Common use of Treatment of Options Clause in Contracts

Treatment of Options. Prior to the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx Common Stock (each, an "Option") to be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Stock equal to the number of shares of Xxxxxx Common Stock issuable immediately prior to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective Time; provided, however, that in the case of any Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code, the conversion formula shall be adjusted, if necessary, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stock.

Treatment of Options. Prior to At the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary each option granted by the Company to cause each unexpired purchase shares of Company Common Stock that is outstanding and unexercised optionunder any employee stock option or equity compensation plan or arrangement (the “Company Stock Plans”) of the Company (any such option to purchase Company Common Stock being referred to as a “Company Option” or the “Company Options”), whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx Common Stock (each, an "Option") to shall fully vest and be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that purchase a number of shares of Surviving Corporation Parent Common Stock (a “Parent Option”) equal to the product (rounded down to the nearest whole share) of (x) the number of shares of Xxxxxx Company Common Stock issuable immediately prior subject to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding Company Option immediately prior to the Merger Effective TimeTime and (y) the Exchange Ratio, at an exercise price per share of Parent Common Stock (rounded up to the nearest whole cent) subject to the Parent Option equal to the quotient obtained by dividing (x) the exercise price per share of Company Common Stock subject to the Company Option immediately prior to the Effective Time by (y) the Exchange Ratio; provided, however, that the exercise price and the number of shares of Parent Common Stock purchasable pursuant to the Company Options shall be determined in a manner consistent with the requirements of Section 409A of the Internal Revenue Code; and provided, further, that in the case of any Company Option that is intended to which Section 421 of the Code applies by reason of its qualification be an incentive stock option under Section 422 of the Internal Revenue Code, the conversion formula exercise price and the number of shares of Parent Company Stock purchasable pursuant to such option shall be adjusteddetermined in accordance with the foregoing, if necessary, subject to comply with such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Internal Revenue Code. In connection with Except as specifically provided above, following the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject each Company Option shall continue to be governed by the same terms and conditions that were applicable thereto. Prior under such Company Option immediately prior to the Merger Effective Time (after taking into account any vesting as of the Effective Time to the extent provided by the original terms of the Company Option). As of the Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, Parent shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the assume such Company Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards plans under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stockwhich they have been issued.

Treatment of Options. Prior to As of the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary each option to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans purchase shares of Xxxxxx with respect to Xxxxxx Company Common Stock granted pursuant to a Company Equity Plan or otherwise (each, an "a “Company Option"”) that is outstanding immediately prior to be automatically converted at the Merger Effective Time (whether vested or unvested) shall, without any further action on the part of any holder thereof, be assumed and converted into an option (an "Exchange Option") to purchasepurchase from Parent, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this AgreementCompany Option, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation common stock of Parent, par value $0.01 (the “Parent Common Stock Stock”) (rounded down to the nearest whole share) equal to (x) the product of (A) the number of shares of Xxxxxx Company Common Stock issuable immediately prior subject to the Merger Effective Time upon exercise of the such Company Option and (B) the quotient obtained by dividing (i) the Merger Consideration by (ii) the Parent Measurement Price (such quotient, the “Exchange Ratio”), at a an exercise price per Parent Common Stock (rounded up to the nearest whole cent) equal to the quotient obtained by dividing (i) the exercise price per share equal of Company Common Stock subject to such Company Option by (ii) the exercise price which existed under the corresponding Option immediately prior to the Merger Effective TimeExchange Ratio (each, as so adjusted, a “Converted Parent Option”); provided, however, that in the case of any Option Company Options to which Section 421 of the Code applies as of the Effective Time by reason of its qualification under Section 422 of the Code, the conversion formula exercise price, the number of shares of Parent Common Stock subject to such option and the terms and conditions of exercise of such option shall be adjusted, if necessary, to comply determined in a manner consistent with the requirements of Section 424(a) of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject to Exchange Options pursuant to All rounding described in this Section 1.9 2.3(a) shall be done on an aggregate basis. The Converted Parent Options shall have the same vesting schedule (including any acceleration of vesting as provided in the Company Equity Plans or an applicable award agreement) as the Company Options and (b) from and after otherwise shall have the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the same terms and conditions as were applicable thereto. Prior to such Company Options; provided, that Parent shall convert Company Options into Converted Parent Options in a manner that would not cause the Merger Effective Time, Converted Parent Options to be treated as the Board grant of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation new stock right for purposes of Section 16(b) 409A of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common StockCode.

Treatment of Options. Prior to (a) Effective upon the Merger Effective TimeClosing, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans to purchase shares of Xxxxxx with respect to Xxxxxx Company Common Stock (eacheach a "Company Option") under the Company's 1997 Stock Option Plan, as amended through April 7, 1999 (the "Company Stock Option Plan") shall be deemed to be automatically converted into an option (a "Parent Option") to be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that purchase a number of shares of Surviving Corporation Parent Common Stock equal to the number of shares of Xxxxxx Company Common Stock issuable immediately prior that could have been purchased under the Company Option multiplied by the Conversion Number (with the resulting number of shares being rounded to the Merger Effective Time upon exercise of the Option and (ii) nearest whole share), at a price per share of Parent Common Stock equal to the option exercise price of the Company Option, divided by the Conversion Number provided, that there shall be no accelerated exercisability of any Company Option solely as a result of consummation of the Merger except as provided in employment contracts in effect as of the date hereof and, provided further, the shares of Parent Common Stock issuable upon exercise of the Parent Option thereof shall be subject to a "lock-up" period of 180 days after the Closing, wherein such shares may not be sold or otherwise disposed, and such "lock up" period shall be provided for under each of the Company Option holder's stock option agreements. The date of grant of the applicable Parent Option shall be the date on which existed under the corresponding Company Option immediately prior to was granted. (b) Effective upon the Merger Effective Time; providedClosing, however, that in the case of any Option to which Section 421 Parent shall (i) assume all of the Code applies Company's obligations with respect to Company Options as contemplated by reason of its qualification under Section 422 of the Code1.6(a) above, the conversion formula shall be adjusted, if necessary, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (aii) reserve for issuance the number of shares of Surviving Corporation Parent Common Stock that will become subject to Exchange Parent Options pursuant to this Section 1.9 in accordance with the terms thereof, and (biii) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Parent Common Stock covered thereby, subject to . (c) Not later than one hundred eighty (180) days after the terms and conditions applicable thereto. Prior to the Merger Effective TimeClosing, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, Parent shall adopt resolutions consistent prepare and file with the interpretive guidance SEC a registration statement on Form S-8 (or another appropriate form) registering the number of shares of Parent Common Stock issuable upon the exercise of all Company Options assumed by Parent with Parent Options pursuant to Section 1.6(a) above, and shall use its best efforts to cause the offer and sale of such shares to be registered under the Securities Act and to maintain such registration in effect until the exercise or termination of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Company Options and the acquisition termination of all of the Exchange Options, any shares of Surviving Corporation Common Company Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common StockOption Plan.

Treatment of Options. Prior to At the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired outstanding and unexercised optionoption to purchase Shares (a “Company Option”) under the Stock Plans, whether or not vested or exercisableunvested, under stock shall cease to represent an option plans to purchase Shares and will be converted automatically into (1) options to purchase a number of Xxxxxx shares of Parent Common Stock equal to the product (rounded down to the nearest whole number) of (x) the number of Shares subject to the Company Option immediately prior to the Effective Time and (y) the Conversion Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per Share of such Company Option immediately prior to the Effective Time divided by (B) the Conversion Ratio and (2) the right of the holder of such Company Option to receive, as soon as reasonably practicable after the Effective Time, an amount in cash equal to the product of (i) the fraction of a whole share of Parent Common Stock that would have resulted from the calculation pursuant to the preceding clause (1) but for the rounding specified therein and (ii) the Parent Trading Price (rounded up or down, as applicable, to the nearest whole cent), less applicable Taxes required to be withheld with respect to Xxxxxx such cash payment (the resultant Parent Common Stock option and right to cash specified in clauses (each1) and (2), an "Option"the “Company Option Consideration”); provided, however, that the exercise price and the number of shares of Parent Common Stock purchasable pursuant to the Company Options shall be determined in a manner consistent with the requirements of Section 409A of the Code; provided further that in the case of any Company Option to which Section 422 of the Code applies, the exercise price and the number of shares of Parent Company Stock purchasable pursuant to such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. Except as specifically provided above, following the Effective Time, each Company Option shall continue to be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase, on governed by the same terms and conditions as were applicable to each under such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Stock equal to the number of shares of Xxxxxx Common Stock issuable immediately prior to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding Company Option immediately prior to the Merger Effective Time; provided. For purposes of this Agreement, however“Conversion Ratio” shall mean the Exchange Ratio, that unless the provisions of Section 4.1(a)(ii)(x) or (y) are applicable, in which case the case “Conversion Ratio” shall mean the sum of any Option to which Section 421 (i) the product of the Code applies by reason of its qualification under Section 422 of the Code, the conversion formula shall be adjusted, if necessary, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall Ratio (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject to Exchange Options as in effect pursuant to this Section 1.9 and 4.1(a)(ii)(x) or (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereofy), as applicable) multiplied by 67%, shall adopt resolutions consistent with plus (ii) the interpretive guidance quotient obtained by dividing (x) the product of (A) the U.S. Securities and Exchange Commission Per Share Cash Consideration multiplied by (B) 33% by (y) the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common StockParent Trading Price.

Treatment of Options. Prior to the Merger Effective TimeClosing, Xxxxxx and Merger Sub the Company’s Board of Directors (or, if appropriate, any committee thereof administering the Equity Incentive Plan) shall adopt such resolutions or take all such other actions as may be necessary required to cause each unexpired and unexercised optionprovide that, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx Common Stock (each, an "Option") to be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this AgreementEffective Time and subject to the Option Tax Ruling, that result from each outstanding Company Option, whether vested or unvested, shall be exchanged by Parent for an equivalent award under the occurrence Parent Equity Incentive Plan (each: a “Converted Stock Option”), and shall be in full force and effect, containing the same terms, conditions, vesting and other provisions of the TransactionsCompany Option immediately prior to the Closing (subject to any accelerated vesting provided for in the Equity Incentive Plan or in the related Company Option agreement by reason of the transactions contemplated hereby), (i) except that service or employment with the Company and/or any of its Subsidiaries prior to the Closing shall be counted under each Converted Stock Option for vesting purposes to the same extent as service or employment was counted under the respective Company Option for vesting purposes and each Converted Stock Option shall be exercisable for such number of shares of Surviving Corporation Parent Common Stock (rounded up to the nearest whole share), determined by multiplying the number of Company Capital Shares subject to such Company Option as of immediately prior to the Effective Time by the Conversion Ratio, at an exercise price per share of Parent Common Stock (rounded down to the nearest whole cent) equal to (A) the exercise price per share of Company Capital Shares of such Company Option divided by (B) the Conversion Ratio; provided, however, that, other than with respect to Converted Stock Option resulting from the exchange of a 102 Option or a 3(i) Option, the exercise price and the number of shares of Xxxxxx Parent Common Stock issuable immediately prior to covered by each Converted Stock Option shall be determined in a manner consistent with the Merger Effective Time upon exercise requirements of the Option Sections 409A and (ii) at a price per share equal to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective Time; provided, however, that in the case of any Option to which Section 421 422 of the Code applies by reason of its qualification under Section 422 of the Code, the conversion formula shall be adjusted, if necessary, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and applicable regulations promulgated thereunder (so as to avoid the "Exchange Act"), shall be exempt for purposes imposition of any additional Taxes under Section 16 409A of the Exchange Act. Restricted stock units with respect Code (and regulations issued by the IRS thereunder) or the disqualification as an ISO of any Company Option that is intended to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common StockISO.

Treatment of Options. Prior (a) At the Effective Time of the Merger, each outstanding option to the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx purchase Company Common Stock (each, an a "Company ------- Stock Option") issued pursuant to the CSS Acquisition Corporation 2000 Special ------------ Stock Incentive Plan or the CSS Acquisition Corporation 2000 Stock Plan (the "Company Stock Plans"), whether vested or unvested, shall be automatically converted at the Merger Effective Time into deemed to ------------------- constitute an option (an "Exchange Option") to purchaseacquire, on the same terms and conditions as were applicable to each under such Option immediately before Company Stock Option, the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that same number of shares of Surviving Corporation Parent Common Stock equal as the holder of such Company Stock Option would have been entitled to receive pursuant to the number of shares of Xxxxxx Common Stock issuable Merger had such holder exercised such option in full immediately prior to the Merger Effective Time upon exercise of the Merger (without giving effect to the Option and (ii) Exercise Adjustment), at a price per share equal to (y) the aggregate exercise price which existed under for the corresponding shares of Company Common Stock otherwise purchasable pursuant to such Company Stock Option immediately prior divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to the Merger Effective Timesuch Company Stock Option; provided, howeverin determining the aggregate exercise price for the shares of Company Common Stock under (y) above, fractions of a cent shall be rounded up to the nearest cent; provided, in determining the number of shares of Parent Common Stock under (z) above, fractional shares shall be rounded down to the nearest whole share and; provided, further, that in the case of any Option option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the CodeCode ("incentive stock options"), the conversion formula option price, the number of shares ----------------------- purchasable pursuant to such option and the terms and conditions of exercise of such option shall be adjusted, if necessary, determined in order to comply with Section 424(a) of the Code. (b) As soon as practicable after the Effective Time of the Merger, Parent shall deliver to the holders of Company Stock Options appropriate notices setting forth such holders' rights pursuant to the Company Stock Plans and the agreements evidencing the grants of such Company Stock Options shall continue in effect on the same terms and conditions (subject to adjustments required by this Section 2.3 after giving effect to the Merger and the provisions set forth above and until otherwise determined). In connection If necessary, Parent shall comply with the issuance terms of Exchange Optionsthe Company Stock Plans and ensure, to the extent required by, and subject to the provisions of, the Surviving Corporation Company Stock Plans, that Company Stock Options that qualified as incentive stock options prior to the Effective Time of the Merger continue to qualify as incentive stock options after the Effective Time of the Merger. (c) Prior to the Effective Time of the Merger, Parent shall (a) have taken all corporate action necessary to reserve for issuance the a sufficient number of shares of Surviving Corporation Parent Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, for delivery upon exercise of Exchange Company Stock Options. As soon as practicable after the Effective Time of the Merger, make available for issuance all shares of Surviving Corporation Common Stock covered therebyParent shall file a registration statement on Form S-3 or Form S-8, subject to as the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxxcase may be (or any successor or other appropriate forms), or an another appropriate committee of non-employee directors thereofform, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx the shares of Parent Common Stock subject to such options and other incentive compensation awards shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (including awards under and maintain the LTAP (current status of the prospectus or prospectuses contained therein) for so long as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stocksuch options remain outstanding.

