Common use of Treatment of Options Clause in Contracts

Treatment of Options. Immediately prior to the Effective Time, each option to purchase Shares (each, a “Company Option”) under any stock option or other equity or equity-based plan of the Company, including the 2007 Equity and Incentive Plan, as amended and restated effective as of June 11, 2013 (the “Company Equity Plans”), that is unexpired and unexercised and vested immediately prior to the Effective Time (a “Vested Company Option”) (or portion thereof), shall be cancelled and, in exchange therefor, each former holder of any such cancelled Vested Company Option shall be entitled to receive, in consideration of the cancellation of such Vested Company 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 product of (i) the total number of Shares subject to such Vested Company Option immediately prior to such cancellation and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share subject to such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of a Vested Company Option that, as of immediately prior to such cancellation, has an exercise price per Share that is equal to or greater than the Merger Consideration shall be entitled to any payment with respect to such cancelled Vested Company Option. From and after the Effective Time, each Vested Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to the payment of the Option Payment, if any. On or as soon as practicable following the Closing, but in any event no later than 15 days following the Closing, the Surviving Corporation shall make, by a payroll payment through the Company’s or Merger Sub’s payroll provider and subject to withholding, if any, as described in Section 2.5 to each holder of Vested Company Options, such holder’s Option Payment.

Treatment of Options. Immediately Under the terms of the Purchase Agreement, conditioned upon execution of this Agreement by Optionholder, (a) immediately prior to the Effective Time, and contingent upon, the Closing, the vesting of all unvested Options, if any, will be accelerated such that such Options shall be fully vested and exercisable and (b) at the Effective Time, each option to purchase Shares (eachOption that is held by Optionholder and outstanding, a “Company Option”) under any stock option or other equity or equity-based plan of the Company, including the 2007 Equity vested and Incentive Plan, as amended and restated effective unexercised as of June 11, 2013 (the “Company Equity Plans”), that is unexpired and unexercised and vested immediately prior to the Effective Time (a “Vested Company Option”) after giving effect to the acceleration of vesting of such Options pursuant to the preceding clause (or portion thereofa)), shall be cancelled and, canceled at the Effective Time in exchange therefor, each former holder of any such cancelled Vested Company Option shall be entitled to receive, in consideration of for (i) the cancellation of such Vested Company 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 (A) the product of (ix) the total number of Shares subject to such Vested Company Option immediately prior to such cancellation and (ii) the excessamount, if any, by which (1) Per Unit Amount exceeds (2) the per Unit exercise price, as set forth on Exhibit A, multiplied by (y) the number of the Merger Consideration over the exercise price per Share Company Units subject to such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of a Vested Company Option that, and vested as of immediately prior to such cancellation, has an exercise price per Share that is equal to or greater than the Merger Consideration shall be entitled to any payment with respect to such cancelled Vested Company Option. From and after the Effective TimeTime and in accordance with the terms and conditions of the Company Plan (such amount, each Vested Company the “Option shall no longer be exercisable Payment Amount”), plus (ii) the right for the Optionholder to receive his or her Additional Pro Rata Share of one or more distributions of any (A) Escrow Amount by the former holder thereof, but shall only entitle such holder Escrow Agent due and payable pursuant to the payment Escrow Agreement and the Purchase Agreement and (B) Representative Expense Amount due and payable pursuant to the Purchase Agreement, in each case in respect of such Option, plus (iii) the Option Payment, if any. On right for the Optionholder to receive his or as soon as practicable following the Closing, but in any event no later than 15 days following the Closing, the Surviving Corporation shall make, by a payroll payment through the Company’s her Additional Pro Rata Share of one or Merger Sub’s payroll provider and subject to withholdingmore Earnout payments, if any, as described in due and payable pursuant to Section 2.5 of the Purchase Agreement in respect of such Option. Buyer shall contribute the Option Payment Amount to each holder the Company, and the Company shall pay such amount (less applicable withholding and any Taxes required to be paid by the Company with respect thereto) to the Optionholder through special payroll on the Closing Date. Optionholder hereby acknowledges and agrees that the Per Unit Amount and the Option Payment Amount may be subject to adjustment at Closing pursuant to Section 2.2 of Vested Company Optionsthe Purchase Agreement. Optionholder further acknowledges and agrees that Optionholder is bound by, such holder’s Option Paymentand amounts received hereunder are subject to further adjustment under, Section 2.3 and Section 2.4 of the Purchase Agreement.

