount of payroll deductions permitted to be subject to made by the Converted RSU Award shall participants therein during the current period and (iv) provide that on the last day of the current offering period as shortened hereunder, each participant in the applicable Company ESPP will be equal to the product of (x) credited with the number of shares share(s) of Company Common Stock subject to purchased for his or her account(s) under the Outstanding applicable Company RSU Award and (yESPP in respect of the applicable offering period, as shortened, in accordance with section 14(b)(ii) of the Exchange Ratio, provided that any fractional shares of Parent Common Stock resulting from such multiplication shall be rounded down to the nearest whole shareCompany ESPP. Prior to the Effective TimeIn addition, the Company shall take all action actions necessary to be taken by terminate the Company in order to effect ESPP effective as of the foregoing provisions of this SectionEffective Time.

Treatment of Options and Other Stock-Based Awards. (a) At the Effective Time, each outstanding option granted (or previously assumed) by the Company to purchase shares of Company Common Stock (a “Company Option”) issued pursuant to any Company Stock Incentive Plans (as defined in Section 2.4(d)), whether vested or unvested, shall be assumed by Acquiror and shall be honored by Acquiror in accordance with its terms following its conversion in the Merger into an option to purchase Acquiror Common Stock (“Acquiror Options”), except that Acquiror may at its option decide to cancel in exchange for a cash payment any Company Options held by Company Employees who reside outside of the United States. From and after the Effective Time, each Company Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Option, a number of shares of Acquiror Common Stock equal to the product of (I) the number of shares of Company Common Stock otherwise purchasable pursuant to such Company Option and (II) the Exchange Ratio, rounded down, if necessary, to the nearest whole share, at a price per share equal to (y) the exercise price per share of the Company Common Stock otherwise purchasable pursuant to such Company Option, divided by (z) the Exchange Ratio, rounded up to the nearest cent; provided, however, that in the case of any Company Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code (“incentive stock options”), the exercise price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in accordance with the method set forth above unless use of such method will not preserve the status of such options as incentive stock options, in which case the manner of determination shall be adjusted in a manner that both complies with Section 424(a) of the Code and results in the smallest modification in the economic values that otherwise would be achieved by the holder pursuant to the method set forth above. In all events, the foregoing substitution of all Company Options with Acquiror Options shall comply with the requirements of Section 409A of the Code and shall not cause any assumption or substitution of Company Options to be treated as a grant of a new stock right or a change in the form of payment within the meaning of Treas. Reg. §1.409A — 1(6)(5)(v)(D). (b) At the Effective Time, each right of any kind, contingent or accrued, to receive shares of the Company Common Stock or benefits measured by the value of a number of shares of Company Common Stock, and each award of any kind consisting of shares of Company Common Stock, granted under the Company Stock Incentive Plans (including restricted stock, restricted stock units, deferred stock units, performance shares (or units), phantom stock units and dividend equivalents), other than Company Options (each, a “Company OptionStock-Based Award”), which is outstanding and unexercised immediately prior to the Effective Time (each an “Outstanding Company Option”) shall cease to represent a right or award with respect to acquire shares of Company Common Stock and shall be EXECUTION COPY assumed by Parent and converted automaticallyconverted, at the Effective Time, into an option a right or award with respect to purchase a number of shares of Parent Acquiror Common Stock (a “Converted OptionAward”) in an amount and at an exercise price determined as provided below (and each Converted Option otherwise shall remain subject to the terms of the Company’s 2000 Equity Incentive Plan, or other governing share-based plan document, including plan documents governing options that have previously been assumed by the Company as a result of corporate acquisition transactions by the Company, as applicable (collectively, and in each case as the same may be amended to the date hereof, the “Company Stock Plans”) and the applicable agreement, notice or letter evidencing the grant of the Company Option thereunder and any Benefit Plan providing for accelerated vesting). (i) The number of shares of Parent Common Stock to be subject to the Converted Option shall be equal to the product of (x) the number of shares of Company Common Stock subject to the Outstanding Company Option Stock-Based Award and (y) the Exchange Ratio, provided provided, that any fractional shares of Parent Acquiror Common Stock resulting from such multiplication shall be rounded down to the nearest whole share; and (ii) the exercise price per share of Parent Common Stock under