Treatment of Options. Prior (a) Purchaser and Company agree that they shall each take all actions necessary such that at the Closing Date each outstanding option or right to acquire Shares ("COMPANY OPTION") granted under any stock option or similar plan of the Company or under any agreement to which the Company or a Subsidiary is a party shall become vested and exercisable and each holder of Company Options shall be entitled at the Closing Date to elect by notice to the Merger Effective Time, Xxxxxx and Merger Sub Purchaser either option (i) or (ii) below in respect of that holder's Company Options: (i) The Purchaser shall take all pay against cancellation of the applicable Company Option to such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans holder within 72 hours of Xxxxxx the Closing Date with respect to Xxxxxx Common Stock each of such holder's Company Options an amount equal to the product of (each, an A) the excess of the Offer Price over the exercise price for that Company Option (the "OptionOPTION SPREAD") multiplied by (B) the number of Shares subject to that Company Option, which amount shall be automatically converted paid at such holder's option in cash or Purchaser Shares (with the Merger Effective Time into an value of Purchaser Shares for purposes of paying the Option Spread being equal to the Average Price), provided that holders of Company Options electing this option (an "Exchange Option"i) shall be subject to purchaseproration such that such holders shall not receive in the aggregate greater than 60 percent. of their consideration in cash. (ii) At the Closing Date, each of such holder's Company Options shall be deemed to constitute options to acquire, on the same terms and conditions as were applicable to each under such Option immediately before Company Options, the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Stock Purchaser Shares equal to the result (rounded down to the nearest whole share) of multiplying the number of shares of Xxxxxx Common Stock issuable Shares subject to the Company Option immediately prior to the Merger Effective Time upon Closing Date by the Conversion Ratio (as defined below), at an exercise of the Option and (ii) at a price per share equal to the result (rounded down to the nearest whole share) of dividing (A) the per share exercise price which existed under the corresponding of such Company Option immediately prior to the Merger Effective TimeClosing Date by (B) the Conversion Ratio; provided, however, that in the case of any Company Option to which Section 421 422 of the Code applies by reason applies, the adjustments provided for in this Section shall be effected in a manner consistent with the requirements of its qualification under Section 422 42(a) of the Code, the conversion formula and provided, further, that each holder of a Company Option electing this option shall be adjusted, if necessary, entitled by notice to comply with Section 424(a) require the Purchaser to purchase for cash up to 50 percent of each of that holder's Company Options at a price equal to the product of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance applicable Option Spread multiplied by the number of shares of Surviving Corporation Common Stock that will become Shares subject to Exchange such Company Options, with the balance of such Company Options being converted in accordance with this paragraph. At or prior to the Closing Date, the Company and the Purchaser shall make all necessary arrangements with respect to their stock option plans to permit the assumption of the unexercised Company Options by Purchaser pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise Section. For purposes of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Timethis Section, the Board term "Conversion Ratio" means a fraction, the numerator of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with which is the interpretive guidance average of the U.S. Securities high and Exchange Commission (low sales price of one Share on NASDAQ and on the "SEC") three trading days immediately preceding the Closing Date and any other applicable securities regulatory authorities so that the disposition denominator of which is the average of the Options high and low sales price of one Purchaser Share on NASDAQ on the acquisition of trading day immediately preceding the Exchange Options, any shares of Surviving Corporation Common Stock Closing Date. If a holder fails to make a timely election for option (i) or any other equity securities or derivative securities of the Surviving Corporation (ii) pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder paragraph (the "Exchange Act"a), such holder shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect deemed to Xxxxxx Common Stock have elected option (i) and other incentive compensation awards to receive equal parts cash and Purchaser Shares under option (including awards under the LTAP (as defined in the Stock Purchase Agreementi)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stock.

Treatment of Options. Prior Immediately prior to the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised optionoption to purchase shares of Company Common Stock under any Stock Plan (each, whether or not a “Company Stock Option”) shall, to the extent unvested, become fully vested or exercisableand exercisable effective immediately prior to the Effective Time; provided that, under stock option plans any such Company Stock Option that vests based on the achievement of Xxxxxx performance goals shall become fully vested and exercisable with respect to Xxxxxx Common Stock (each, an "Option") to be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms 100% of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that total number of shares of Surviving Corporation Company Common Stock equal subject to such Company Stock Option: provided further that any unexpired and unexercised Company Stock Option that is an “incentive stock option” within the number meaning of shares of Xxxxxx Common Stock issuable immediately prior to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective Time; provided, however, that in the case of any Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code, shall, to the conversion formula extent unvested, become fully vested and exercisable effective no later than five Business Days prior to the Effective Time. At the Effective Time, by virtue of the Merger and without any further action on the part of the holders thereof or the parties hereto, each Company Stock Option shall be adjustedcancelled and, if necessaryin exchange therefor, each former holder of any such cancelled Company Stock Option shall be entitled to comply with Section 424(areceive, in consideration of the cancellation of such Company Stock Option and in settlement therefor, a payment in cash (subject to any applicable withholding or other Taxes required by applicable Law) of an amount equal to the Code. In connection with product of (i) the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the total number of shares of Surviving Corporation Company Common Stock that will become subject to Exchange Options pursuant such Company Stock Option immediately prior to this Section 1.9 such cancellation and (bii) from and after the excess, if any, of the Merger Effective Time, upon Consideration over the exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, price per share subject to such Company Stock Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the terms and conditions applicable thereto“Option Payments”). Prior No Company Stock Option that, as of immediately prior to such cancellation, has an exercise price per share that is equal to or greater than the Merger Effective Time, Consideration shall entitle the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and holder thereof to any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units payment with respect to Xxxxxx Common such cancelled Company Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Option. The Surviving Corporation Common Stockshall instruct its payroll provider to make the Option Payments no later than two Business Days after the Closing by a payroll payment and subject to withholding, if any, as described in Section 4.8, to each holder of Employee Company Stock Options.

Treatment of Options. Prior (a) At the Effective Time of the Merger, each outstanding option to the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx purchase Company Common Stock (each, an a "Company Stock Option") issued pursuant to the Company's Non-Employee Directors' Stock Option Plan (the "Director Plan") or the Company's Stock Option and Restricted Stock Purchase Plan (the "Option Plan" and, collectively with the Director Plan, the "Company Stock Plans"), whether vested or unvested, shall be automatically converted at the Merger Effective Time into deemed to constitute an option (an "Exchange Option") to purchaseacquire, on the same terms and conditions as were applicable under such Company Stock Option, those shares of Parent Common Stock and CVPs which the holder of such Company Stock Option would have been entitled to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights receive pursuant to the terms of the stock Merger if such holder had exercised such option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Stock equal to the number of shares of Xxxxxx Common Stock issuable full immediately prior to the Merger Effective Time upon exercise of the Option and Merger (ii) utilizing the Exchange Ratio as set forth in Section 2.01 of this Agreement), at a price per share equal to (y) the aggregate exercise price which existed under for the corresponding shares of Company Common Stock purchasable pursuant to such Company Stock Option immediately prior divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to the Merger Effective Timesuch Company Stock Option (a "Converted Option"); provided, however, that in the case of any Option option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the CodeCode ("incentive stock options"), the conversion formula option price, the number of shares of Parent Common Stock purchasable pursuant to such option and the terms and conditions of exercise of such option shall be adjusted, if necessary, determined in order to comply with Section 424(a) of the Code. In connection with If the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common relevant Company Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject Option is not exercised prior to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP Maturity Date (as defined in Exhibit A), any CVPs due pursuant thereto shall terminate and become null and void. If the relevant Company Stock Purchase AgreementOption is exercised, in whole or in part prior to the Maturity Date (as defined in Exhibit A)) payable in, or determined by reference to, upon the sale of any shares of Xxxxxx Parent Common Stock will be converted into an equal number received upon the exercise of restricted stock units the relevant Company Stock Option, the CVPs due pursuant to such shares sold shall terminate and become null and void. (or incentive compensation awardsb) As soon as practicable after the Effective Time of the Merger, Parent shall deliver to the holders of Company Stock Options appropriate notices setting forth such holders' rights pursuant to the Company Stock Plans and the agreements evidencing the grants of such Company Stock Options shall continue in effect on the same terms and conditions (subject to adjustments required by this Section 2.03 after giving effect to the Merger and the provisions set forth above and until otherwise determined). If necessary, Parent shall comply with respect to Surviving Corporation Common Stock.the terms of

Treatment of Options. Prior (a) Subject to Section 2.4(b), the Merger Effective Time, Xxxxxx and Merger Sub Company shall take all such actions as may be action necessary so that each option to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans purchase shares of Xxxxxx with respect to Xxxxxx Common Stock (each, an a "Company Stock Option") (and any rights thereunder) outstanding immediately prior to be automatically converted at the Merger Effective Time into an option (an "Exchange Option") shall be canceled immediately prior to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except in exchange for any changes the right to receive an amount in vesting rights or acceleration of exercise rights pursuant cash equal to the terms product of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Stock equal to the number of shares of Xxxxxx Common Stock issuable immediately prior subject to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding such Company Stock Option immediately prior to the Merger Effective Time; providedTime and (ii) the excess, howeverif any, that in the case of any Option to which Section 421 of the Code applies by reason Cash Election Price over the per share exercise price of its qualification under Section 422 of the Code, the conversion formula shall be adjusted, if necessarysuch Company Stock Option, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange Options, be delivered by the Surviving Corporation immediately following the Effective Time. All applicable withholding taxes attributable to the payments made hereunder or to distributions contemplated hereby shall be deducted from the amounts payable under this Section 2.4 and all such taxes attributable to the exercise of Company Stock Options shall be withheld from the proceeds received in respect of the shares of Common Stock issuable upon such exercise. Notwithstanding the foregoing, any Company Stock Option with an exercise price greater than the Cash Election Price immediately prior to the Effective Time shall be cancelled immediately prior to the Effective Time, without any payment being made therefor. The Company shall use its reasonable best efforts to obtain the consent of each holder of Options to the foregoing treatment of such Options to the extent required under the option plan of the Company pursuant to which such Options were granted. (ab) reserve Notwithstanding the provisions of Section 2.4(a), and subject to agreeing with MergerCo upon a mutually satisfactory tax-free "rollover" mechanism, each person listed on Exhibit C who, on or prior to the Election Date, is the holder of a Company Stock Option will be entitled, with respect to all or any portion of such holder's Company Stock Option, to make an unconditional election to the Company in writing (a "Retention Election") on or prior to the Election Date, to retain such portion of their Company Stock Options as may be specified in such Retention Election in lieu of receiving a cash payment, if any, in consideration for issuance the cancellation of such portion of their Company Stock Options in the manner described in Section 2.4(a). Any portion of a Company Stock Option with respect to which a timely Retention Election has been delivered to the Company (the "Elected Portion") shall, whether or not then vested or exercisable, effective as of the Effective Time, become and represent an option (a "Continuing Option") for the number of shares of Surviving Corporation Common Stock that will become Shares subject to Exchange Options pursuant the Elected Portion of such Company Stock Option immediately prior to this Section 1.9 the Effective Time at an exercise price per share and (b) from on such terms and after conditions as may be mutually agreed upon with MergerCo. After the Merger Effective Time, upon exercise each Continuing Option shall as of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms Effective Time be immediately fully vested and conditions applicable thereto. exercisable. (c) Prior to the Merger Effective Time, the Board Company shall have taken all actions necessary or appropriate in the judgment of Directors of XxxxxxMergerCo to ensure that all stock option, stock appreciation right or an appropriate committee of nonother equity-employee directors thereofbased plans maintained with respect to the Shares, as applicableincluding the Jostens, Inc. 1992 Stock Incentive Plan, shall adopt resolutions consistent with the interpretive guidance terminate as of the U.S. Securities Effective Time and Exchange Commission (the "SEC") and provisions in any other applicable securities regulatory authorities so that compensation or benefit plan providing for the disposition issuance, transfer or grant of any capital stock of the Options and the acquisition Company or any interest in respect of any capital stock of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities Company shall be terminated as of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amendedEffective Time, and the rules Company shall use its reasonable best efforts to ensure that following the Effective Time neither the Company nor any of its subsidiaries is or will be bound by any Options (other than Continuing Options) which would entitle any person, other than MergerCo or its affiliates, to beneficially own, or receive any payments (other than as otherwise contemplated by Section 2.1 and regulations promulgated thereunder (the "Exchange Act")this Section 2.4) in respect of, shall be exempt for purposes of Section 16 any capital stock of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under Company or the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common StockCorporation.

Treatment of Options. Prior to (a) Effective as of the Merger Effective Time, Xxxxxx and Merger Sub Parent shall take all such actions as may be necessary assume each Option that is outstanding immediately prior to cause each unexpired and unexercised optionthe Effective Time, whether or not then vested or exercisable, under stock and such Options, as adjusted pursuant to this Section 3.2, shall be obligations of Parent following the Effective Time. Effective as of the Effective Time, each such Option shall be automatically canceled and retired and cease to represent a right to acquire Company Common Stock and, upon execution and delivery of the Option Cancellation Agreements by the respective Optionholders, shall be converted automatically into an option plans to purchase shares of Xxxxxx with respect to Xxxxxx Parent Common Stock (each, an "“Parent Option") to be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase”), on substantially the same terms and conditions (including vesting schedule except to the extent that such vesting schedule is accelerated or otherwise affected as were applicable a result of consummation of the Merger) as applied to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant prior to the terms of the stock Effective Time, as set forth in individual option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions(“Parent Option Agreements”), except that (ia) that number of shares of Surviving Corporation Common Stock equal to the number of shares of Xxxxxx Parent Common Stock issuable immediately prior subject to the Merger Effective Time upon exercise of the each assumed Option and (ii) at a price per share equal to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective Time; provided, however, that in the case of any Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code, the conversion formula shall be adjusted, if necessary, to comply with Section 424(adetermined by multiplying (i) of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Company Common Stock that will become subject to Exchange Options such Option by (ii) the product of (A) the number of Merger Shares and (B) the Per Share Portion (such product pursuant to this Section 1.9 clause (ii) referred to herein as the “Exchange Ratio”), and rounding the product pursuant to clauses (i) and (ii) down to the nearest whole share, and (b) from and after the Merger Effective Time, per share exercise price for the Parent Common Stock issuable upon exercise of Exchange Options, make available each assumed Option shall be determined by dividing (i) the per share exercise price for issuance all the shares of Surviving Corporation Company Common Stock covered therebyotherwise purchasable pursuant to such Option by (ii) the Exchange Ratio, subject and rounding such quotient up to the terms and conditions applicable thereto. nearest whole cent. (b) Prior to the Merger Effective TimeClosing, the Board board of Directors directors of Xxxxxxthe Company (or, or an appropriate if appropriate, any committee of non-employee directors thereof, as applicable, thereof administering the Incentive Plan) shall adopt such resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any or take such other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant actions as may be required to effect this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stock3.2.