Treatment of Options. Immediately (a) Prior to the Effective Time, the Company shall give notice to each Person holding an outstanding option to purchase shares of Company Common Stock granted under the Company’s stock option plan (the “Company Option Plan”) or otherwise (such options, the “Company Options”) which notice will: (i) indicate that the Board of Directors of the Company has caused the vesting applicable to their Company Options to be accelerated in full in connection with the Merger effective immediately prior to the Effective Time, each option contingent upon the Closing, irrespective of any acceleration of vesting otherwise applicable to purchase Shares their Company Options under the Company Option Plan or otherwise in connection with the Merger, (each, a “Company Option”ii) under any stock option or other equity or equity-based plan inform them of the Companyperiod of time prior to the Effective Time in which they may exercise or convert their Company Options, including contingent upon the 2007 Equity Closing, and Incentive Plan(iii) offer them the ability to either (x) exercise their Company Options, as amended upon the payment of the cash exercise price therefor in accordance with the terms of such Company Options, with such exercise in each case contingent upon the Closing and restated effective as of June 11immediately prior to the Effective Time, 2013 or (y) convert the “unexercised portion of their Company Equity Plans”Options into the right to receive an amount of cash determined pursuant to Section 2.6(d), that is unexpired with such conversion in each case contingent upon the Closing and unexercised and vested effective as of immediately prior to the Effective Time (each such Company Option for which the conversion right pursuant to this clause (y) has been properly exercised, a “Vested Converted Company Option”) (or portion thereof). Any shares of Company Common Stock issued upon the exercise of such Company Options will be converted into the right to receive the Per Share Merger Consideration at the Effective Time pursuant to the provisions of Section 2.6. Any Company Options not so exercised and/or converted, as applicable, shall be cancelled and, in exchange therefor, each former holder canceled as of the Effective Time without the payment of any such cancelled Vested Company Option shall be entitled to receive, in consideration of the cancellation of such Vested Company 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 product of (i) the total number of Shares subject to holder, and such Vested Company Option immediately prior to such cancellation and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share subject to such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of a Vested Company Option that, as of immediately prior to such cancellation, has an exercise price per Share that is equal to or greater than the Merger Consideration shall be entitled to any payment have no rights with respect to such cancelled Vested Company Option. From Option following the Effective Time. (b) As soon as reasonably practicable after the Effective Time, Parent will pay each holder of Converted Company Options the amount to which such holder is entitled pursuant to Section 2.6(d), either by check or by wire transfer. (c) Except as otherwise provided in subsections (a) and (b) above, the holders of Company Options will have no further rights in respect of any Company Options from and after the Effective Time, each Vested and the Company Option Plan and any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of Company Capital Stock shall no longer be exercisable terminated by the former holder thereof, but shall only entitle such holder to the payment Company as of the Option Payment, if any. On or as soon as practicable following the Closing, but in any event no later than 15 days following the Closing, the Surviving Corporation shall make, by a payroll payment through the Company’s or Merger Sub’s payroll provider and subject to withholding, if any, as described in Section 2.5 to each holder of Vested Company Options, such holder’s Option PaymentEffective Time.

Treatment of Options. Immediately prior to The Company through action of its board of directors may declare, effective at the Merger Effective Time, each option to purchase Shares that the vesting of certain outstanding unvested Options will be partially or fully accelerated, on a case-by-case basis. To the extent not already done so on or before the Closing Date, the Company (each, a “Company Option”) under any stock option including directly through action of its board of directors or other equity or equity-based plan indirectly through action of the Companyboard of directors of 4Sided) may declare, including effective at the 2007 Equity and Incentive PlanMerger Effective Time, as amended and restated that certain outstanding Vested Options previously granted (to the extent not previously exercised) set forth on Schedule 1.11(a) shall be exercised effective as of June 11the Closing, 2013 with payment for such Options to be made by forfeiture of that number of shares of Common Stock otherwise deliverable upon exercise of such Vested Option with an aggregate Per Share Closing Consideration equal to the aggregate exercise price for such Vested Options, with the balance of the Vested Option to be issued in the form of shares of Common Stock that will be treated in accordance with the provisions of Section 1.6(b)(1). To the extent not already done so on or before the Closing Date, the Company (including directly through action of its board of directors or indirectly through action of the “Company Equity Plans”board of directors of 4Sided) will declare, effective at the Merger Effective Time, that all other outstanding Vested Options previously granted (to the extent not previously exercised), that is unexpired may not be exercised and unexercised will instead be canceled at the Merger Effective Time in exchange for the right to receive upon execution and vested immediately prior delivery of a Joinder and Letter of Transmittal in respect of such Vested Option: (1) payment of consideration equal to the Effective Time amount (a “Vested Company Option”) (or portion thereofif any), shall be cancelled and, in exchange therefor, for each share of Common Stock covered by such canceled Vested Option as set forth next to the name of the former holder of such Vested Option on Exhibit 1.6 corresponding to the “Closing Consideration for Options” column (as such amount will then be reduced by any such cancelled Vested Company Option shall be entitled to receive, in consideration applicable withholdings and any other adjustments set forth therein) minus a Pro Rata Portion of the cancellation amount to be contributed with respect to each such holder of an Option to the Indebtedness and the Transaction Expenses; and (2) the right to receive with respect to each share of Common Stock covered by such canceled Vested Option a percentage of any future cash disbursements required to be made arising from any Upward Merger Consideration Adjustment in accordance with Section 1.9 as set forth next to the name of the former holder of such Vested Company Option on Exhibit 1.6 corresponding to the column applicable to Upward Merger Consideration Adjustments, if and in settlement thereforwhen subsequently disbursed to the Sellers; provided, a payment in cash (however, that any such disbursement be made within five years pursuant to Section 409A of the Code. All of the foregoing will be subject to the terms of this Agreement, including that such payment of consideration will be made at the times and subject to the conditions hereunder. (3) Without limitation of Section 1.12, the amounts payable to the holders of Vested Options hereunder are subject to and will be reduced by any applicable withholding or other Taxes required by applicable Law) of an amount equal to the product of (i) the total number of Shares subject to such Vested Company Option immediately prior to such cancellation and (ii) the excess, if any, that are due as a result of the Merger Consideration over the exercise price per Share subject to such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of a Vested Company Option that, as of immediately prior to such cancellation, has an exercise price per Share that is equal to or greater than the Merger Consideration shall be entitled to any payment with respect to such cancelled Vested Company Option. From and after the Effective Time, each Vested Company Option shall no longer be exercisable transactions contemplated by the former holder thereof, but shall only entitle such holder to the payment of the Option Payment, if any. On or as soon as practicable following the Closing, but in any event no later than 15 days following the Closing, the Surviving Corporation shall make, by a payroll payment through the Company’s or Merger Sub’s payroll provider and subject to withholding, if any, as described in this Section 2.5 to each holder of Vested Company Options, such holder’s Option Payment1.11.