and the Converted Option shall be equal to the exercise price per share of Company Common Stock under the Outstanding Company Option divided by the Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. In the case of any Outstanding Company Option which is, immediately prior to the Effective Time, an “incentive stock option” (as defined in Section 422 of the Code), the exercise price, the number of shares purchasable pursuant to the corresponding Converted Option and the terms and conditions of exercise of such Converted Option shall be determined in order to comply with Section 424(a) of the Code and to avoid a “modification” of any such option under Code Section 424(h). In all events, Outstanding Company Options shall be converted into Converted Options in such a manner as to be compliant with Section 409A of the Code (or an available exemption therefrom) and any guidance issued thereupon by the U.S. Department of Treasury. Except as otherwise provided in this section, the duration and other terms of each Converted Option shall be the same as those of the applicable Outstanding Company Option, except that all references to the Company shall be deemed to be references to Parent. Prior to the Effective Time, the Company shall take all action necessary to be taken by the Company in order to effect the foregoing provisions of this section. (b) At the Effective Time, each restricted stock unit award granted (or previously assumed) by the Company representing a right to receive upon a future date or dates shares of Company Common Stock (each a “Company RSU Award”) which is outstanding and which has not been settled by the issuance of shares of Company Common Stock immediately prior to the Effective Time (each an “Outstanding Company RSU Award”) shall cease to represent a right to receive upon settlement thereof shares of Company Common Stock and shall be assumed by Parent and converted automatically into a right to receive upon settlement thereof shares of Parent Common Stock (a “Converted RSU Award”) in an amount determined as provided below (and each Converted RSU Award Awards otherwise shall remain subject to the terms of the applicable Company Stock Plan, Incentive Plan and the applicable agreement, notice agreements or letter letters evidencing grants thereunder after giving effect to any rights resulting exclusively from the grant of transactions contemplated under this Agreement pursuant to the Company RSU Award thereunder Stock Incentive Plans and any Benefit Plan providing the award agreements thereunder. (c) Acquiror shall take all corporate action necessary to reserve for accelerated vesting). The issuance a sufficient number of shares of Parent Acquiror Common Stock for delivery upon exercise or settlement of Acquiror Options and Converted Awards issued in substitution for Company Options and Company Stock-Based Awards in accordance with Sections 2.4(a) and 2.4(b). As soon as practicable after the Effective Time, Acquiror shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor or other appropriate forms), with respect to Acquiror Common Stock subject to such Acquiror Options and other Acquiror equity-based award including restricted stock, restricted stock units, deferred stock units, performance shares (or units), phantom stock units and dividend equivalents (each, an “Acquiror Stock-Based Award”), and shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such Acquiror Options and Acquiror Stock-Based Awards remain outstanding. (d) The Company shall ensure that following the Effective Time no holder of any equity-based right under the Company’s 2001 Equity Incentive Plan, the 2005 Equity Incentive Plan and the 2008 Equity Incentive Plan (each as amended, supplemented or otherwise modified from time to time, and collectively, the “Company Stock Incentive Plans”) and any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company or any Subsidiary thereof, shall have any right to acquire equity securities of the Company or the Surviving Company. (e) The Company shall take all actions necessary to (i) terminate the offering period currently in effect under the Company 2005 Employee Stock Purchase Plan (the “Company ESPP”) effective as soon as practicable after the date of this Agreement, (ii) provide that no new offering periods commence thereafter under the Company ESPP, (iii) provide that there will be no increase in the amount of payroll deductions permitted to be subject to made by the Converted RSU Award shall participants therein during the current period and (iv) provide that on the last day of the current offering period as shortened hereunder, each participant in the applicable Company ESPP will be equal to the product of (x) credited with the number of shares share(s) of Company Common Stock subject to purchased for his or her account(s) under the Outstanding applicable Company RSU Award and (yESPP in respect of the applicable offering period, as shortened, in accordance with section 14(b)(ii) of the Exchange Ratio, provided that any fractional shares of Parent Common Stock resulting from such multiplication shall be rounded down to the nearest whole shareCompany ESPP. Prior to the Effective TimeIn addition, the Company shall take all action actions necessary to be taken by terminate the Company in order to effect ESPP effective as of the foregoing provisions of this SectionEffective Time.