Treatment of Options. Prior to At the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx Common Stock (each, an "Option") to be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase, without any further action on the same terms and conditions as were applicable to each such Option immediately before part of the Merger Effective Time parties hereto: (except for any changes a) no Options shall be assumed by Xxxxxx, Parent or the Surviving Corporation, (b) all Options shall terminate in vesting rights or acceleration of exercise rights pursuant to accordance with the terms of the Stock Option Plan, (c) the Unvested Options shall not entitle the holder thereof to receive any consideration hereunder, and (d) notwithstanding anything to the contrary in the Stock Option Plan or in any stock option plans agreement, each Vested Option shall be deemed to have been exercised immediately prior to the Effective Time and related agreements in existence as of converted into the date of this Agreement, that result from the occurrence of the Transactions), right to receive (i) that number of shares of Surviving Corporation Common Stock an amount equal to the product of (A) the number of shares of Xxxxxx Common Stock previously issuable immediately prior to the Merger Effective Time upon exercise of the if such Vested Option and (ii) at a price per share equal to the exercise price which existed under the corresponding Option were exercised immediately prior to the Merger Effective Time; provided, howevermultiplied by (B) the excess of (1) the Closing Per Share Common Merger Consideration over (2) the exercise price per share of Common Stock previously issuable pursuant to such Vested Option (the “Option Consideration”), that payable (in accordance with Section 2.12) in cash to the case holder thereof, without interest thereon, (ii) an amount equal to the product of any Option (A) subject to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code7.4, the conversion formula shall be adjustedPer Share Future Payment Amount for each Future Payment, if necessaryany, to comply with Section 424(amultiplied by (B) of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject previously issuable immediately prior to Exchange Options pursuant the Effective Time if such Vested Option were exercised immediately prior to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise payable in cash to the holder thereof, without interest thereon, pursuant to Section 2.12, (iii) an amount equal to the product of Exchange Options(A) subject to Section 7.4, make available for issuance all the sum of (1) the Per Share Parent Final Balance Sheet Adjustment Payment Amount, if any, plus (2) the Per Share Holdback Payment Amount, if any, multiplied by (B) the number of shares of Surviving Corporation Common Stock covered thereby, subject previously issuable immediately prior to the terms and conditions applicable thereto. Prior Effective Time if such Vested Option were exercised immediately prior to the Merger Effective Time, payable in cash to the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors holder thereof, as applicablewithout interest thereon, shall adopt resolutions consistent with pursuant to Section 2.12, and (iv) an amount equal to the interpretive guidance product of (A) the U.S. Securities and Exchange Commission Per Share Tax Refund Amount for each Tax Refund, if any, multiplied by (B) the "SEC") and any other applicable securities regulatory authorities so that the disposition number of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of previously issuable immediately prior to the Surviving Corporation Effective Time if such Vested Option were exercised immediately prior to the Effective Time, payable in cash to the holder thereof, without interest thereon, pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of Section 6.1(e). The Company has taken such actions, including amending the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934Stock Option Plan and stock option agreements, as amended, and is required to facilitate the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stockforegoing.

Treatment of Options. Prior (a) At the Effective Time of the Merger, each outstanding option to the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx purchase Company Common Stock (each, an a "Company Stock Option") issued pursuant to the Company's 1989 Stock Plan, 1992 Non-Employee Director Stock Option Plan, 1992 Stock Plan and 1997 Non- Qualified Stock Plan (collectively, the "Company Stock Plans"), whether vested or unvested, shall be automatically converted at the Merger Effective Time into deemed to constitute an option (an "Exchange Option") to purchaseacquire, on the same terms and conditions as were applicable to under such Company Stock Option (each such Company Stock Option, other than certain Company Stock Options under the 1992 Non-Employee Director Stock Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans Plan, being fully vested and related agreements in existence exercisable as of the date of this Agreement, that result from the occurrence Effective Time of the TransactionsMerger, in accordance with its terms), (i) that the same number of shares of Surviving Corporation Parent Common Stock equal as the holder of such Company Stock Option would have been entitled to receive pursuant to the number of shares of Xxxxxx Common Stock issuable Merger had such holder exercised such option in full immediately prior to the Merger Effective Time upon exercise of the Option and (ii) Merger, at a price per share equal to (y) the aggregate exercise price which existed under for the corresponding shares of Company Common Stock otherwise purchasable pursuant to such Company Stock Option immediately prior divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to the Merger Effective Timesuch Company Stock Option; provided, however, that in the case of any Option option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the CodeCode ("incentive stock options"), the conversion formula option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be adjusted, if necessary, determined in order to comply with Section 424(a) of the Code. (b) As soon as practicable after the Effective Time of the Merger, Parent shall deliver to the holders of Company Stock Options appropriate notices setting forth such holders' rights pursuant to the Company Stock Plans and the agreements evidencing the grants of such Company Stock Options shall continue in effect on the same terms and conditions (subject to adjustments required by this Section 2.03 after giving effect to the Merger and the provisions set forth above and until otherwise determined). In connection If necessary, Parent shall comply with the issuance terms of Exchange Optionsthe Company Stock Plans and ensure, to the extent required by, and subject to the provisions of, the Surviving Corporation Company Stock Plans, that Company Stock Options that qualified as incentive stock options prior to the Effective Time of the Merger continue to qualify as incentive stock options after the Effective Time of the Merger. (c) Parent shall (a) take all corporate action necessary to reserve for issuance the a sufficient number of shares of Surviving Corporation Parent Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, for delivery upon exercise of Exchange Company Stock Options. As soon as practicable after the Effective Time of the Merger, make available for issuance all Parent shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor or other appropriate forms), or another appropriate form, with respect to the shares of Surviving Corporation Parent Common Stock covered thereby, subject to such options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such options remain outstanding. With respect to those individuals who subsequent to the Merger will be subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of reporting requirements under Section 16(b16(a) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder amended (the "Exchange Act"), where applicable, Parent shall be exempt for purposes of Section 16 of administer the Company Stock Plan in a manner that complies with Rule 16b-3 promulgated under the Exchange Act. Restricted stock units Act to the extent the Company Stock Plans complied with respect such rule prior to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common StockMerger.

Treatment of Options. Prior (a) At the Effective Time of the Merger, each outstanding option to the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx purchase Company Common Stock (each, an a "Company Stock Option") issued pursuant to the Company's Non-Employee Directors' Stock Option Plan (the "Directors' Plan") or the Company's Restated Stock Option and Restricted Stock Purchase Plan (the "Option Plan" and, collectively with the Directors' Plan, the "Company Stock Plans"), whether vested or unvested, shall be automatically converted at the Merger Effective Time into deemed to constitute an option (an "Exchange Option") to purchaseacquire, on the same terms and conditions as were applicable under such Company Stock Option, those shares which the holder of such Company Stock Option would have been entitled to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights receive pursuant to the terms of the stock Merger if such holder had exercised such option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Stock equal to the number of shares of Xxxxxx Common Stock issuable full immediately prior to the Merger Effective Time upon exercise of the Option and (ii) Merger, at a price per share equal to (y) the aggregate exercise price which existed under for the corresponding shares of Company Common Stock purchasable pursuant to such Company Stock Option immediately prior divided by (z) the number of full shares of Merger Stock deemed purchasable pursuant to the Merger Effective Timesuch Company Stock Option (a "Converted Option"); provided, however, that in the case of any Option option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the CodeCode ("incentive stock options"), the conversion formula option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be adjusted, if necessary, determined in order to comply with Section 424(a) of the Code, provided further that if the Closing Date occurs prior to the Distribution Record Date each Converted Option shall be adjusted or substituted, as the case may be, pursuant to the Parent Transaction. (b) As soon as practicable after the Effective Time of the Merger, Parent shall deliver to the holders of Company Stock Options appropriate notices setting forth such holders' rights pursuant to the Company Stock Plans and the agreements evidencing the grants of such Company Stock Options shall continue in effect on the same terms and conditions (subject to adjustments required by this Section 2.03 after giving effect to the Merger and the provisions set forth above and until otherwise determined). In connection If necessary, Parent shall comply with the issuance terms of Exchange Optionsthe Company Stock Plans and ensure, to the extent required by, and subject to the provisions of, the Surviving Corporation Company Stock Plans, that Company Stock Options that qualified as incentive stock options prior to the Effective Time of the Merger continue to qualify as incentive stock options after the Effective Time of the Merger. (c) Parent shall (a) take all corporate action necessary to reserve for issuance the a sufficient number of shares of Surviving Corporation Common Merger Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, for delivery upon exercise of Exchange Company Stock Options. As soon as practicable after the Effective Time of the Merger, make available for issuance all Parent shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor or other appropriate forms), or another appropriate form, with respect to the shares of Surviving Corporation Common Merger Stock covered thereby, subject to such options and shall use its 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. With respect to those individuals who subsequent to the Merger will be subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of reporting requirements under Section 16(b16(a) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder amended (the "Exchange Act"), where applicable, Parent shall be exempt for purposes of Section 16 of administer the Company Stock Plans in a manner that complies with Rule 16b-3 promulgated under the Exchange Act. Restricted stock units Act to the extent the Company Stock Plans complied with respect such rule prior to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common StockMerger.

Treatment of Options. Prior to the Merger Effective TimeClosing, Xxxxxx the Board of Directors of the Company (or, if appropriate, any committee thereof) shall have adopted appropriate resolutions and Merger Sub shall take taken all such other actions as may be necessary to cause provide that each unexpired and unexercised optionoutstanding stock option (each an “Option”) heretofore granted under the Company’s Stock Incentive Plan (the “Company Stock Plan”), whether or not currently vested or exercisableexercisable at the Effective Time, under stock option plans and which remains outstanding immediately prior to the Effective Time, shall be cancelled, no longer be outstanding and cease to represent the right to acquire Shares and in consideration for such cancellation, each holder of Xxxxxx with an Option shall, at the Effective Time, have the right to receive an amount in cash from Parent in respect thereof equal to Xxxxxx Common Stock (eachA) in the case of Exercisable Options (i) the product of (x) the total number of Shares subject or related to such Option, an "Option"and (y) the excess, if any, of the Closing Per Share Amount over the exercise price or purchase price, as the case may be, for each Share subject or related to such Option (subject to any applicable withholding taxes, the “Cash Option Payment”), (ii) the Final Adjustment Per Share Amount, if any, to be automatically converted at paid to such Person pursuant to Section 3.3, and (iii) their portion of the Merger Effective Time into an option (an "Exchange Option") to purchaseEscrow Fund, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights if any, pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Escrow Agreement, that result from (B) in the occurrence case of the Transactions), Additional Exercisable Options (i) that the product of (x) the total number of shares Shares subject or related to such Option, and (y) the excess, if any, of Surviving Corporation Common Stock equal the Final Per Share Amount over the exercise price or purchase price, as the case may be, for each Share subject to or related to such Option (subject to any applicable withholding taxes, the “Additional Option Payment”), and (ii) their portion of the Escrow Fund, if any, pursuant to the number terms of shares of Xxxxxx Common Stock issuable the Escrow Agreement, in each case as if such Option had been exercised and converted into Shares immediately prior to the Merger Effective Time upon exercise of the Option and (iiC) at a price per share equal to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective Time; provided, however, that in the case of Options that are not Exerciseable Options or Additional Exerciseable Options, no amount shall be payable. The Shares and any Option to which Section 421 Company Plan (or other plan, program or arrangement) providing for the issuance or grant of any other interest in respect of the Code applies by reason of its qualification under Section 422 capital stock of the CodeCompany shall terminate upon the Effective Time. The Company has taken all steps necessary to ensure that the Company is not or will not be bound by any Options, other options, warrants, rights or agreements which would entitle any person, other than the conversion formula shall be adjusted, if necessarycurrent stockholders of Merger Sub or its Affiliates, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and acquire any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities capital stock of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common StockCorporation.

Treatment of Options. (a) Prior to the Merger Effective Time, Xxxxxx the Board of Directors of the Company and Merger Sub the Board of Directors of Parent shall adopt appropriate resolutions and take all such other actions as may be necessary to cause each unexpired and unexercised provide that, effective as of the Effective Time, all the outstanding stock options (the "Company Stock Options") heretofore granted under any stock option, whether performance incentive or not vested or exercisablesimilar plan of the Company and its Subsidiaries (the "Stock Plans") shall be assumed by Parent and converted automatically into options (collectively, "Parent Stock Options") to purchase shares of Parent Common Stock in an amount and at an exercise price determined as provided below: (i) The number of shares of Parent Common Stock to be subject to a Parent Stock Option shall be equal to the product of (A) the number of shares of Company Common Stock subject (immediately prior to the Effective Time) to the related Company Stock Option, multiplied by (B) the Option Exchange Ratio, provided that any fractional share 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 stock option plans a Parent Stock Option shall be equal to the quotient of Xxxxxx (C) the exercise price per share of the Company Common Stock under the related Company Stock Options, divided by (D) the Option Exchange Ratio, provided that such exercise price shall be rounded down to the nearest cent (except that with respect to Xxxxxx Common Stock any "incentive stock options" (each, an as defined in Section 422 of the Code) such exercise price shall be rounded up to the nearest cent). The adjustment provided herein with respect to any options which are "Option"incentive stock options" (as defined in Section 422 of the Code) shall be and is intended to be automatically converted at effected in a manner which is consistent with Section 424(a) of the Merger Code. After the Effective Time into an option (an "Exchange Option") to purchaseTime, on each Parent Stock Option shall be exercisable and shall vest upon the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Company Stock equal to the number of shares of Xxxxxx Common Stock issuable immediately prior to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective Time; provided, however, that . (b) Following the Effective Time no holder of a Company Stock Option or any participant in the case of any Option Stock Plan shall have any right thereunder to which Section 421 acquire capital stock of the Code applies by reason of its qualification under Section 422 Company, Sub, or the Surviving Corporation. As of the CodeEffective Time, none of Sub, the conversion formula shall be adjusted, if necessary, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange OptionsCompany, the Surviving Corporation or any of their respective Subsidiaries is or will be bound by any Company Stock Options, other options, warrants, rights or agreements which would entitle any Person, other than Sub or its Affiliates, to own any capital stock of the Company, Sub, the Surviving Corporation or any of their respective Subsidiaries or to receive any payment in respect thereof, except as otherwise provided herein. (c) Parent agrees that it shall (a) take all action necessary, on or prior to the Effective Time, to authorize and reserve for issuance the a number of shares of Surviving Corporation Parent Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, sufficient for issuance upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Parent Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, Options as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to contemplated by this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stock1.7.