Treatment of Options. Immediately (a) Pursuant to the terms and subject to the conditions set forth herein, by virtue of the Merger and without any additional action from any Party, at the Effective Time (i) each Vested Option shall be cancelled and exchanged for the right to receive an amount in cash equal to the product of (A) the aggregate number of shares of Common Stock the Optionholder could have purchased if such Optionholder had exercised such Option in full immediately prior to the Closing, multiplied by (B) the Per Share Option Amount, and (ii) each Option that is not a Vested Option shall be cancelled and forfeited without any consideration in respect thereof. Upon the cancellation of each Option in accordance with this Section 2.03, each Optionholder shall cease to have any rights with respect thereto, except the right to receive the consideration (if any) payable with respect to Vested Options pursuant to this Section 2.03. Payments to Optionholders under this Section 2.03 shall be made on the Closing Date (or such later date as provided in the applicable Option Surrender Agreement), (x) in the case of each Employee Optionholder, through the Surviving Corporation’s payroll system and subject to applicable Tax withholdings or (y) in the case of any Non-Employee Optionholder, through the Surviving Corporation’s payroll system but not subject to applicable Tax withholdings. (b) Notwithstanding anything herein to the contrary, as a condition to receiving any payment pursuant to this Section 2.03, each holder of Vested Options shall be required to execute and deliver to the Company an Option Surrender Agreement, and no consideration in respect of any Option shall be payable if the relevant Optionholder has not executed and delivered such Option Surrender Agreement by the Closing Date (or such later date as set forth in the applicable Option Surrender Agreement). (c) The Company (including the board of directors of the Company) shall, prior to the Effective Time, each option take or cause to purchase Shares be taken all actions, obtain all consents and provide all notices necessary or advisable (each, a “Company Option”whether under the Option Plan or otherwise) under any stock option or other equity or equity-based plan to effectuate the provisions of this Section 2.03 and to terminate the Company, including the 2007 Equity and Incentive Plan, as amended and restated Option Plan effective as of June 11, 2013 (the “Company Equity Plans”), that is unexpired and unexercised and vested immediately prior to the Effective Time (a “Vested Company Option”) (or portion thereof), shall be cancelled and, in exchange therefor, each former holder of any such cancelled Vested Company Option shall be entitled to receive, in consideration of the cancellation of such Vested Company 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 product of (i) the total number of Shares subject to such Vested Company Option immediately prior to such cancellation and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share subject to such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of a Vested Company Option so that, as of immediately prior to such cancellation, has an exercise price per Share that is equal to or greater than the Merger Consideration shall be entitled to any payment with respect to such cancelled Vested Company Option. From and after following the Effective Time, each Vested Company Option there shall be no longer be exercisable by the former holder thereof, but shall only entitle such holder outstanding Options (whether vested or unvested) or Liabilities to the payment any Optionholder in respect of his or her Options or under the Option PaymentPlan, if any. On or as soon as practicable following other than the Closing, but in any event no later than 15 days following the Closing, the Surviving Corporation shall make, by a payroll payment through the Company’s or Merger Sub’s payroll provider and subject to withholding, if any, as described payments expressly set forth in Section 2.5 to each holder of Vested Company Options, such holder’s Option Payment2.03(a).