Treatment of Options and Other Stock-Based Awards. (a) At the Effective Time, each Each option granted (or previously assumed) by the Company to purchase shares of Company Common Stock (a “Company Option”) granted pursuant to the TSFG Stock Option Plan, the TSFG Long Term Incentive Plan, the Carolina First Corporation Directors’ Stock Option Plan, the Carolina First Corporation Amended and Restated Fortune 50 Plan, the 1995 Nonstatutory Stock Option Plan of Gulf West Banks, Inc., the MountainBank 1997 Employee Stock Option Plan, the Florida Banks, Inc. 1998 Stock Option Plan, the 1998 Performance-Based Incentive Plan of CNB, Inc. and the Pointe Financial Corporation 1998 Incentive Compensation and Stock Award Plan (each, a “Company OptionStock Option Plan”), which whether vested or unvested, that is outstanding and unexercised immediately prior to the Effective Time (each an “Outstanding Company Option”) shall cease to represent a right to acquire shares of Company Common Stock and shall be EXECUTION COPY assumed by Parent and converted automaticallyconverted, at the Effective Time, into an option to purchase shares Parent Common Shares (a “Parent Option”), on the same terms and conditions as were applicable under such Company Option but taking into account any changes thereto, including, (1) for Company Options that are outstanding under the Florida Banks, Inc. 1998 Stock Option Plan and the MountainBank 1997 Employee Stock Option Plan, the full acceleration of vesting thereof to a date that is at least 60 days prior to the Closing Date (or such earlier date as may be otherwise required under the MountainBank 1997 Employee Stock Option Plan) and the termination, without payment therefor, of such Company Options at the Effective Time and (2) for Company Options that are outstanding under the TSFG Stock Option Plan, the full acceleration of vesting thereof immediately prior to the Closing Date and the termination, without payment therefor, of such Company Option no less than 31 days after the Effective Time. The number of Parent Common Stock (a “Converted Option”) in an amount and at an exercise price determined as provided below (and each Converted Option otherwise shall remain Shares subject to the terms of the Company’s 2000 Equity Incentive Plan, or other governing share-based plan document, including plan documents governing options that have previously been assumed by the Company as a result of corporate acquisition transactions by the Company, as applicable (collectively, and in each case as the same may be amended to the date hereof, the “Company Stock Plans”) and the applicable agreement, notice or letter evidencing the grant of the Company Option thereunder and any Benefit Plan providing for accelerated vesting). (i) The number of shares of Parent Common Stock to be subject to the Converted Option shall be equal to the product of (x) the number of shares of Company Common Stock subject to the Outstanding each such Company Option and (y) multiplied by the Exchange Ratio, provided that any fractional shares of Parent Common Stock resulting from such multiplication shall be rounded rounded, if necessary, down to the nearest whole share; and (ii) the Parent Common Share, and such Parent Option shall have an exercise price per share of Parent Common Stock under the Converted Option shall be equal to the per share exercise price per share of Company Common Stock under the Outstanding specified in such Company Option divided by the Exchange Ratio, provided that such exercise price shall be rounded rounded, if necessary, up to the nearest cent. In ; provided, however, in the case of any Outstanding Company Option to which is, immediately prior to Section 421 of the Effective Time, an “incentive stock option” (as defined in Code applies by reason of its qualification under Section 422 of the CodeCode (“incentive stock options”), the exercise price, the number of shares purchasable pursuant to the corresponding Converted such Company Option and the terms and conditions of exercise of such Converted Company Option shall be determined in order to comply accordance with the method set forth above unless the use of such method will not preserve the status of such Company Options as incentive stock options, in which case the manner of determination shall be adjusted in a manner that both complies with Section 424(a) of the Code and results in the smallest adverse modification in the economic values that otherwise would be achieved by the holder pursuant to avoid a “modification” of any such option under Code Section 424(h)the method set forth above. In all events, Outstanding the foregoing substitution of all Company Options with Parent Options shall be converted into Converted Options in such a manner as to be compliant comply with the requirements of Section 409A of the Code Code. (b) Each share of Company Common Stock granted subject to vesting or an available exemption therefromother lapse restrictions (including any Company Common Stock dividend equivalents accrued in respect of such shares) (each, a “Company Restricted Share”) pursuant to the TSFG Amended and Restated Restricted Stock Agreement Plan or any guidance issued thereupon Company Stock Option Plan (each, a “Company Stock Incentive Plan”) which is outstanding immediately prior to the Effective Time shall vest and become free of such restrictions as of the Effective Time to the extent provided by the U.S. Department of Treasury. Except as otherwise provided in this sectionterms thereof and, the duration and other terms of each Converted Option shall be the same as those of the applicable Outstanding Company Option, except that all references to the Company shall be deemed to be references to Parent. Prior to at the Effective Time, such Company Restricted Shares shall be treated in the same manner as all other shares of Company shall take all action necessary to be taken by the Company in order to effect the foregoing provisions Common Stock under Section 2.1 of this sectionAgreement. (bc) Each outstanding stock appreciation right (a “Company SAR”) granted pursuant to a Company Stock Incentive Plan, whether vested or unvested, that is outstanding immediately prior to the