Treatment of Options. Prior (a) Buyer has agreed to issue shares of CyberGuard Common Stock and cash to the Merger Effective Time, Xxxxxx and Merger Sub shall take all employees of the Company (“Option Consideration”) listed on Schedule 1.9(a) in respect of certain unissued options to acquire shares of Company capital stock (the “Options”) held by such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx Common Stock employees (each, an "Option") “Optionee” and, collectively, the “Optionees”). The number of shares of CyberGuard Common Stock to be automatically converted issued to each Optionee and the cash to be delivered to each Optionee is set forth on Schedule 1.9(a). It is the intention of the parties that all rights relating to the Options shall be cancelled at the Merger Effective Time into an option time of the Closing in exchange for the consideration set forth in this Section 1.9(a). (an "Exchange Option"b) to purchase, on Each of the same terms Optionees shall execute a Waiver and conditions Declaration of Consent in substantially the form attached as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights Exhibit B at or acceleration of exercise rights pursuant prior to the terms of the stock option plans and related agreements in existence as of the date of this AgreementClosing, that result from the occurrence of the Transactions), acknowledging (i) that number of shares of Surviving Corporation Common Stock equal to the number of shares listed opposite such person’s name on Schedule 1.9(a) represents all of Xxxxxx Common Stock issuable immediately prior such Optionee’s equity interests in the Company (other than any Shares owned by such Optionee) and that the Company is not obligated to issue such Optionee any shares or equity interests other than as listed on Schedule 1.9(a), (ii) that in consideration of the Merger Effective Time upon exercise receipt of the Option Consideration, the Optionee agrees to the cancellation of such putative equity right, and (iiiii) at a price per share equal to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective Time; provided, however, that in the case of any Option to which Section 421 upon receipt of the Code applies by reason of its qualification under Section 422 of Option Consideration the CodeOptionee shall release the Company, the conversion formula shall be adjusted, if necessary, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 Buyer and (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units their respective Affiliates with respect to Xxxxxx Common Stock any further liability or obligation in connection with such putative equity right. (c) Upon execution of a Waiver and other incentive compensation awards (including awards under Declaration of Consent by each Optionee, at Closing Buyer shall deliver to each Optionee the LTAP (Option Consideration as defined set forth on Schedule 1.9(a) hereto. Certificates representing the stock portion of the Option Consideration to be delivered to each Optionee shall be delivered to such Optionee by the Buyer’s transfer agent, in the Stock Purchase Agreementname (and, if applicable, to the account) designated by such Optionee and set forth on Schedule 1.9(b)) payable in, or determined by reference to, shares as soon as reasonably practicable following Closing. Buyer shall give its transfer agent irrevocable transfer instructions regarding the foregoing at the time of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common StockClosing.

Treatment of Options. Prior (a) At the Closing Date, each option (each, a "Company Stock Option") to purchase Shares granted under any employee, consultant, representative or director stock option, stock purchase or equity compensation plan, arrangement or agreement of the Company or any of its Subsidiaries (collectively, the "Company Equity Plans") that is exercisable and outstanding immediately prior to the Closing Date, taking into account any acceleration of exercisability that occurs, pursuant to the applicable award agreement, as a result of the transactions contemplated by this Agreement, shall be canceled and, in exchange therefor (and in full satisfaction thereof), the Surviving Corporation shall pay, to each Person who, at the time of such cancellation, was holding any such canceled Company Stock Option as soon as practicable following the Closing Date an amount in cash (without interest, and subject to deduction for any required withholding Taxes where applicable under any provision of any tax Laws and regulations) equal to the product of (i) the excess (if any) of the Merger Effective TimeConsideration over the exercise price per Share under such Company Stock Option and (ii) the number of Shares subject to such Company Stock Option; provided, Xxxxxx that if the exercise price per Share under any such Company Stock Option is equal to or greater than the Merger Consideration, then such Company Stock Option shall be canceled without any cash payment being made in respect thereof. (b) At the Closing Date, each Company Stock Option that is outstanding and Merger Sub shall take all such actions unexercisable immediately prior to the Closing Date, taking into account any acceleration of exercisability that occurs, pursuant to the applicable award agreement, as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans a result of Xxxxxx with respect to Xxxxxx Common Stock the transactions contemplated by this Agreement (each, an "Outstanding Unexercisable Company Option") to ), shall be automatically converted at the Merger Effective Time into and become an option to purchase Parent common stock, with such conversion effected through Parent: (an "Exchange i) assuming such Outstanding Unexercisable Company Option"; or (ii) replacing such Outstanding Unexercisable Company Option by issuing a reasonably equivalent replacement stock option to purchasepurchase Parent common stock in substitution therefor, on in either case in accordance with the same terms (as amended in accordance with the terms of this Agreement) of the applicable Company Equity Plan and conditions as were applicable the terms of the stock option agreement by which such Outstanding Unexercisable Company Option is evidenced. All rights with respect to Shares under Outstanding Unexercisable Company Options assumed or replaced by Parent shall thereupon be converted into options with respect to Parent common stock. Accordingly, from and after the Closing Date: (A) each Outstanding Unexercisable Company Option assumed or replaced by Parent may be exercised solely for shares of Parent common stock; (B) the number of shares of Parent common stock subject to each Outstanding Unexercisable Company Option assumed or replaced by Parent shall be determined by multiplying the number of Shares that were subject to such Outstanding Unexercisable Company Option immediately before prior to the Merger Effective Time Closing Date by the Conversion Ratio (except as defined below), and rounding the resulting number down to the nearest whole number of shares of Parent common stock; (C) the per share exercise price for any changes the Parent common stock issuable upon exercise of each Outstanding Unexercisable Company Option assumed or replaced by Parent shall be determined by dividing the per share exercise price of the Shares subject to such Outstanding Unexercisable Company Option, as in vesting rights or acceleration of effect immediately prior to the Closing Date Time, by the Conversion Ratio, and rounding the resulting exercise rights pursuant price up to the nearest whole cent; and (D) subject to the terms of the stock option plans agreement by which such Outstanding Unexercisable Company Option is evidenced, any restriction on the exercise of any Outstanding Unexercisable Company Option assumed or replaced by Parent shall continue in full force and related agreements effect and the term, exercisability, vesting schedule and other provisions of such Outstanding Unexercisable Company Option shall, subject to the actions described in existence Section 7.13, otherwise remain unchanged as a result of the date assumption or replacement of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Stock equal to the number of shares of Xxxxxx Common Stock issuable immediately prior to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective Timesuch Outstanding Unexercisable Company Option; provided, however, that in (I) the case board of any Option directors of Parent or a committee thereof shall succeed to which Section 421 the authority and responsibility of the Code applies Company Board or any committee thereof with respect to each Outstanding Unexercisable Company Option assumed or replaced by Parent and (II) Parent may modify certain of the provisions in such Outstanding Unexercisable Company Options to conform to the practices under Parent's equity compensation plans. The "Conversion Ratio" shall be equal to the fraction having a numerator equal to the US Dollar equivalent of the Merger Consideration determined as of the Closing Date, which represents the fair market value of a Share as of the Closing Date, and having a denominator equal to the average of the closing sale prices of a share of Parent common stock as reported on the NASDAQ Global Select Market for each of the ten consecutive trading days immediately preceding the Closing Date (the "Average Parent Stock Price"); provided, however, that if, between the date of this Agreement and the Closing Date, the outstanding Shares or Parent common stock are changed into a different number or class of shares by reason of its qualification under Section 422 any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, then the Conversion Ratio shall be adjusted equitably and proportionately to the extent appropriate to preserve the intended consequences of the Code, the conversion formula shall be adjusted, if necessary, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stockadjustment.

Treatment of Options. Prior (a) At the Effective Time of the Merger, each outstanding option to the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx purchase Company Common Stock (each, an a "Company ------- Stock Option") issued pursuant to the Company's 1989 Stock Plan, 1992 Non- ------------ Employee Director Stock Option Plan, 1992 Stock Plan and 1997 Non-Qualified Stock Plan (collectively, the "Company Stock Plans"), whether vested or ------------------- unvested, shall be automatically converted at the Merger Effective Time into deemed to constitute an option (an "Exchange Option") to purchaseacquire, on the same terms and conditions as were applicable to under such Company Stock Option (each such Company Stock Option, other than certain Company Stock Options under the 1992 Non-Employee Director Stock Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans Plan, being fully vested and related agreements in existence exercisable as of the date of this Agreement, that result from the occurrence Effective Time of the TransactionsMerger, in accordance with its terms), (i) that the same number of shares of Surviving Corporation Parent Common Stock equal as the holder of such Company Stock Option would have been entitled to receive pursuant to the number of shares of Xxxxxx Common Stock issuable Merger had such holder exercised such option in full immediately prior to the Merger Effective Time upon exercise of the Option and (ii) Merger, at a price per share equal to (y) the aggregate exercise price which existed under for the corresponding shares of Company Common Stock otherwise purchasable pursuant to such Company Stock Option immediately prior divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to the Merger Effective Timesuch Company Stock Option; provided, however, that in the case of any Option option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the CodeCode ("incentive stock options"), the conversion formula option price, the ----------------------- number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be adjusted, if necessary, determined in order to comply with Section 424(a) of the Code. (b) As soon as practicable after the Effective Time of the Merger, Parent shall deliver to the holders of Company Stock Options appropriate notices setting forth such holders' rights pursuant to the Company Stock Plans and the agreements evidencing the grants of such Company Stock Options shall continue in effect on the same terms and conditions (subject to adjustments required by this Section 2.03 after giving effect to the Merger and the provisions set forth above and until otherwise determined). In connection If necessary, Parent shall comply with the issuance terms of Exchange Optionsthe Company Stock Plans and ensure, to the extent required by, and subject to the provisions of, the Surviving Corporation Company Stock Plans, that Company Stock Options that qualified as incentive stock options prior to the Effective Time of the Merger continue to qualify as incentive stock options after the Effective Time of the Merger. (c) Parent shall (a) take all corporate action necessary to reserve for issuance the a sufficient number of shares of Surviving Corporation Parent Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, for delivery upon exercise of Exchange Company Stock Options. As soon as practicable after the Effective Time of the Merger, make available for issuance all Parent shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor or other appropriate forms), or another appropriate form, with respect to the shares of Surviving Corporation Parent Common Stock covered thereby, subject to such options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such options remain outstanding. With respect to those individuals who subsequent to the Merger will be subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of reporting requirements under Section 16(b16(a) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder amended (the "Exchange Act"), where applicable, Parent shall be exempt for purposes of Section 16 of administer the ------------ Company Stock Plan in a manner that complies with Rule 16b-3 promulgated under the Exchange Act. Restricted stock units Act to the extent the Company Stock Plans complied with respect such rule prior to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common StockMerger.

Treatment of Options. Prior (a) At the Effective Time of the Merger, each outstanding option to the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx purchase Company Common Stock (each, an a "Company Stock Option") issued pursuant to the Company's Non-Employee Directors' Stock Option Plan (the "Director Plan") or the Company's Stock Option and Restricted Stock Purchase Plan (the "Option Plan" and, collectively with the Director Plan, the "Company Stock Plans"), whether vested or unvested, shall be automatically converted at the Merger Effective Time into deemed to constitute an option (an "Exchange Option") to purchaseacquire, on the same terms and conditions as were applicable under such Company Stock Option, those shares of Parent Common Stock and CVPs which the holder of such Company Stock Option would have been entitled to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights receive pursuant to the terms of the stock Merger if such holder had exercised such option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Stock equal to the number of shares of Xxxxxx Common Stock issuable full immediately prior to the Merger Effective Time upon exercise of the Option and Merger (ii) utilizing the Exchange Ratio as set forth in Section 2.01 of this Agreement), at a price per share equal to (y) the aggregate exercise price which existed under for the corresponding shares of Company Common Stock purchasable pursuant to such Company Stock Option immediately prior divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to the Merger Effective Timesuch Company Stock Option (a "Converted Option"); provided, however, that in the case of any Option option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the CodeCode ("incentive stock options"), the conversion formula option price, the number of shares of Parent Common Stock purchasable pursuant to such option and the terms and conditions of exercise of such option shall be adjusted, if necessary, determined in order to comply with Section 424(a) of the Code. In connection If the relevant Company Stock Option is not exercised prior to the Maturity Date (as defined in Exhibit A), any CVPs due pursuant thereto shall terminate and become null and void. If the relevant Company Stock Option is exercised, in whole or in part prior to the Maturity Date (as defined in Exhibit A), upon the sale of any shares of Parent Common Stock received upon the exercise of the relevant Company Stock Option, the CVPs due pursuant to such shares sold shall terminate and become null and void. (b) As soon as practicable after the Effective Time of the Merger, Parent shall deliver to the holders of Company Stock Options appropriate notices setting forth such holders' rights pursuant to the Company Stock Plans and the agreements evidencing the grants of such Company Stock Options shall continue in effect on the same terms and conditions (subject to adjustments required by this Section 2.03 after giving effect to the Merger and the provisions set forth above and until otherwise determined). If necessary, Parent shall comply with the issuance terms of Exchange Optionsthe Company Stock Plans and ensure, to the extent required by, and subject to the provisions of, the Surviving Corporation Company Stock Plans, that Company Stock Options that qualified as incentive stock options prior to the Effective Time of the Merger continue to qualify as incentive stock options after the Effective Time of the Merger. (c) Parent shall (a) take all corporate action necessary to reserve for issuance the a sufficient number of shares of Surviving Corporation Parent Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, for delivery upon exercise of Exchange Company Stock Options. At the Effective Time of the Merger, make available for issuance all Parent shall file a registration statement on Form S-8, as the case may be (or any successor or other appropriate forms), or another appropriate form, with respect to the shares of Surviving Corporation Parent Common Stock covered thereby, and CVPs subject to such options and shall use its 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. With respect to those individuals who subsequent to the Merger will be subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of reporting requirements under Section 16(b16(a) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder amended (the "Exchange Act"), where applicable, Parent shall be exempt for purposes of Section 16 of administer the Company Stock Plans in a manner that complies with Rule 16b-3 promulgated under the Exchange Act. Restricted stock units Act to the extent the Company Stock Plans complied with respect such rule prior to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common StockMerger.

Treatment of Options. Prior (a) At the Effective Time of the Merger, each outstanding option to purchase Company Common Stock (a "Company Stock Option") granted under the Merger Effective TimeCompany's stock option plans, Xxxxxx director deferred compensation plan and Merger Sub shall take all such actions other agreements listed on Section 2.11(c) of the Company Disclosure Schedule (as may be necessary to cause each unexpired and unexercised optionhereinafter defined) (collectively, the "Company Stock Option Plans"), whether or not vested or then exercisable, under stock option plans of Xxxxxx with respect shall be deemed to Xxxxxx Common Stock (each, an "Option") to be automatically converted at the Merger Effective Time into constitute an option (an "Exchange Option") to purchaseacquire, on the same terms and conditions as were applicable to each under such Option immediately before Company Stock Option, the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that same number of shares of Surviving Corporation Parent Common Stock equal (a "Parent Stock Option") as the holder of such Company Stock Option would have been entitled to receive pursuant to the number of shares of Xxxxxx Common Stock issuable Merger had such holder exercised such option in full immediately prior to the Merger Effective Time upon exercise of the Option and (ii) Merger, at a price per share equal to (y) the aggregate exercise price which existed under for the corresponding shares of Company Common Stock otherwise purchasable pursuant to such Company Stock Option immediately prior divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to such Company Stock Option (rounded down to the Merger Effective Timenearest whole number of shares of Parent Common Stock); provided, however, that in the case of any Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the CodeISO (as defined below), the conversion formula option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be adjusted, if necessary, determined in order to comply with Section 424(a) of the Code. (b) As soon as practicable after the Effective Time of the Merger, Parent shall deliver to the holders of Company Stock Options appropriate notices setting forth such holders' rights pursuant to the Company Stock Plans and the agreements evidencing the grants of such Company Stock Options shall continue in effect on the same terms and conditions (subject to adjustments required by this Section 1.8 after giving effect to the Merger and the provisions set forth above). In connection Subject to the adjustments provided for in Section 1.8(a) and if necessary, Parent shall comply with the issuance terms of Exchange Optionsthe Company Stock Plans and ensure, to the extent required by, and subject to the provisions of, the Surviving Corporation Company Stock Plans, that Company Stock Options that qualified as incentive stock options prior to the Effective Time of the Merger continue to qualify as incentive stock options after the Effective Time of the Merger. (c) Parent shall (a) take all corporate action necessary to reserve for issuance the a sufficient number of shares of Surviving Corporation Parent Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, for delivery upon exercise of Exchange Company Stock Options. As soon as practicable after the Effective Time of the Merger, make available for issuance all Parent shall file a registration statement on Form S-8 (or any successor or other appropriate forms), or another appropriate form, with respect to the shares of Surviving Corporation Parent Common Stock covered thereby, subject to such options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such options remain outstanding. With respect to those individuals who subsequent to the Merger will be subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC"reporting requirements under Section 16(a) and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined below), where applicable, Parent shall administer the Company Stock Plans in a manner that complies with Rule 16b-3 promulgated under the Exchange Act to the extent the Company Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) Plans complied with respect such rule prior to Surviving Corporation Common Stockthe Merger.