Treatment of Options. Immediately prior to As of the Effective Acceptance Time, each option to purchase Shares (each, a “Company Option”) under any stock option or other equity or equity-based plan of the Company, including the 2007 Equity and Incentive Plan, as amended and restated effective as of June 11, 2013 (the “Company Equity Plans”), Option that is unexpired outstanding and unexercised and vested immediately prior to the Effective Acceptance Time (a “Vested Company Option”) (whether vested or portion thereofunvested), shall vest in full and become fully exercisable. The board of directors of the Company (or, if appropriate, any committee thereof) has taken or will take all actions that are commercially reasonable to provide that, upon the Acceptance Time, the Company Options shall be cancelled and, in exchange therefor, each former canceled by virtue of the completion of the Offer and without any action on the part of any holder of any such cancelled Vested Company Option shall be entitled Option, in consideration for the right at the Acceptance Time to receive, as promptly as reasonably practicable following the Acceptance Time (except with respect to the Company Options granted pursuant to the Company’s 2004 Stock Option Plan, which shall be paid at the time described in consideration the last sentence of the cancellation of such Vested Company Option and in settlement thereforthis Section 3.3(a)), a cash payment in cash (subject to any applicable withholding or other Taxes required by applicable Law) of an amount with respect thereto equal to the product of (iA) the total number of Shares shares of Common Stock previously subject to such Vested Company Option immediately prior to such cancellation and (iiB) the excess, if any, of the Merger Consideration Offer Price over the exercise price per Share share of Common Stock previously subject to such Vested Company Option immediately prior to such cancellation Option, less any required withholding Taxes (such amounts payable hereunder being referred to as the “Option Cash Payment” and the sum of all such payments, the “Total Option Cash Payments”). No As of the Acceptance Time, all Company Options shall no longer be exercisable or outstanding and shall automatically cease to exist, and each holder of a Vested Company Option thatshall cease to have any rights with respect thereto, except the right to receive the Option Cash Payment (plus, with respect to the Company Options granted pursuant to the Company’s 2004 Stock Option Plan, accrued interest as required by the last sentence of immediately prior this Section 3.3(a)), and the Company has taken or will take all action necessary to such cancellation, has an ensure that former holders of Company Options will have no rights from and after the Acceptance Time other than the right to receive the Option Cash Payment from the Surviving Corporation in accordance with this Section 3.3(a). If the exercise price per Share that share of Common Stock with respect to any Company Option is equal to or greater than the Merger Consideration Offer Price, such Company Option shall be entitled be, upon the Acceptance Time, canceled pursuant to any payment this Section 3.3(a) without consideration. Prior to the Acceptance Time, the Company shall take the actions necessary to effectuate this Section 3.3(a), including providing holders of Company Options with notice of their rights with respect to any such cancelled Vested Company OptionOptions as provided herein. From and after On the Effective Time, each Vested Company Option shall no longer be exercisable by tenth calendar day following the former holder thereof, but shall only entitle such holder to the payment of the Option PaymentAcceptance Time (or, if any. On or as soon as practicable such day is not a Business Day, then on the first Business Day immediately following the Closing, but in any event no later than 15 days following the Closingsuch tenth day), the Surviving Corporation Company shall make, mail (or make available for collection by a payroll payment through the Company’s or Merger Sub’s payroll provider and subject to withholding, if any, as described in Section 2.5 hand) to each holder of Vested Company OptionsOptions that were granted pursuant to the Company’s 2004 Stock Option Plan a check in an amount due and payable to such holder pursuant to this Section 3.3(a) in respect of such Company Option, plus an amount equal to the interest that has accrued thereon between the Acceptance Time and the date on which the payment is made to such holder’s Option Paymentholder in accordance with this sentence, assuming a 6% per annum rate of interest.

Treatment of Options. Immediately prior to the Effective Time, each unexpired and unexercised option to purchase Shares (each, a “Company Option”) ), under any stock option or other equity or equity-based plan of the Company, including the 2007 Equity Amended and Incentive Restated 1995 Management Stock Option Plan, as amended the Second Amended and restated effective as of June 11Restated 1995 Incentive and Nonqualified Stock Option Plan for Management Employees, 2013 the Restricted Stock Plan, the Amended and Restated 2007 Omnibus Incentive Compensation Plan and the Amended and Restated Formula Plan for Non-Employee Directors or any other plan, agreement or arrangement (the “Company Equity Plans”), that is unexpired and unexercised and vested immediately prior to the Effective Time (a “Vested Company Option”) (whether or portion thereof)not then exercisable or vested, shall be cancelled and, in exchange therefor, each former holder of any such cancelled Vested Company Option shall be entitled to receive, in consideration of the cancellation of such Vested Company 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 product of (i) the total number of Shares subject to such Vested Company Option immediately prior to such cancellation and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share subject to such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of a Vested Company Option that, as of immediately prior to such cancellation, has an exercise price per Share that is equal to or greater than the Merger Consideration shall be entitled to any payment with respect to such cancelled Vested Company Option. From and after the Effective Time, each Vested Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to the payment of the Option Payment, if any. On or as As soon as practicable following the Closing, but in any event on or prior to the next applicable payroll payment date (but no later than 15 days fifteen (15) days) following the Closing, the Surviving Corporation shall make, make by a payroll payment through the Company’s or Merger Subthe Purchaser’s payroll provider and subject to withholding, if any, as described in Section 2.5 below to each holder of Vested Company Options, Options such holder’s Option Payment.