Effective Time shall cease to represent a right to receive cash upon exercise of such Company SAR and shall be converted, at the Effective Time, into a stock appreciation right with respect to Parent Common Shares (a “Parent SAR”), on the same terms and conditions as were applicable under such Company SAR (including the settlement of such Parent SARs in cash), but taking into account any changes thereto, including the acceleration of vesting thereof if provided for in the Company Stock Incentive Plans, in any award agreement or in such Company SAR by reason of this Agreement or the transactions contemplated hereby. The number of Parent Common Shares subject to each such Parent SAR shall be the number of shares of Company Common Stock subject to each such Company SAR multiplied by the Exchange Ratio, rounded, if necessary, down to the nearest whole Parent Common Share, and such Parent SAR shall have an exercise price per share equal to the per share exercise price specified in such Company SAR divided by the Exchange Ratio, rounded, if necessary, up to the nearest cent. (d) At the Effective Time, each restricted stock unit award granted (or previously assumed) by the Company representing a right to receive upon a future date or dates shares of including any Company Common Stock dividend equivalents accrued in respect of such restricted stock unit) (each a “Company RSU AwardRSU”) ), whether vested or unvested, which is outstanding and which has not been settled by the issuance of shares of Company Common Stock immediately prior to the Effective Time (each an “Outstanding Company RSU Award”) shall cease to represent a right or award with respect to receive upon settlement thereof shares of Company Common Stock and shall be assumed by Parent and converted automatically converted, at the Effective Time, into a vested right to receive upon settlement thereof shares of Parent Common Stock (a “Converted RSU Award”) cash, in an amount determined as provided below (and each Converted RSU Award otherwise shall remain subject to accordance with the terms of the applicable Company Stock Incentive Plan, and the applicable agreement, notice or letter evidencing the grant of the Company RSU Award thereunder and any Benefit Plan providing for accelerated vesting). The number of shares of Parent Common Stock to be subject to the Converted RSU Award shall be equal to the product of (x) the Cash Consideration and (y) the number of shares of Company Common Stock (including any Company Common Stock dividend equivalents accrued in respect of such shares) subject to each Company RSU outstanding, which cash shall be paid out in accordance with the terms of the applicable Company Stock Incentive Plan. (e) Further, as soon as practicable after the Effective Time, Parent shall or shall cause the Surviving Company to, deliver to the holders of Parent Options and Parent SARs, as applicable, appropriate notices setting forth such holders’ rights pursuant to the respective Company Stock Incentive Plans and agreements evidencing the grant agreements and stating that the corresponding Company Options and Company SARs, as applicable, and agreements have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the Outstanding adjustments required by this Section 2.4 after giving effect to the Merger and the terms of the Company RSU Award Stock Incentive Plans) as provided above. (f) The provisions of clauses (a) through (e) of this Section 2.4 shall not apply to the Amended and Restated TSFG Employee Stock Purchase Plan or any other plan, program or arrangement intending to qualify as a stock purchase plan under Section 423 of the Code (the “Company ESPPs”). The Company shall, prior to the Effective Time, take all actions necessary to terminate the Company ESPPs effective as of the Effective Time and all outstanding rights thereunder at the Effective Time, and ensure that no new offering periods thereunder commence during the period from the date of this Agreement through the Effective Time. The offering periods thereunder currently in effect as of the date of this Agreement shall end in accordance with the terms of the applicable Company ESPP; provided, that there will be no increase in the amount of payroll deductions permitted to be made by the participants therein during such period; and provided further that, on the last day of the current offering periods, each participant in the applicable Company ESPP will be credited with the number of share(s) of Company Common Stock purchased for his or her account(s) under the applicable Company ESPP in respect of the applicable offering period in accordance with the terms of the applicable Company ESPP. (g) The Company shall take such action as shall be required to (i) terminate the Dividend Reinvestment Plan immediately prior to and effective as of the Effective Time and (yii) ensure that all Company Common Stock and, if applicable, all Company Preferred Stock held in the Exchange Ratio, provided that Company tax-qualified defined contribution plan and in respect of any fractional liabilities under the Company’s Executive Deferred Compensation Plan is treated in the same manner as all other shares of Parent Company Common Stock resulting from such multiplication shall be rounded down to the nearest whole share. under Section 2.1 of this Agreement. (h) Prior to the Effective Time, the Company shall take all action necessary to be taken pass such resolutions for the treatment of Company Options and Company SARs as contemplated by the Company in order to effect the foregoing provisions of this SectionSection 2.4. Parent shall reserve for issuance a number of Parent Common Shares at least equal to the number of Parent Common Shares that will be subject to Parent Options and Parent SARs as a result of the actions contemplated by this Section 2.4. As soon as practicable after the Effective Time, Parent shall file a registration statement on Form F-3 or Form F-8 (or any successor or other appropriate form) with respect to the Parent Common Shares subject to such Parent Options and other Parent stock-based awards and shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such Parent Options or Parent stock-based awards remain outstanding.