Treatment of Options. Prior to (a) At the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions each outstanding option to purchase Shares (a “Company Option”) under the Stock Plans (as may be necessary to cause each unexpired and unexercised optiondefined in Section 4.1(b)), whether or not vested or exercisableunvested, under stock option plans of Xxxxxx with respect to Xxxxxx Common Stock (each, an "Option") to shall be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), into: (i) that a vested option (a “Parent Option”) to acquire a number of shares of Surviving Corporation Common Stock Stock, par value $0.0001 per share of Parent (“Parent Common Stock”) equal to the product (rounded to the nearest whole number) of (x) the number of shares of Xxxxxx Common Stock issuable immediately prior Shares subject to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding Company Option immediately prior to the Merger Effective TimeTime and (y) the Conversion Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per Share of such Company Option immediately prior to the Effective Time divided by (B) the Conversion Ratio; provided, however, that in the case of any Company Option to which Section 421 422 of the Code applies by reason of its qualification under Section 422 of the Codeapplies, the conversion formula exercise price and the number of shares of Parent Company Stock purchasable pursuant to such option shall be adjusteddetermined in accordance with the foregoing, if necessary, subject to comply with such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. In connection with ; and (ii) the issuance of Exchange Options, right to receive the Surviving Corporation shall (a) reserve for issuance Contingent Consideration multiplied by the number of shares Shares into which such Company Option was exercisable immediately prior to the Effective Time, provided that the Contingent Additional Per Share Merger Consideration shall be reduced on a pro rata basis by the amount of Surviving Corporation Common Stock that will become subject to Exchange Options pursuant to (x) any Final Closing Net Working Capital Shortfall (as defined below) plus (y) any indemnification or other claims paid or payable under this Section 1.9 Agreement in accordance with Article VII, and shall be increased on a pro rata basis by the amount of any Final Closing Net Working Capital Excess (as defined below). (b) from The foregoing Parent Options and after the right to receive the Contingent Consideration are referred to herein as the “Per Option Merger Consideration.” (c) Except as specifically provided above, following the Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject each Company Option shall continue to be governed by the same terms and conditions as were applicable thereto. Prior under such Company Option immediately prior to the Merger Effective Time, . “Conversion Ratio” means the Board Initial Per Share Merger Consideration (as decreased (on a per share basis) by the Expense Deduction (as forth on Exhibit 5.9 hereto) divided by the average closing price of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Parent Common Stock or any other equity securities or derivative securities of for the Surviving Corporation pursuant thirty (30) calendar days immediately prior to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common StockClosing Date.

Treatment of Options. Prior (a) Each of Parent and the Company shall take all necessary action to ensure that, as of the Merger Effective Time, Xxxxxx the Company Option Plan and Merger Sub shall take all such actions unvested Company Options (as may be necessary defined below) issued thereunder are assumed by Parent. Each option to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx Common Stock purchase Company Shares (each, an "a “Company Option"”) that is outstanding and unexercised pursuant to be automatically converted at the Merger Company Option Plan in effect on the date hereof and which is unvested immediately prior to the Effective Time into shall become and represent an option to purchase (a “Replacement Stock Option”) a number of shares of Parent common stock (the “Parent Shares”) equal to the number of Company Shares covered by such Company Option, divided by a ratio (the “Ratio”) equal to (i) the average closing price of the Parent’s common stock, based upon the closing price for each of the twenty (20) trading days up to and including the trading day ending two (2) days prior to the Closing Date divided by (ii) the Common Per Share Merger Consideration and with an "Exchange Option"exercise price per Parent Share equal to the exercise price for such Company Option multiplied by the Ratio. It is the intent of the Parties that (A) the Replacement Stock Options shall qualify following the Effective Time as “incentive stock options” as defined in Section 422 of the Code to purchasethe extent that the related Company Options qualified as incentive stock options immediately prior to the Effective Time, on and (B) each Replacement Stock Option will have an economic value equivalent to the Company Option it replaces, such that each Replacement Stock Option will not be subject to Section 409A of the Code, and (C) the provisions of this Section 3.5 shall be applied consistent with the foregoing intents. After the Effective Time, except as provided above in this Section 3.5, each Replacement Stock Option shall be exercisable upon the same terms and conditions as were applicable to each such under the related Company Option immediately before prior to the Merger Effective Time but only with accelerated vesting as a result of Termination After Change in Control (except for any changes as such term is defined in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of Company Option which such Replacement Stock Option replaces). The Company agrees that, after the date of this Agreement, that result from the occurrence it will not grant any stock appreciation rights or stock options and will not permit cash payments to holders of Company Options in lieu of the Transactions)substitution therefor of Replacement Stock Options, (i) that as described in this Section 3.5. Parent will reserve a sufficient number of shares Parent Shares for issuance under this Section 3.5. (b) Parent shall use its commercially reasonable efforts to file with the Securities and Exchange Commission no later than the Effective Time a registration statement on an appropriate form or a post-effective amendment to a previously filed registration statement under the Securities Act of Surviving Corporation Common 1933, as amended, with respect to Parent Shares subject to Replacement Stock equal Options issued pursuant to this Section 3.5, and shall use its commercially reasonable efforts to maintain the number current status of shares of Xxxxxx Common Stock issuable immediately the prospectus contained therein, as well as comply with any applicable state securities or “blue sky” laws, for so long as such options remain outstanding. (c) The Company shall take such actions as are necessary to ensure that, and shall obtain and deliver to Parent on or prior to the Closing an irrevocable written agreement, in form and substance reasonably acceptable to Parent (an “Option Cancellation Agreement”), from each Vested Option Holder providing that, as of the Effective Time, each Vested Company Option, by virtue of the Merger Effective Time and without any further action on the part of Parent or Merger Sub, the Company or the holder of such Vested Company Option, shall be converted automatically into the right to receive, in lieu of the Company Shares otherwise acquirable and receivable upon the exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding such Vested Company Option immediately prior to the Merger Effective Time; provided, howeveran aggregate amount in cash, that in without interest, equal to the case of any Vested Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the CodeMerger Consideration, the conversion formula shall be adjusted, if necessary, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 withholding Taxes payable in part at Closing and (b) in part from the Escrow Funds. From and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereofVested Company Options, as applicable, shall adopt resolutions consistent so converted in accordance with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"3.5(c), shall represent solely the right to receive the Vested Option Merger Consideration in accordance with Section 3.3 hereof, and shall not be exempt exercisable for purposes the purchase of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, Company Shares or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stockany Parent Shares.

Treatment of Options. Prior to the Merger Effective Time, Xxxxxx the -------------------- Board of Directors of the Company (and/or, if appropriate, the Special Committee) shall adopt appropriate resolutions and Merger Sub shall take all such other actions as may be necessary to cause provide that each unexpired and unexercised option, whether or not vested or exercisable, under outstanding stock option plans of Xxxxxx with respect to Xxxxxx Common Stock (each, an "Option") to be automatically converted ------ heretofore granted under the Company's 1997 Equity Incentive Plan, as amended (the "1997 Incentive Plan"), the Company's 1997 Non-Employee Directors' Stock ------------------- Option Plan, as amended (the "1997 Directors Plan"), the Company's 1992 Non- ------------------- Employees Directors' Stock Option Plan, as amended (the "1992 Directors Plan"), ------------------- and each of the Company's 1991 Incentive Stock Option Plan, as amended (the "1991 Option Plan"), and the Company's 1988 Stock Option Plan, as amended (the ---------------- "1988 Option Plan") (collectively, the ---------------- "Company Stock Option Plans"), whether or not then vested or exercisable, shall, -------------------------- at the Merger Effective Time into an option Time, be cancelled, and each holder thereof shall be entitled to receive a payment in cash as provided in Section 5.8 hereof, if any (an subject to any applicable withholding taxes, the "Exchange OptionCash Payment") to purchase), on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms it being understood ------------ that members of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Stock equal to the number of shares of Xxxxxx Common Stock issuable immediately Rollover Group may instead elect prior to the Merger Effective Time to receive securities of Newco upon exercise cancellation of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective Time; provided, however, that in the case of any Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code, the conversion formula shall be adjustedtheir Options or, if necessaryso agreed in writing by Newco, to comply with Section 424(a) retain their Options and/or exchange all or a portion of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve their Options for issuance the number of options to purchase shares of Surviving Corporation Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities capital stock of the Surviving Corporation pursuant to this Agreement Corporation, all as contemplated by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act Purchase Agreement. As provided herein, unless otherwise determined by Newco, the Company Stock Option Plans (and any feature of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and any other incentive compensation awards (including awards under the LTAP Benefit Plan (as defined in Section 2.11) or other plan, program or arrangement providing for the Stock issuance or grant of any other interest in respect of the capital stock of the Company) shall terminate as of the Effective Time. The Company shall take all steps necessary to ensure that, after the date hereof, the Company will not issue any Options or other options, warrants, rights or agreements which would entitle any person to acquire any capital stock of the Company or, except as otherwise provided in this Section 1.11 or in Section 5.8 (or in connection with the Securities Purchase Agreement)) payable in, to receive any payment in respect thereof and, except as otherwise provided above, to cause such Options to be cancelled or determined by reference to, shares cause the holders of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect the Options to Surviving Corporation Common Stockagree to such cancellation thereof as provided herein.

Treatment of Options. Prior to At the Merger Initial Effective Time, Xxxxxx each outstanding option to purchase shares of Common Stock (a “Company Option”) under the JackPocket, Inc. 2013 Equity Incentive Plan (as amended, the “Stock Plan”), whether vested or unvested (other than Company Performance Options that are Unvested Company Options, which shall be cancelled in accordance with Section 2.10(b)), shall, by virtue of the Initial Merger and Merger Sub without any further action on the part of the holders thereof or the Parties hereto, shall take all such actions be treated as may be necessary to cause each unexpired follows: (i) In-the-Money Options: Each Company Option that is outstanding and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect immediately prior to Xxxxxx Common Stock the Initial Effective Time that has a per share exercise price that is less than the Per Share Closing Consideration (each, an "“In-the-Money Option"”) shall cease to represent an option to purchase shares of Common Stock and shall be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that purchase a number of shares of Surviving Corporation Parent Common Stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Xxxxxx Common Stock issuable immediately prior subject to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding such In-the-Money Option immediately prior to the Merger Initial Effective TimeTime and (y) the Equity Award Conversion Amount, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of Common Stock of such In-the-Money Option immediately prior to the Initial Effective Time divided by (B) the Equity Award Conversion Amount; provided, however, that the exercise price and the number of shares of Parent Common Stock purchasable pursuant to the In-the-Money Options shall be determined in a manner consistent with the requirements of Section 409A of the Code; provided, further, that in the case of any In-the-Money Option to which Section 421 422 of the Code applies by reason of its qualification under Section 422 of the Codeapplies, the conversion formula exercise price and the number of shares of Parent Common Stock purchasable pursuant to such option shall be adjusteddetermined in accordance with the foregoing, if necessary, subject to comply with such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. In connection with ; provided, further, that except as specifically provided above, following the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Initial Effective Time, upon exercise of Exchange each In-the-Money Option (other than Company Performance Options that are Unvested Company Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject which shall be cancelled in accordance with Section 2.10(b)) shall continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable thereto. Prior to such In-the-Money Option immediately prior to the Merger Initial Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stock.

Treatment of Options. Prior to At the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary each outstanding option to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans purchase shares of Xxxxxx with respect to Xxxxxx Company Common Stock (eacha “Company Option”) under the Stock Plans of the Company, whether vested or unvested, shall, automatically and without any action on the part of the holder thereof, cease to represent an "Option") option to purchase shares of Company Common Stock and shall be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that purchase a number of shares of Surviving Corporation Parent Common Stock (a “Parent Option”) equal to the product (rounded down to the nearest whole number) of (i) the number of shares of Xxxxxx Company Common Stock issuable immediately prior subject to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding such Company Option immediately prior to the Merger Effective TimeTime and (ii) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of Company Common Stock of such Company Option immediately prior to the Effective Time divided by (B) the Exchange Ratio; provided, however, that the exercise price and the number of shares of Parent Common Stock purchasable pursuant to the Company Options shall be determined in a manner consistent with the requirements of Section 409A of the Code; and provided, further, that in the case of any Company Option to which Section 421 422 of the Code applies by reason of its qualification under Section 422 of the Codeapplies, the conversion formula exercise price and the number of shares of Parent Common Stock purchasable pursuant to such option shall be adjusteddetermined in accordance with the foregoing, if necessary, subject to comply with such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. In connection with , and, in the issuance case of Exchange Optionsa Company Option that is held by a person who is subject to section 7 of the ITA in respect of the Company Option, the Surviving Corporation exercise price of a Parent Option shall (a) reserve be further adjusted in such manner so as to meet the requirements necessary to qualify for issuance the number a tax-deferred exchange of shares of Surviving Corporation Common Stock that will become subject to Exchange Company Options pursuant to this Section 1.9 and (bsubsection 7(1.4) from and after of the Merger ITA. Except as specifically provided above, following the Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject each Company Option that has converted into a Parent Option shall continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable thereto. Prior to such Company Option immediately prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stock.