Treatment of Options. Immediately prior to the Effective Time, each unexpired and unexercised option to purchase Shares (each, a “Company Option”) ), under any stock option or other equity or equity-based plan of the Company, including EndoChoice Holdings, Inc. 2015 Equity Incentive Plan (including the 2007 Equity and Israeli Appendix to such plan), the ECPM Holdings, LLC 2013 Incentive Unit Plan (including the Israeli Appendix to such plan), Peer Medical Ltd. 2010 Israeli Share Option Plan, as amended and restated effective as of June 11EndoChoice, 2013 Inc. 2007 Stock Incentive Plan or any other plan, agreement or arrangement (the “Company Equity Plans”), that is unexpired and unexercised and vested immediately prior to the Effective Time (a “Vested Company Option”) (whether or portion thereof)not then exercisable or vested, shall be cancelled and, in exchange therefor, each former holder of any such cancelled Vested Company Option shall be entitled to receive, in consideration of the cancellation of such Vested Company 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 product of (i) the total number of Shares subject to such Vested Company Option immediately prior to such cancellation and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share subject to such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of a Vested Company Option that, as of immediately prior to such cancellation, has an exercise price per Share that is equal to or greater than the Merger Consideration shall be entitled to any payment with respect to such cancelled Vested Company Option. From and after the Effective Time, each Vested Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to the payment of the Option Payment, if any. On or as As soon as practicable following the Closing, but in any event on or prior to the next applicable payroll payment date (but no later than 15 days fifteen (15) calendar days) following the Closing, the Surviving Corporation shall make, make by a payroll payment through the Company’s or Merger Subthe Purchaser’s payroll provider and subject to withholding, if any, as described in Section 2.5 2.7 below to each holder of Vested Company Options, Options such holder’s Option Payment.

Treatment of Options. Immediately (a) By virtue of the transactions contemplated hereby, immediately prior to the Effective Time, each option all issued, outstanding and unexercised options to purchase Shares shares of Common Stock pursuant to the Company’s 2011 Stock Option and Grant Plan (eachthe “Plan” and, each such option, a “Company Stock Option”) under any stock option or other equity or equity-based plan of the Company, including the 2007 Equity and Incentive Plan, as amended and restated effective that are vested as of June 11, 2013 (the “Company Equity Plans”), that is unexpired and unexercised and vested immediately prior to the Effective Time after giving effect to any vesting or acceleration of vesting resulting from the consummation of the transactions contemplated by this Agreement (each a “Vested Company Stock Option”) (or portion thereof), shall be cancelled and, canceled and terminated in exchange therefor, each former for the right of the holder of any such cancelled Vested Company Option shall be entitled to receive, in consideration of the cancellation of each such Vested Company Stock Option and in settlement therefor, (each a payment in cash (subject “Vested Optionholder”) to any applicable withholding or other Taxes required by applicable Law) of an amount equal to the product of (i) the total number of Shares subject to such Vested Company Option immediately prior to such cancellation and (ii) the excess, if any, receive a portion of the Merger Consideration over for each underlying Share represented by such Vested Stock Option equal to the Merger Consideration Per Share less the applicable per Share exercise price per Share of such Vested Stock Option (the “Optionholder Consideration Per Share”), subject to such Section 2.11 and Section 2.12 and all applicable withholding Taxes. (b) At the Closing, all Stock Options that are not Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of a Vested Company Option that, Stock Options as of immediately prior to such cancellationthe Closing after giving effect to any vesting or acceleration of vesting resulting from the consummation of the transactions contemplated by this Agreement shall be automatically canceled, has an exercise price per Share that is equal terminated and forfeited pursuant to or greater than the Plan and the holders thereof shall not be entitled to receive any portion of the Merger Consideration shall be entitled to or any payment with respect to such cancelled Vested Company Option. From and after consideration thereof. (c) By virtue of the transactions contemplated hereby, at the Effective Time, each Vested Company Option the Plan and all Stock Options shall no longer be exercisable by the former holder thereof, but shall only entitle such holder automatically terminate. (d) Prior to the payment of the Option Payment, if any. On or as soon as practicable following the Closing, but in any event no later than 15 days following the Closing, the Surviving Corporation Board of Directors of the Company shall maketake any and all resolutions or actions necessary or required (under the Plan, applicable Law, the applicable stock option award agreement or otherwise) to give effect to the transactions contemplated by a payroll payment ‎this Section 2.5, and to ensure that, from and after the Closing, each holder of Stock Options shall have no rights with respect thereto, except the right to receive the applicable consideration specified in Section 2.5(a). (e) Subject to Section 2.17, all cash payments required to be made to Vested Optionholders from time to time pursuant to this Agreement, the Paying Agent Agreement or the Escrow Agreement shall be paid by (or at the direction of) Purchaser, the Paying Agent or the Escrow Agent, as applicable, to the Company and by the Company to the Vested Optionholders through the Company’s or Merger Sub’s payroll provider system in the first payroll distribution after such amount has become due and subject to withholding, if any, as described in Section 2.5 to each holder of Vested Company Options, such holder’s Option Paymentpayable.