Treatment of Options. Prior to (i) At the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause the Company shall, if necessary, have amended each unexpired and unexercised option, whether or not vested or exercisable, under of the employee stock option plans set forth in Section 2.01(d) of Xxxxxx with respect the Company Disclosure Letter (the "Company Option Plans") to Xxxxxx provide that each of the options to purchase one share of Company Common Stock outstanding thereunder at the Effective Time (each, an "Employee Option") shall be made applicable to the purchase of a number of shares of Parent Common Stock as provided in this Section 2.01(d). Parent shall take such action as shall be automatically converted at necessary so that, as of the Merger Effective Time into Time, each holder of an option Employee Option (an "Exchange OptionOptionee") shall have such Optionee's Employee Options apply to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Parent Common Stock (adjusted to the nearest whole share) equal to the product of (i) the number of shares of Xxxxxx Company Common Stock issuable subject to such Optionee's Employee Options immediately prior to the Merger Effective Time upon exercise of the Option and (ii) at a the Exchange Ratio. The exercise price per share equal for each Optionee's Employee Options (adjusted to the nearest cent) assumed will equal the old exercise price which existed under per share of Company Common Stock divided by the corresponding Option immediately prior to the Merger Effective TimeExchange Ratio; provided, however, that in the case of any Employee Option to which Section 421 of the Code applies continues to apply by reason of its qualification under Section 422 of the CodeCode ("incentive stock options"), the conversion formula option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be adjusted, if necessary, determined in order to comply with Section 424(a) of the CodeCode and the regulations promulgated thereunder. In connection with Without limiting the issuance of Exchange Optionsforegoing, the Surviving Corporation duration and other terms of each assumed or replaced Employee Option immediately after the Effective Time (unless otherwise agreed in writing by the Optionee with respect to a particular Employee Option) shall be the same as the corresponding Employee Options that were in effect immediately before the Effective Time, except that (ax) as of the Closing Date, all Employee Options shall become vested and immediately exercisable and (y) references to the Company and Company Common Stock in the Company Option Plans (and the corresponding references in each option agreement documenting each such Employee Option) shall, as appropriate, be deemed to be references to Parent and Parent Common Stock; provided, however, that the exercise price with respect to each share of Parent Common Stock shall not be less than the par value of $.001 thereof. (ii) As soon as practicable after the Effective Time, Parent shall deliver to each Optionee appropriate notices setting forth such Optionee's rights with respect to his or her Employee Options as modified by this Section and the agreements between the Company and the Optionees evidencing the grants of such Employee Options shall continue in effect on the same terms and conditions. (iii) Parent shall take all corporate action necessary to reserve for issuance the a sufficient number of shares of Surviving Corporation Parent Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, for delivery upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to Employee Options as modified by this Section. As soon as practicable after the terms Effective Time (and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stock.any

Treatment of Options. Prior Immediately prior to the Merger Effective TimeClosing, Xxxxxx and Merger Sub the Sellers shall cause the Company to take all such actions as may be necessary to cause each unexpired so all Options then outstanding shall become fully vested and unexercised option, exercisable (whether or not vested currently exercisable) and, immediately prior to the Closing, each Option not theretofore exercised shall be cancelled without any future liability to the Buyer, the Company or exercisableany other Person after the Closing, under stock option plans of Xxxxxx with respect in exchange for the right to Xxxxxx Common Stock receive the payment described in the following sentence (eachsuch payments in the aggregate, an "Option") the “Aggregate Option Consideration”). The Company shall cause each Optionholder exercising any Options prior to the Closing to agree in writing to become a party to this Agreement as a Seller and to be automatically converted at bound by, and subject to, all of the Merger Effective Time into an option (an "Exchange Option") to purchasecovenants, on the same terms and conditions as were applicable of this Agreement that are binding upon the Sellers and the Annexes attached hereto shall be deemed to have been updated without any further action of the parties hereto to reflect that each such Optionholder has become a Seller. Subject to the other provisions of this Section 2.4, each holder of an Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights that is cancelled pursuant to this Section 2.4 shall, in respect of each such Option, be entitled to a cash payment in an amount equal to the terms product of (I) the stock option plans and related agreements in existence excess, if any, of (i) the quotient obtained by dividing (A) the Estimated Purchase Price plus the aggregate exercise price of all Options outstanding as of the date time of this Agreement, that result from cancellation by (B) the occurrence sum of the Transactions), (i) that total number of shares Shares outstanding as of Surviving Corporation Common Stock equal the Closing (after giving effect to the Option Cancellation) and the number of shares of Xxxxxx Common Stock issuable immediately prior subject to all Options outstanding at the Merger Effective Time upon exercise time of the Option and cancellation over (ii) at a price per share equal to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective Time; providedapplicable Exercise Price of each Option, however, that in the case of any Option to which Section 421 of the Code applies multiplied by reason of its qualification under Section 422 of the Code, the conversion formula shall be adjusted, if necessary, to comply with Section 424(a(II) of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that underlying such Options. The Company shall be entitled to, and the Buyer will become subject to Exchange Options cause the Company at the Closing to, deduct and withhold from the amounts otherwise payable pursuant to this Section 1.9 2.4 to any Optionholder such amounts (the “Withholding Amounts”) as the Company is required to deduct and (b) from and after withhold in connection with the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject the underlying Option or with respect to the terms making of such payment under the Code, or any provision of state, local or foreign tax law and conditions applicable thereto. Prior to properly remit such amount to the Merger Effective Timeappropriate Tax authority. To the extent that Withholding Amounts are so deducted and withheld by the Company, such Withholding Amounts shall be treated for all purposes of this Agreement and shall be included in the Aggregate Option Consideration as having been paid to the Optionholder in respect of which such deduction and withholding were made by the Company. To the extent permissible by applicable law, the Board of Directors of XxxxxxSellers and the Buyer shall treat, or an appropriate committee of non-employee directors thereofand cause their Affiliates to treat, as applicable, shall adopt resolutions consistent with the interpretive guidance U.S. federal and state income tax deductions resulting from the payment obligations of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition Company in cancellation of the Options described in this Section 2.4, the U.S. federal and state income tax deductions resulting from the accrual or payment of any Indebtedness, “change in control” and “stay bonus” or similar payments as deductible in the Pre-Closing Date Taxable Period, and, in the case of a Straddle Period, as allocable for the purposes of this Agreement to the Pre-Closing Date Taxable Period included in such Straddle Period, and shall not take any position inconsistent therewith. For the avoidance of doubt, the Sellers and the acquisition Buyer shall not treat, and shall cause their Affiliates not to treat, the “next day” rule of the Exchange Options, any shares of Surviving Corporation Common Stock Treasury Regulation Section 1.1502-76(b)(1)(ii)(B) or any other equity securities similar provision of state or derivative securities of local Tax Law as applying to the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of deductions described in the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amendedprevious sentence, and no elections that would result in the rules and regulations promulgated thereunder (the "Exchange Act"), ratable allocation of such deductions shall be exempt for purposes made under Treasury Regulation Section 1.1502-76(b)(2) or any similar provision of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, state or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stocklocal Tax Law.

Treatment of Options. Prior (a) At the Effective Time of the Merger, each outstanding option to the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx purchase Company Common Stock (each, an a "OptionCOMPANY STOCK OPTION") issued pursuant to the Company's 1991 Equity Incentive Plan, as amended, 1991 Directors' Plan, as amended, 1994 Director Restricted Plan, as amended, 1997 Non-Qualified Employee Stock Option Plan, as amended, 2001 Directors Stock Option Plan and Non-Statutory Stock Option Agreement by and between Xxxxxx X. Xxxxxxxxx and the Company dated April 24, 2000 (collectively, the "COMPANY STOCK PLANS"), whether vested or unvested, shall be automatically converted at the Merger Effective Time into deemed to constitute an option (an "Exchange Option") to purchaseacquire, on the same terms and conditions as were applicable to each under such Option immediately before Company Stock Option, the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that same number of shares of Surviving Corporation Parent Common Stock equal as the holder of such Company Stock Option would have been entitled to receive pursuant to the number of shares of Xxxxxx Common Stock issuable Merger had such holder exercised such option in full immediately prior to the Merger Effective Time upon exercise of the Option and (ii) Merger, at a price per share equal to (y) the aggregate exercise price which existed under for the corresponding shares of Company Common Stock otherwise purchasable pursuant to such Company Stock Option immediately prior divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to the Merger Effective Timesuch Company Stock Option; providedPROVIDED, howeverHOWEVER, that in the case of any Option option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the CodeCode ("INCENTIVE STOCK OPTIONS"), the conversion formula option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be adjusted, if necessary, determined in order to comply with Section 424(a) of the Code. (b) As soon as practicable after the Effective Time of the Merger, Parent shall deliver to the holders of Company Stock Options appropriate notices setting forth such holders' rights pursuant to the Company Stock Plans and the agreements evidencing the grants of such Company Stock Options shall continue in effect on the same terms and conditions (subject to adjustments required by this Section 2.03 after giving effect to the Merger and the provisions set forth above). In connection If necessary, Parent shall comply with the issuance terms of Exchange Optionsthe Company Stock Plans and ensure, to the extent required by, and subject to the provisions of, the Surviving Corporation Company Stock Plans, that Company Stock Options that qualified as incentive stock options prior to the Effective Time of the Merger continue to qualify as incentive stock options after the Effective Time of the Merger. (c) Parent shall (a) take all corporate action necessary to reserve for issuance the a sufficient number of shares of Surviving Corporation Parent Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, for delivery upon exercise of Exchange Company Stock Options. As soon as practicable after the Effective Time of the Merger, make available for issuance all Parent shall file a registration statement on Form S-8 (or any successor or other appropriate forms), or another appropriate form, with respect to the shares of Surviving Corporation Parent Common Stock covered thereby, subject to such options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such options remain outstanding. With respect to those individuals who subsequent to the Merger will be subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of reporting requirements under Section 16(b16(a) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder amended (the "Exchange ActEXCHANGE ACT"), where applicable, Parent shall be exempt for purposes of Section 16 of administer the Company Stock Plans in a manner that complies with Rule 16b-3 promulgated under the Exchange Act. Restricted stock units Act to the extent the Company Stock Plans complied with respect such rule prior to Xxxxxx Common Stock and other incentive compensation awards the Merger. (including awards under d) The Company shall terminate the LTAP (as defined in the Company Employee Stock Purchase Agreement)Plan (the "COMPANY ESPP") payable in, at or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect prior to Surviving Corporation Common Stockthe Closing Date.

Treatment of Options. Prior to (a) At the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary each compensatory option to cause each unexpired purchase shares of Company Common Stock that is then-outstanding and unexercised optionimmediately prior to the Effective Time, including each option granted under the 2016 Stock Plan (each, a “Company Common Stock Option”), whether or not vested or exercisable, under stock option plans will, by virtue of Xxxxxx with respect to Xxxxxx Common Stock the Mergers and without further action on the part of the holder thereof be assumed by Parent and converted into (each, an "Option"i) to be automatically converted at the Merger Effective Time into an a fully-vested option (an "Exchange “Assumed Option"”) to purchase, on the same terms and conditions as were applicable applied to each such Company Common Stock Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant prior to the terms of the stock option plans and related agreements in existence as of the date of this AgreementEffective Time, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Parent Common Stock equal to Stock, except that the number of shares of Xxxxxx Parent Common Stock, rounded down to the nearest whole number of shares, subject to such Assumed Option will equal the product of (A) the Closing Merger Consideration Per Share, divided by the Per Share Price, multiplied by (B) the number of shares of Company Common Stock issuable immediately prior that were subject to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding such Company Common Stock Option immediately prior to the Merger Effective Time, and the per-share exercise price, rounded up to the nearest whole cent, will equal the quotient of (1) the exercise price per share of Company Common Stock at which such Company Common Stock Option was exercisable immediately prior to the Effective Time, divided by (2) the Closing Merger Consideration Per Share, divided by the Per Share Price, in each case in accordance with the Closing Date Payment Statement; providedand (ii) a contingent option, however, that in the case of any Option to which Section 421 issued as of the Code applies Effective Time, which shall vest and become exercisable on the date on which the Final Closing Statement becomes binding and effective, provided that the Optionholder continues to be employed by reason the Company or Parent or an Affiliate through such date, to purchase shares of its qualification under Parent Common Stock as described in Section 3.03(g)(ii) and Section 3.03(h)(ii) (each, a “Contingent Option”); provided that each Company Common Stock Option that is an “incentive stock option” (as defined in Section 422 of the Code, ) will be adjusted in accordance with the conversion formula shall be adjusted, if necessary, to comply with requirements of Section 424(a) 424 of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation and each Company Common Stock Option will be adjusted in a manner that will become subject to Exchange Options pursuant to this complies with Section 1.9 and 409A of the Code. (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options Company and the acquisition board of directors of Parent will adopt such resolutions as are necessary to give effect to the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to transactions contemplated by this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stock2.05.

Treatment of Options. Prior (a) Purchaser and Company agree that they shall each take all actions necessary such that at the Closing Date each outstanding option or right to acquire Shares ("Company Option") granted under any stock option or similar plan of the Company or under any agreement to which the Company or a Subsidiary is a party shall become vested and exercisable and each holder of Company Options shall be entitled at the Closing Date to elect by notice to the Merger Effective Time, Xxxxxx and Merger Sub Purchaser either option (i) or (ii) below in respect of that holder's Company Options: (i) The Purchaser shall take all pay against cancellation of the applicable Company Option to such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans holder within 72 hours of Xxxxxx the Closing Date with respect to Xxxxxx Common Stock each of such holder's Company Options an amount equal to the product of (each, an A) the excess of the Offer Price over the exercise price for that Company Option (the "OptionOption Spread") multiplied by (B) the number of Shares subject to that Company Option, which amount shall be automatically converted paid at such holder's option in cash or Purchaser Shares (with the Merger Effective Time into an value of Purchaser Shares for purposes of paying the Option Spread being equal to the Average Price), provided that holders of Company Options electing this option (an "Exchange Option"i) shall be subject to purchaseproration such that such holders shall not receive in the aggregate greater than 60 percent. of their consideration in cash. (ii) At the Closing Date, each of such holder's Company Options shall be deemed to constitute options to acquire, on the same terms and conditions as were applicable to each under such Option immediately before Company Options, the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Stock Purchaser Shares equal to the result (rounded down to the nearest whole share) of multiplying the number of shares of Xxxxxx Common Stock issuable Shares subject to the Company Option immediately prior to the Merger Effective Time upon Closing Date by the Conversion Ratio (as defined below), at an exercise of the Option and (ii) at a price per share equal to the result (rounded down to the nearest whole share) of dividing (A) the per share exercise price which existed under the corresponding of such Company Option immediately prior to the Merger Effective TimeClosing Date by (B) the Conversion Ratio; provided, however, that -------- ------- in the case of any Company Option to which Section 421 422 of the Code applies by reason applies, the adjustments provided for in this Section shall be effected in a manner consistent with the requirements of its qualification under Section 422 42(a) of the Code, the conversion formula and provided, further, that each -------- ------- holder of a Company Option electing this option shall be adjusted, if necessary, entitled by notice to comply with Section 424(a) require the Purchaser to purchase for cash up to 50 percent of each of that holder's Company Options at a price equal to the product of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance applicable Option Spread multiplied by the number of shares of Surviving Corporation Common Stock that will become Shares subject to Exchange such Company Options, with the balance of such Company Options being converted in accordance with this paragraph. At or prior to the Closing Date, the Company and the Purchaser shall make all necessary arrangements with respect to their stock option plans to permit the assumption of the unexercised Company Options by Purchaser pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise Section. For purposes of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Timethis Section, the Board term "Conversion Ratio" means a fraction, the numerator of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with which is the interpretive guidance average of the U.S. Securities high and Exchange Commission (low sales price of one Share on NASDAQ and on the "SEC") three trading days immediately preceding the Closing Date and any other applicable securities regulatory authorities so that the disposition denominator of which is the average of the Options high and low sales price of one Purchaser Share on NASDAQ on the acquisition of trading day immediately preceding the Exchange Options, any shares of Surviving Corporation Common Stock Closing Date. If a holder fails to make a timely election for option (i) or any other equity securities or derivative securities of the Surviving Corporation (ii) pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder paragraph (the "Exchange Act"a), such holder shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect deemed to Xxxxxx Common Stock have elected option (i) and other incentive compensation awards to receive equal parts cash and Purchaser Shares under option (including awards under the LTAP (as defined in the Stock Purchase Agreementi)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stock.