Treatment of Options. Immediately prior to At the Effective Time, each unexpired and unexercised option to purchase Common Shares (each, a the “Company OptionOptions”) ), under any stock option or other equity or equity-based plan of the Company, including the 2007 Equity Amended and Restated 1998 Incentive and Non-Qualified Stock Plan, as amended the 2009 Stock Incentive Plan and restated effective as of June 11any other similar plan, 2013 agreement or arrangement (the “Company Equity Stock Option Plans”), that is unexpired and unexercised and vested immediately prior to the Effective Time (a “Vested Company Option”) (whether or portion thereof)not then exercisable or vested, shall be cancelled andfully vested and automatically (and without any action on the part of the holder thereof) be cancelled, cease to exist and no longer be exercisable or outstanding, and in exchange therefor, each former holder of any such cancelled Vested Company Option shall be entitled converted into a vested right (the “Right”) entitling the holder thereof to receivereceive from the Surviving Corporation on the date of the first regularly-scheduled payroll run following the Effective Time, but in any event no later than seven (7) calendar days after the Effective Time, (and through the Surviving Corporation’s payroll system with respect to Company Options issued in respect of a grantee’s employment), in consideration of the cancellation of such Vested Company Option and in settlement therefor, a payment in cash (subject to any applicable withholding or other Taxes required by applicable LawLaw to be withheld in accordance with Section 2.2(e) (“Withholding Rights”)) of an amount equal to the product of (ix) the total number of Common Shares subject to such Vested Company Option as of immediately prior to such cancellation the Effective Time and (iiy) the excess, if any, of the Common Share Merger Consideration over the exercise price per Common Share subject to such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of a Vested Company Option that, as of immediately prior to such cancellationthe Effective Time; provided, has an however, that if the exercise price per Common Share that of any such Company Option is equal to or greater than the Common Share Merger Consideration Consideration, such Company Stock Option shall be entitled cancelled without any cash payment being made in respect thereof (collectively, the “Stock Option Payment”). Prior to the Effective Time, the Company shall take all actions reasonably necessary (including amending the Company’s Stock Option Plans) to effectuate the provisions of this Section 2.3 to the extent permitted by the terms of the Company’s Stock Option Plans and any payment with respect to such cancelled Vested agreements governing the terms of any Company Option. From Parent shall at all times from and after the Effective Time, each Vested Company Option shall no longer be exercisable by Time cause the former holder thereof, but shall only entitle such holder Surviving Corporation to the payment of the Option Payment, if any. On or as soon as practicable following the Closing, but in any event no later than 15 days following the Closing, have (and the Surviving Corporation shall make, by a payroll payment through maintain) sufficient liquid funds to satisfy the CompanySurviving Corporation’s or Merger Sub’s payroll provider and subject obligations to withholding, if any, as described in the holders of Company Options pursuant to this Section 2.5 to each holder of Vested Company Options, such holder’s Option Payment2.3.

Treatment of Options. Immediately prior Each option granted pursuant to the Effective Time, Company Plans (each option to purchase Shares (each, a “Company Option”) (other than Company Options granted under any stock option or other equity or equity-based plan of the Company, including the 2007 Equity 1993 and Incentive Plan, as amended and restated effective as of June 11, 2013 (the “1994 Company Equity Plans”), ) that is unexpired outstanding and unexercised and vested immediately prior to the Effective Time Offer Closing (a “Vested Company Option”whether vested or unvested) (or portion thereof), shall be cancelled and, in exchange therefor, each former canceled without any action on the part of any holder of any such cancelled Vested Company Option shall be entitled in consideration for the right to receive, in consideration of as promptly as reasonably practicable following the cancellation of such Vested Company Option and in settlement thereforOffer Closing, a cash payment in cash (subject to any applicable withholding or other Taxes required by applicable Law) of an amount with respect thereto equal to the product of (iA) the total number of Shares shares of Company Common Stock subject to such Vested Company Option as of immediately prior to such cancellation the Offer Closing and (iiB) the excess, if any, of the Merger Consideration Offer Price over the exercise price per Share share of Company Common Stock subject to such Vested Company Option, less any required withholding Taxes. Each Company Option granted under the 1993 and 1994 Company Plans that is outstanding and unexercised immediately prior to such cancellation the Effective Time (such amounts payable hereunder being referred to as whether vested or unvested) shall be cancelled without any action on the “Option Payments”). No part of the holder of a Vested such Company Option thatin consideration for the right to receive, immediately after the Effective Time, cash payment with respect thereto equal to the product of (A) the number of shares of Company Common Stock subject to such Company Option as of immediately prior to such cancellationthe Effective Time and (B) the excess, has an if any, of the Offer Price over the exercise price per Share share of Company Common Stock subject to such Company Option, less any required withholding Taxes (each payment under this Section 3.3(a), an “Option Cash Payment,” and the sum of all such payments, the “Total Option Cash Payments”). Notwithstanding the foregoing, any Company Option held by a Person that is equal subject to or greater than the Merger Consideration a Support Agreement shall be entitled treated in the manner agreed between the parties to any payment the applicable Support Agreement. As of the Offer Closing (and with respect to such cancelled Vested the Company Option. From Options granted under the 1993 and after 1994 Company Plans, the Effective Time), each Vested Company Option Options shall no longer be exercisable by outstanding and shall automatically terminate and cease to exist, and each holder of a Company Option shall cease to have any rights with respect thereto, except the former holder thereof, but shall only entitle such holder right to the payment of receive the Option Cash Payment, if any. On or as As soon as reasonably practicable following the Closingdate of this Agreement, but and in any event no later than 15 days following prior to the Closingexpiration of the Offer, the Surviving Corporation Company shall make, by a payroll payment through take the Company’s or Merger Sub’s payroll provider and subject actions necessary to withholding, if any, as described in effectuate this Section 2.5 to each holder of Vested Company Options, such holder’s Option Payment3.3(a).

Treatment of Options. Immediately Prior to the Closing, Sellers shall provide each Option Holder holding Vested Options with notice and a reasonable opportunity to exercise, in full or in part, any and all Vested Options held by such Option Holder no later than six (6) Business Days prior to the Effective TimeClosing, each option in accordance with the respective terms and conditions applicable to purchase Shares (each, a “Company Option”) under any stock option or other equity or equity-based plan of the Company, including the 2007 Equity such Vested Option and Incentive Plan, as amended and restated effective as of June 11, 2013 (the “Company Equity Plans”), that is unexpired and unexercised and vested immediately prior subject to the Effective Time (a “Vested Company Option”) (or portion thereof), shall be cancelled and, terms and conditions set forth in exchange therefor, each former holder of any this Purchase Agreement. Any Shares issued upon such cancelled Vested Company Option shall be entitled to receive, in consideration of the cancellation exercise of such Vested Company Option and in settlement therefor, Options shall form a payment in cash (subject to any applicable withholding or other Taxes required by applicable Law) part of an amount equal to the product of (i) the total number of Sale Shares subject to such Option Holder executing and delivering to Buyer a Joinder in accordance with the terms of this Purchase Agreement. Sellers agree to update Annexes A and B to reflect any such exercise of Vested Company Option immediately Options at least six (6) Business Days prior to such cancellation the Closing. No later than six (6) Business Days prior to the Closing, with respect to each Option Holder of any Vested Option that remains outstanding and unexercised as of six (6) business days prior to the Closing, Sellers shall deliver to the Buyer on the Closing Date either (i) an amendment (the “Vested Option Agreement Amendment”) in the form set forth in Annex P or (ii) a termination, release and waiver (the excess“Vested Option Termination”) in the form set forth on Annex O, if any, in each case executed and delivered by each such Option Holder. All outstanding and unexercised Vested Options as of the Merger Consideration over the exercise price per Share subject to such Vested Company Closing Date in respect of which any Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of Holder delivered a Vested Company Option thatTermination shall, by virtue of the Closing, be cancelled and terminated effective as of immediately prior the Closing without payment to such cancellation, has an exercise price per Share that is equal Option Holder. All outstanding and unexercised Vested Options as of the Closing Date in respect of which any Option Holder delivered a duly executed Vested Option Agreement Amendment and a Joinder shall continue to or greater than the Merger Consideration shall be entitled to any payment with respect to such cancelled Vested Company Option. From of force and effect after the Effective Time, each Closing until exercised or cancelled in accordance with their respective terms. In no event shall Vested Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to the payment Options representing more than 1.5% of the Option Payment, if any. On or as soon as practicable following the Closing, but in any event no later than 15 days following the Closing, the Surviving Corporation shall make, by a payroll payment through the Company’s or Merger Sub’s payroll provider and subject number of outstanding Shares (assuming all Vested Options had been exercised) be amended pursuant to withholding, if any, as described in this Section 2.5 to each holder of Vested Company Options, such holder’s Option Payment2.2(a)(i).

Treatment of Options. (i) Upon the terms and subject to the conditions set forth herein, at the Effective Time, by virtue of the Merger and without any action on the part of any party hereto, any Company Optionholder or any other Person, each Company Option that is outstanding and unexercised as of immediately prior to the Effective Time shall, whether or not vested, become fully vested and exercisable. Parent, Merger Sub and the Surviving Corporation shall not assume any of the outstanding Company Options and shall not substitute similar (or any) options for the Company Options. Immediately following the Effective Time of the Merger, no holder of Company Options shall have any right thereunder to acquire any capital stock of Acquirer, Merger Sub or the Surviving Corporation. The Company shall give written notice (the form and substance of which shall be subject to review and approval of Acquirer) (the “Notice to Optionholders”) to the holders of all Company Options which shall offer each holder of a Company Option the right to waive his or her right to exercise his or her Company Option(s) and, prior to the Effective Time of the Merger, elect in writing to participate in the Deemed Option Exercise Program described below; provided that the holder’s election in writing (the “Election Notice”) is made on the form included with the Notice to Optionholders and delivered to the Company prior to the Effective Time of the Merger. In the event that a holder of Company Options fails to exercise its Company Options and fails to elect in writing to participate in the Deemed Option Exercise Program, then, at the Effective Time, such Company Option shall terminate and have no further force and effect. Under the “Deemed Option Exercise Program”, each Company Option that is vested and unexercised (including Company Options that vest as a result of the Merger) immediately prior to the Effective Time of the Merger (the “Program Conversion Date”) and for which an Election Notice has been given shall be deemed exercised by the applicable holder of such Company Option without any further action taken by such holder and shall be converted automatically into the right to receive, subject to the terms of this Article I, (the “Option Cashout Consideration”) the Cash Consideration and Stock Consideration to which the holder thereof would have been entitled pursuant to Section 1.3(a) had such Company Option been exercised prior to the Effective Time, each option less the aggregate exercise price that such holder would have paid to purchase Shares exercise such Company Option (each, a “Company Option”) under any stock option or other equity or equity-based plan allocated between cash and Acquirer Common Stock consistent with the ratio of the Company, including value of the 2007 Equity Gross Cash Consideration and Incentive Plan, as amended and restated effective as of June 11, 2013 (the “Company Equity Plans”Gross Stock Consideration), that is unexpired subject to applicable Tax withholding as described in Section 1.8. (ii) The Company shall use commercially reasonable efforts to obtain and unexercised and vested immediately deliver to Acquirer, at or prior to the Effective Time (Closing, an Election Notice, executed by each Person who holds a “Vested Company Option”) (or portion thereof), shall be cancelled and, in exchange therefor, each former holder of any such cancelled Vested Company Option shall be entitled to receive, in consideration of the cancellation of such Vested Company 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 product of (i) the total number of Shares subject to such Vested Company Option immediately prior to such cancellation and (ii) before the excess, if any, Effective Time of the Merger Consideration over the exercise price per Share subject Merger. (iii) Prior to such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of a Vested Company Option that, as of immediately prior to such cancellation, has an exercise price per Share that is equal to or greater than the Merger Consideration shall be entitled to any payment with respect to such cancelled Vested Company Option. From and after the Effective Time, each Vested Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to the payment of the Option Payment, if any. On or as soon as practicable following the Closing, but in any event no later than 15 days following the Closing, the Surviving Corporation Company shall make, by a payroll payment through take all actions necessary to terminate the Company’s or Merger Sub’s payroll provider and subject to withholding, if any, as described in Section 2.5 to each holder of Vested Company OptionsOption Plan, such holder’s Option Paymenttermination to be effective at or before the Closing.