Treatment of Options. (a) Prior to the Merger First Effective Time, Xxxxxx the Company Board (or an appropriate committee thereof) shall adopt resolutions providing for and Merger Sub shall take all such actions as may be necessary to cause the following: (i) The vesting, as of immediately prior to the First Effective Time, of (x) the portion of any outstanding Option issued under the Trilogy Education Services, Inc. 2018 Equity Incentive Plan that is unvested and otherwise scheduled to vest on or before the first anniversary of the Closing Date and (y) the entirety of any other outstanding, unvested Option. (ii) The cancelation, as of the First Effective Time, of each unexpired and unexercised optionIn-the-Money Option then outstanding, whether at which time each holder of one or not vested or exercisablemore In-the-Money Options shall become entitled to receive from the Surviving Company, under stock option plans of Xxxxxx with respect to Xxxxxx each In-the-Money Option held by such holder immediately prior to the First Effective Time, an amount (x) 100% in the form of cash (in the case of Optionholders described in Section 2.06 that Parent elects to pay in cash) or (y) 30% in the form of Parent Common Stock (each, an "Option") to be automatically converted valued at the Parent Common Stock Value, and treating the Escrow Shares as delivered to the Optionholders at Closing) and 70% in the form of cash (in the case of all other Optionholders) equal to (A) the product of (I) the excess of (a) the aggregate value of the portion of the Closing Merger Effective Time into an option Consideration (an "Exchange Option") to purchase, with shares of Parent Common Stock valued based on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Parent Common Stock equal Value) allocable to a Common Share over (b) the exercise price per share of such In-the-Money Option, and (II) the number of shares of Xxxxxx Company Common Stock issuable immediately prior subject to such In-the-Money Option, plus (B) any amounts or other consideration, if any, to be paid in respect of such In-the-Money Option pursuant to Section 2.02(d) or Section 9.07, in each case less applicable withholding Taxes, to be paid in accordance with the Merger Effective Time upon exercise remainder of the this Section 2.04 (each such payment is referred to as an “Option and (ii) at a price per share equal to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective TimePayment”); provided, however, that to the extent the cash consideration received by an Optionholder is insufficient to cover the applicable withholding Taxes, the tax withholding obligations for such Optionholder shall be satisfied by the Company withholding from issuance the minimum number of whole shares of Parent Common Stock (with shares of Parent Common Stock valued based on the closing price per share of Parent Common Stock on the last trading day that precedes the Closing Date) as is sufficient, together with such cash consideration, to satisfy such withholding obligation; and (iii) The cancellation, as of the First Effective Time, of each Option that is not an In-the-Money Option (including, for the avoidance of doubt, any Options that remain unvested after giving effect to the Option vesting required Section 2.04(a)(i)) for no consideration. (iv) Notwithstanding anything to the contrary in this Agreement, if the aggregate Option Payment payable to the Optionholders in accordance with Section 2.04(a)(ii) with shares of Parent Common Stock valued based on the Parent Common Stock Value is greater than the aggregate Option Payment payable to the Optionholders with shares of Parent Common Stock valued based on Parent Common Stock Closing Reference Value (the “Alternative Option Payment Amount” and such difference is the “Option Excess Amount”), then (i) the Optionholders will be entitled to receive the Alternative Option Payment Amount at the First Effective Time in lieu of the Option Payment calculated in accordance with Section 2.04(a)(ii) and (ii) Parent shall increase the amount of value included in the Parent Retention Program by an amount equal to the Option Excess Amount, in an amount not to exceed the amount set forth on Schedule 2.04(a)(iv), for distribution to the Company Employees following the Closing in a manner set forth on Schedule 2.04(a)(iv). Notwithstanding anything to the contrary in this Agreement, if the aggregate Option Payment payable to the Optionholders in accordance with Section 2.04(a)(ii) with shares of Parent Common Stock valued based on the Parent Common Stock Value is less than the aggregate Option Payment payable to the Optionholders with shares of Parent Common Stock valued based on the Parent Common Stock Closing Reference Value, then the Optionholders shall be entitled to receive the aggregate Option Payment in accordance with Section 2.04(a)(ii) with shares of Parent Common Stock valued based on the Parent Common Stock Value). (b) On or prior to the first regular payroll date of the Surviving Company following the Closing Date (or in the case of any Option amounts payable pursuant to which Section 421 2.02(d) or Section 9.07, on or prior to the first regular payroll date that is at least five (5) Business Days following the receipt of such payment by the Code applies by reason of its qualification under Section 422 of the Code, the conversion formula shall be adjusted, if necessary, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange OptionsSurviving Company), the Surviving Company shall pay (or, if prior to the Second Effective Time, the First Surviving Corporation shall (a) reserve for issuance pay), as set forth on the number Funding Consideration Schedule to each Securityholder holding an In-the-Money Option, the cash portion of shares of Surviving Corporation its applicable Option Payment and Parent shall issue, as set forth on the Funding Consideration Schedule to each Securityholder holding an In-the-Money Option, the Parent Common Stock that will become subject portion of its applicable Option Payment. With respect to Exchange Options the cash consideration portion of the Option Payment, such payments shall be made (x) in the case of amounts payable in respect of Employee Options, through the payroll systems of the First Surviving Corporation, the Surviving Company or the applicable Company Subsidiary, as applicable, and (y) in the case of amounts payable in respect of Non-Employee Options, through the accounts payable of the First Surviving Corporation, the Surviving Company or the applicable Company Subsidiary, as applicable. All amounts payable pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, 2.04 shall be subject to Section 2.05(f). For the terms avoidance of doubt, (i) for the purpose of determining the amount of Taxes to be deducted and conditions applicable thereto. Prior to the Merger Effective Timewithheld from any Option Payments hereunder, the Board per share value of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Parent Common Stock will be converted into based on the closing price for Parent Common Stock on the last trading day that precedes (x) the Closing Date (in the case of Closing Merger Consideration) or (y) any date of release from the Escrow Funds in accordance with Section 9.07 (in the case of Escrow Shares) and (ii) to the extent the cash consideration received by an equal Optionholder is insufficient to cover the applicable withholding Taxes, the tax withholding obligations for such Optionholder shall be satisfied by the Company withholding from issuance the minimum number of restricted stock units whole shares of Parent Common Stock (or incentive compensation awardswith shares of Parent Common Stock valued based on the closing price per share of Parent Common Stock on the last trading day that precedes the Closing Date) as is sufficient, together with such cash consideration, to satisfy such withholding obligation. All shares of Parent Common Stock issued in respect of In-the-Money Options shall be subject to Surviving Corporation Common Stockthe restrictions on transfer set forth on Schedule 2.04(b).

Treatment of Options. Prior to (a) At the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx Common Stock (each, an "Option") to be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for but immediately prior to the transactions contemplated in Section 2.2), by virtue of the Merger and without any changes in vesting rights or acceleration action on the part of exercise rights any Option Holder and pursuant to the terms of the stock option plans Option Plan, each Option Holder’s Vested Options shall automatically be exercised and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that such holder thereof shall receive a number of whole shares (rounded down to the nearest whole share) of Surviving Corporation Common Stock equal to (i) the number of shares of Xxxxxx Common Stock issuable underlying the Vested Options so exercised, reduced by (ii) a number of shares of Common Stock equal to (A) the aggregate sum of the exercise prices of such Vested Options divided by (B) the Per Share Closing Merger Consideration (such shares withheld for the exercise prices, the “Exercise Price Shares”) and such difference between clauses (i) and (ii), the “Net Exercise Option Shares”). The Net Exercise Option Shares shall be further reduced by a number of whole shares of Common Stock (rounded down to the nearest whole share) (with each such whole share valued at the Per Share Closing Merger Consideration) with a value equal to the amount of all applicable federal, state and local income or other taxes required or permitted to be withheld in connection with the exercise of such Vested Options (unless the Option Holder has otherwise satisfied such withholding obligations) in a manner consistent with the Option Plan (any such shares withheld for taxes, the “Tax Withholding Shares”). The Net Exercise Option Shares (after taking into account the reduction described in the immediately preceding sentence with respect to the Tax Withholding Shares) received by the Option Holder shall be treated in accordance with Section 2.2(a). The Exercise Price Shares and Tax Withholding Shares shall be retained by the Company and shall be treated as Excluded Shares under Section 2.2(b). The Surviving Company shall, or shall cause one of its Affiliates to, use any amounts that would otherwise be paid to the applicable Option Holder in respect of the Tax Withholding Shares to pay the employment Tax withholding amounts for the Option Holders’ exercise of the Vested Options hereunder. (b) At the Effective Time, by virtue of the Merger and without any action on the part of any Option Holder and pursuant to the terms of the Option Plan, each Unvested Time Option shall be automatically cancelled and converted into a restricted cash award having a value equal to the Option Consideration, and shall remain subject to the then-remaining time-vesting conditions contained in the award held by any Option Holder and be payable at the time (if any) of satisfaction of such time-vesting conditions in the award agreement (a “Restricted Cash Award”). (c) At the Closing, the Parent shall deliver an amount equal to the aggregate Per Option Closing Merger Consideration for all Unvested Time Options (such amount, the “Optionholder Escrow Amount”) in immediately available funds into a separate escrow account (the “Optionholder Escrow Account”), such account to be established and maintained by the Escrow Agent pursuant to the Escrow Agreement (and which agreement, in any event, shall require that, prior to each payment from the Optionholder Escrow Account to any Option Holder or Parent (in the case of a Forfeited Restricted Cash Award), the Escrow Agent shall have first received a joint written instruction from Parent and the Representative to pay the applicable Option Holder or Parent (as applicable) the applicable amount in respect of such Option Holder’s Restricted Cash Award or Forfeited Restricted Cash Award (as applicable)). Subject to Section 2.12 and Section 2.13 below, the aggregate Per Option Closing Merger Consideration payable to a holder of Unvested Time Options immediately prior to the Merger Effective Time upon exercise shall be paid to (i) the applicable Option Holder from the Optionholder Escrow Account on the first regularly scheduled payroll date following the date on which the applicable portion of such holder’s Restricted Cash Award vests in accordance with the Option applicable award agreement and (ii) at a price per share equal to Parent from the exercise price Optionholder Escrow Account within five (5) Business Days following the date on which existed the applicable portion of the Restricted Cash Awards held by such holder is forfeited by the holder under the corresponding Option immediately prior to terms of the Merger applicable award agreement. (d) At the Effective Time; provided, howeverby virtue of the Merger, that in without any action on the case part of any Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code, the conversion formula shall be adjusted, if necessary, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject to Exchange Options Holder and pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms of the Option Plan, each Unvested Performance Option shall be cancelled and conditions applicable thereto. Prior terminated with no payment due thereon, and all rights in respect of each such Unvested Performance Option shall forthwith cease to exist. (e) The Company shall take such steps as of or cause to be taken all actions necessary to terminate the Merger Option Plan as of the Effective Time. For the avoidance of doubt, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, Restricted Cash Awards shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation remain outstanding pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of their terms following the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common StockEffective Time.

Treatment of Options. Prior to (a) Effective as of the Merger Effective Time, Xxxxxx the Company shall (i) terminate the Company Stock Plans, each as amended through the date of this Agreement, and Merger Sub shall take all such actions as may be necessary (ii) cancel, at the Effective Time, each option to cause each unexpired and unexercised option, whether or not vested or exercisable, purchase Shares granted under stock option plans of Xxxxxx with respect to Xxxxxx Common the Company Stock Plans (each, an "a “Company Option"”) to be automatically converted that is outstanding and unexercised as of such date. Each holder of a Company Option that is outstanding and unexercised at the Merger Effective Time into an option (an "Exchange Option") to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements applicable Company Stock Plan shall be entitled to receive from the Surviving Corporation immediately after the Effective Time, in existence exchange for the cancellation of such Company Option, an amount in cash equal to the excess, if any, of (x) the Offer Price over (y) the per share exercise price of such Company Option, multiplied by the number of Shares subject to such Company Option as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Stock equal to the number of shares of Xxxxxx Common Stock issuable immediately prior to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective Time; provided, however, that in the case of any Option . (b) All amounts payable pursuant to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code, the conversion formula Sections 2.5(a) shall be adjustedpaid without interest and shall be net of all applicable withholding taxes that Parent, if necessary, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange OptionsPurchaser, the Surviving Corporation and the Paying Agent, as the case may be, shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject be required to Exchange Options pursuant to this Section 1.9 deduct and (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject withhold with respect to the terms and conditions applicable thereto. Prior to making of such payment under the Merger Effective TimeCode, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder or any provision of applicable state, local or foreign law. To the extent that amounts are so withheld by Parent, Purchaser, the Surviving Corporation or the Paying Agent, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Company Options in respect of which such deduction and withholding was made by Parent, Purchaser, the Surviving Corporation or the Paying Agent. (c) Prior to the "Exchange Act"Effective Time, the Company shall take all necessary actions (i) (in accordance with that certain SEC no-action letter, dated January 12, 1999, to Skadden, Arps, Slate, Mxxxxxx & Fxxx) to provide that the treatment of Company Options pursuant to Section 2.5(a) will qualify for exemption under Rule 16b-3(d) or (e), shall be exempt for purposes of Section 16 of as applicable, under the Exchange Act. Restricted stock units with respect , and (ii) to Xxxxxx Common effect the treatment of the Company Stock Plans and other incentive compensation awards (Company Options set forth in this Section 2.5, including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stockobtaining any and all necessary consents.

Treatment of Options. Prior to At the Merger Effective Time, Xxxxxx and Merger Sub shall take all such actions as may be necessary each option to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans purchase shares of Xxxxxx with respect to Xxxxxx Company Common Stock (eacha “Company Option”) under the Company’s 2015 Equity Incentive Plan (the “2015 Company Stock Plan”) and the Company’s 2006 Equity Incentive Plan (the “2006 Company Stock Plan” and, together with the 2015 Company Stock Plan, the (the “Company Stock Plans”) outstanding immediately prior to the Effective Time, whether vested or unvested, shall, automatically and without any required action on the part of the holder thereof, cease to represent an "Option") option to purchase shares of Company Common Stock and shall be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that purchase a number of shares of Surviving Corporation Parent Common Stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Xxxxxx Company Common Stock issuable immediately prior subject to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding such Company Option immediately prior to the Merger Effective TimeTime and (y) the Company Equity Award Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of Company Common Stock of such Company Option immediately prior to the Effective Time divided by (B) the Company Equity Award Exchange Ratio; provided, however, that the exercise price and the number of shares of Parent Common Stock purchasable pursuant to the Company Options shall be determined in a manner consistent with the requirements of Section 409A of the Code; provided, further, that in the case of any Company Option to which Section 421 422 of the Code applies by reason of its qualification under Section 422 of the Codeapplies, the conversion formula exercise price and the number of shares of Parent Common Stock purchasable pursuant to such option shall be adjusteddetermined in accordance with the foregoing, if necessary, subject to comply with such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code. In connection with Except as specifically provided above, following the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject each Company Option shall continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable thereto. Prior to such Company Option immediately prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stock.

Treatment of Options. Prior to the Merger Effective Time(a) The Company shall provide that, Xxxxxx and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans of Xxxxxx with respect to Xxxxxx Common Stock (each, an "Option") to be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Stock equal to the number of shares of Xxxxxx Common Stock issuable immediately prior to the Merger Effective Time, each option to purchase Shares (an “Option”) granted under the 2004 Equity Incentive Plan of the Company and the 1994 Stock Option Plan of the Company that is outstanding and unexercised as of the Effective Time upon exercise (whether vested or unvested), except for Options as to which the treatment in the Merger is hereafter separately agreed in writing by Parent and the holder thereof, which Options shall be treated as so agreed, shall be cancelled, and the holder thereof shall receive at the Effective Time from the Company, or as soon as practicable thereafter from the Surviving Entity, in consideration for such cancellation, an amount in cash, equal to the product, if any, of (i) the number of Shares previously subject to such Option and multiplied by (ii) at a price per share equal to the excess, if any, of the Merger Consideration over the exercise price which existed under the corresponding Option immediately prior per Share previously subject to the Merger Effective Time; provided, however, that in the case such Option. (b) The Board of any Option to which Section 421 Directors of the Code applies by reason Company (or the appropriate committee thereof) shall, and such Board of Directors (or committee thereof) shall cause the Company to, take any actions reasonably necessary to effectuate the foregoing provisions of this Section 2.4 (in form and substance reasonably acceptable to Parent); it being understood that the intention of the parties is that following the Effective Time no holder of an Option, or any participant in any Plan or other employee benefit arrangement of the Company or any of its qualification under Section 422 of the Code, the conversion formula Affiliates shall be adjusted, if necessary, have any right thereunder to comply with Section 424(aacquire (or receive amounts measured by reference to) any capital stock (including any “phantom” stock or stock appreciation rights) of the CodeCompany, any Subsidiary or the Surviving Entity and all such Options and rights under any Plan shall be cancelled and, other than as expressly set forth herein, such items and Plans shall terminate as of the Effective Time. In connection with Prior to the issuance Effective Time (and to the extent requested by Parent, at the time that the amounts provided by this Section 2.4 are paid to the holders of Exchange the Options), the Surviving Corporation Company shall deliver to the holders of the Options appropriate notices, in form and substance reasonably acceptable to Parent, setting forth such holders’ rights pursuant to this Agreement. (ac) reserve for issuance The Company and Parent agree that it is their intent to, and that they will, report all income tax deductions resulting from the number payment of shares of Surviving Corporation Common Stock that will become subject to Exchange Options any amounts paid pursuant to this Section 1.9 and (b) from and after 2.4 in the Merger portion of the Company’s taxable year ended prior to the Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stock.

Treatment of Options. Prior to (a) At the Merger Effective Time, Xxxxxx or as soon thereafter as permitted by applicable Law, by virtue of the Merger and Merger Sub shall take all such actions as may be necessary to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock without any action taken by any holder of an option plans of Xxxxxx with respect to Xxxxxx Common Stock (each, an "Option") to purchase Common Stock granted to any current employee or director of the Company, each outstanding Option shall be automatically converted at the Merger Effective Time into an option to acquire Parent Ordinary Shares (an each, a "Exchange New Option") to purchasein an amount, at an exercise price and on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements in existence as of the date of this Agreement, that result from the occurrence of the Transactions), provided below: (i) that The number of shares Parent Ordinary Shares to be subject to each New Option shall be the number of Surviving Corporation Common Stock Parent Ordinary Shares equal to the number of shares of Xxxxxx Common Stock issuable immediately prior subject to such Option multiplied by a fraction, (x) the denominator of which is the Effective Price (converted into U.S. Dollars using the Exchange Rate) and (y) the numerator of which is the Common Stock Closing Amount, provided that any fractional number of Parent Ordinary Shares resulting from such multiplication shall be rounded down to the Merger Effective Time upon exercise of the Option and nearest whole share. (ii) at a The exercise price per share for each Parent Ordinary Share under each New Option shall be an amount of U.S. Dollars equal to the exercise price which existed per share of Common Stock under the corresponding Option, multiplied by a fraction, (x) the numerator of which is the Effective Price (converted into U.S. Dollars using the Exchange Rate) and (y) the denominator of which is the Common Stock Closing Amount. (iii) In the event that the Option immediately prior Earn-Out Amount becomes payable pursuant to Section 1.9, the number of Parent Ordinary Shares subject to each New Option, and the exercise price with respect to each Parent Ordinary Share subject to such New Option, shall be adjusted to the Merger number of Parent Ordinary Shares and exercise price that would have resulted pursuant to Section 1.3(a)(i) and 1.3(a)(ii) had the Option Earn-Out Amount for such New Option been taken into account in the determination of such number and price as of the Effective Time; provided. (iv) The terms and conditions (including with respect to the vesting thereof) of the New Options will be substantially the same as the terms and conditions of the cancelled Options, however, that except as set out in the case of any Option to which Section 421 amended and restated rules of the Code applies Plan adopted by reason Parent and as needed (A) to reflect the change in the security subject to the New Option, (B) to incorporate the provisions of its qualification under this Section 422 of the Code1.3, the conversion formula (C) to provide that such New Options shall be adjustedexercisable only by the payment of cash and to the extent permitted by Parent at the date of exercise, if necessary, by the sale of a number of Parent Ordinary Shares subject to the Option and (D) to comply with Section 424(aUK securities and company laws and tax and listing requirements. (b) of the Code. In connection with the issuance grant of Exchange the New Options, the Surviving Corporation Parent (or its employee benefit trust) shall (ai) reserve for issuance or transfer the number of shares of Surviving Corporation Common Stock Parent Ordinary Shares that will become subject to Exchange the New Options pursuant to this Section 1.9 1.3 and (bii) from and after the Merger Effective Time, upon exercise of Exchange New Options, make available for issuance or transfer all shares of Surviving Corporation Common Stock Parent Ordinary Shares covered therebyby such exercised New Options, subject to the terms and conditions applicable thereto. Prior to such New Options. (c) The grantee of a New Option shall execute a stock option assumption agreement in the Merger Effective Timeform attached hereto as Exhibit G, which, among other things, shall provide that such New Option shall be in full and complete satisfaction of any obligation of the Company, the Board of Directors of Xxxxxx, Surviving Corporation or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance Parent to such holder in respect of the U.S. Securities corresponding cancelled Option. (d) The assumption and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition replacement of the Options with New Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to related adjustments provided under this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other any Options that are "incentive compensation awards (including awards under the LTAP stock options" (as defined in Section 422 of the Stock Purchase Agreement)Code) shall be and are intended to be effected in a manner which is consistent with Section 424(a) of the Code, and the Parties agree to treat the New Options consistent with such intent. (e) If the Effective Price is in excess of the Market Price as of the Closing Date, the holder of each Option will be entitled to receive upon the exercise thereof in accordance with the terms of the New Option, an amount of cash (payable inin U.S. Dollars, or determined based on the Exchange Rate) equal to the difference between such Effective Price and such Market Price, each as of the Closing Date, multiplied by reference to, shares the number of Xxxxxx Parent Ordinary Shares into which such New Option is being exercised. (f) Each option to purchase Common Stock will held immediately prior to the Effective Time by a Person that is not an employee of the Company shall be converted into an equal number cancelled at the Effective Time, and no consideration shall be payable or issuable therefor, provided that, irrespective of restricted stock units (any vesting provisions to the contrary, such Person shall be entitled to exercise his or incentive compensation awards) with respect her option in full, for cash or in consideration for the conversion of outstanding indebtedness of the Company to Surviving Corporation Common Stocksuch Person, prior to the Effective Time.

Treatment of Options. Prior to At the Merger Effective Time, Xxxxxx and Merger Sub subject to Section 5.11 hereof, all options to purchase shares of the Company's Common Stock then outstanding under the Intrepid Systems, Inc. 1992 Stock Option Plan, as amended (the "Option Plan") as set forth on Schedule 1.4(b) shall take all such actions as may be necessary assumed by Parent in accordance with the provisions described below. (1) At the Effective Time, each outstanding option to cause each unexpired and unexercised option, whether or not vested or exercisable, under stock option plans purchase shares of Xxxxxx with respect to Xxxxxx the Company's Common Stock (each, an a "Company Option") under the Option Plan or otherwise, whether vested or unvested, shall be, as a consequence of the Merger, assumed by Parent. Each Company Option so assumed under this Agreement shall continue to have, and be automatically converted at the Merger Effective Time into an option (an "Exchange Option") to purchasesubject to, on the same terms and conditions set forth in the Option Plan and/or as were applicable to each provided in the respective option agreements governing such Company Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant prior to the terms of the stock option plans and related agreements in existence as of the date of this AgreementEffective Time, except that result from the occurrence of the Transactions), (i) such Company Option shall be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Surviving Corporation Company Common Stock underlying such Company Option immediately prior to the Effective Time, and the Exchange Ratio, rounded to the nearest whole number of shares of Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Option shall be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded to the nearest whole cent; provided, however, that Parent may make but is not required to make such adjustments to the number of shares of Xxxxxx Parent Common Stock issuable or the exercise price of such assumed Company Option, as Parent reasonably deems necessary, in order to prevent any such Company Option that is characterized by the Company as an "incentive stock option" immediately prior to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal Closing from failing to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective Time; provided, however, that in the case of any Option to which Section 421 of the Code applies so qualify solely by reason of its qualification under Section 422 of the Code, the conversion formula shall be adjusted, if necessary, to comply with Section 424(aSections 424(a)(1) or 424(a)(2) of the Internal Revenue Code of 1986, as amended (the "Code. In connection with "). (2) Promptly following the issuance of Exchange Options, the Surviving Corporation shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject to Exchange Options pursuant to this Section 1.9 and (b) from and after the Merger Effective Time, upon exercise Parent shall issue to each holder of Exchange Options, make available for issuance all shares an outstanding Company Option a document evidencing the foregoing assumption of Surviving Corporation Common Stock covered thereby, subject to the terms and conditions applicable thereto. Prior to the Merger Effective Time, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), shall be exempt for purposes of Section 16 of the Exchange Act. Restricted stock units with respect to Xxxxxx Common Stock and other incentive compensation awards (including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stocksuch Company Option.

Treatment of Options. Prior to (a) Effective as of the Merger Effective Time, Xxxxxx the Company shall (i) terminate the Company Stock Plans, each as amended through the date of this Agreement, and Merger Sub shall take all such actions as may be necessary (ii) cancel, at the Effective Time, each option to cause each unexpired and unexercised option, whether or not vested or exercisable, purchase Shares granted under stock option plans of Xxxxxx with respect to Xxxxxx Common the Company Stock Plans (each, an "a “Company Option"”) to be automatically converted that is outstanding and unexercised as of such date. Each holder of a Company Option that is outstanding and unexercised at the Merger Effective Time into an option (an "Exchange Option") to purchase, on the same terms and conditions as were applicable to each such Option immediately before the Merger Effective Time (except for any changes in vesting rights or acceleration of exercise rights pursuant to the terms of the stock option plans and related agreements applicable Company Stock Plan shall be entitled to receive from the Surviving Corporation immediately after the Effective Time, in existence exchange for the cancellation of such Company Option, an amount in cash equal to the excess, if any, of (x) the Offer Price over (y) the per share exercise price of such Company Option, multiplied by the number of Shares subject to such Company Option as of the date of this Agreement, that result from the occurrence of the Transactions), (i) that number of shares of Surviving Corporation Common Stock equal to the number of shares of Xxxxxx Common Stock issuable immediately prior to the Merger Effective Time upon exercise of the Option and (ii) at a price per share equal to the exercise price which existed under the corresponding Option immediately prior to the Merger Effective Time; provided, however, that in the case of any Option . (b) All amounts payable pursuant to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code, the conversion formula Sections 2.5(a) shall be adjustedpaid without interest and shall be net of all applicable withholding taxes that Parent, if necessary, to comply with Section 424(a) of the Code. In connection with the issuance of Exchange OptionsPurchaser, the Surviving Corporation and the Paying Agent, as the case may be, shall (a) reserve for issuance the number of shares of Surviving Corporation Common Stock that will become subject be required to Exchange Options pursuant to this Section 1.9 deduct and (b) from and after the Merger Effective Time, upon exercise of Exchange Options, make available for issuance all shares of Surviving Corporation Common Stock covered thereby, subject withhold with respect to the terms and conditions applicable thereto. Prior to making of such payment under the Merger Effective TimeCode, the Board of Directors of Xxxxxx, or an appropriate committee of non-employee directors thereof, as applicable, shall adopt resolutions consistent with the interpretive guidance of the U.S. Securities and Exchange Commission (the "SEC") and any other applicable securities regulatory authorities so that the disposition of the Options and the acquisition of the Exchange Options, any shares of Surviving Corporation Common Stock or any other equity securities or derivative securities of the Surviving Corporation pursuant to this Agreement by any officer or director of Xxxxxx who may become a covered person of the Surviving Corporation for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder or any provision of applicable state, local or foreign law. To the extent that amounts are so withheld by Parent, Purchaser, the Surviving Corporation or the Paying Agent, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Company Options in respect of which such deduction and withholding was made by Parent, Purchaser, the Surviving Corporation or the Paying Agent. (c) Prior to the "Exchange Act"Effective Time, the Company shall take all necessary actions (i) (in accordance with that certain SEC no-action letter, dated January 12, 1999, to Skadden, Arps, Slate, Xxxxxxx & Xxxx) to provide that the treatment of Company Options pursuant to Section 2.5(a) will qualify for exemption under Rule 16b-3(d) or (e), shall be exempt for purposes of Section 16 of as applicable, under the Exchange Act. Restricted stock units with respect , and (ii) to Xxxxxx Common effect the treatment of the Company Stock Plans and other incentive compensation awards (Company Options set forth in this Section 2.5, including awards under the LTAP (as defined in the Stock Purchase Agreement)) payable in, or determined by reference to, shares of Xxxxxx Common Stock will be converted into an equal number of restricted stock units (or incentive compensation awards) with respect to Surviving Corporation Common Stockobtaining any and all necessary consents.