Treatment of Options. Immediately prior (a) The Purchaser will not assume any Options. (b) On the terms and subject to the Effective Timeconditions set forth in this Agreement, by virtue of the Completion and without any further action on the part of any holder of an Option or any other Person, each option to purchase Shares (each, a “Company Option”) under any stock option or other equity or equity-based plan validly granted award of the Company, including the 2007 Equity and Incentive Plan, as amended and restated effective as of June 11, 2013 (the “Company Equity Plans”), that is unexpired and unexercised and vested an Option outstanding immediately prior to the Effective Time (a “Vested Company Option”) (or portion thereof), Completion shall be cancelled andand automatically converted into the right to receive the Per Option Consideration. As soon as practicable following the Completion, in exchange therefor, the Purchaser will procure that the Company shall pay to each former holder of any such cancelled Vested Company Option shall be entitled to receive, in consideration of the cancellation of such Vested Company 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 product of (i) the total number of Shares subject to such Vested Company Option immediately prior to such cancellation and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share subject to such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of a Vested Company Option thatthe Per Option Consideration (if any) required to be paid to any such holder pursuant to this Clause 2.4.3(b). For the avoidance of doubt, as of immediately prior to such cancellation, any Vested Option that has an a per Share exercise price per Share that is equal to or greater than the Merger Per Share Consideration automatically will be cancelled and extinguished at the Completion, without any payment of any consideration therefor. (c) On the terms and subject to the conditions set forth in this Agreement, and subject to any written Contract between a holder of Options and the Company Disclosed to Purchaser prior to the Signing Date, by virtue of the Completion and without any further action on the part of any holder of Unvested Options or any other Person, at the Completion, each validly granted award of an Unvested Option outstanding immediately prior to the Completion shall be entitled to any payment with respect to such cancelled Vested Company Option. From automatically converted, when and after the Effective Time, each Vested Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to the payment extent such Unvested Option vests pursuant to the terms and conditions of the Option PaymentPlan, if anyinto the right to receive the Per Option Consideration, provided however, that if, prior to the 1st anniversary of the Completion Date, such holder terminates its service with the Company (other than involuntary on a Good Leaver basis or voluntary with Good Reason as such terms are defined in the Option Plan), then all Options held by such holder outstanding at the time such holder terminates its service shall automatically and immediately become null and void, and no payment of any consideration shall be made with respect thereto. On or as As soon as practicable following the Closing, but in any event no later than 15 days following 1st anniversary of the ClosingCompletion Date, the Surviving Corporation Purchaser will procure that the Company shall make, by a payroll payment through the Company’s or Merger Sub’s payroll provider and subject to withholding, if any, as described in Section 2.5 pay to each holder of Vested an Unvested Option that has not terminated its service as described above prior to the 1st anniversary of the Completion Date, the Per Option Consideration (if any) required to be paid to any such holder pursuant to this Clause 2.4.3(c). In the event a holder of an Unvested Options terminates its service with the Company Optionsprior to the 1st anniversary of the Completion Date involuntary on a Good Leaver basis or voluntary for Good Reason, the Purchaser will procure that the Company shall pay to such holder’s holder of an Unvested Option Paymentthe Per Option Consideration at such time his or her service is terminated. (d) On the terms and subject to the conditions set forth in this Agreement, by virtue of the Completion, each Repriced Option and Designated Promised Option shall be cancelled without any consideration. (e) Prior to the Completion, the Company and the Sellers shall take all actions reasonably necessary to effect the transactions contemplated by this Clause 2.4.

Treatment of Options. Immediately (a) Prior to the Effective Time, the Company shall, subject to and conditioned upon the Closing, take all necessary action, which action will be effective as of the Effective Time, to: (i) terminate the Stock Option Plan and all Option Agreements; and (ii) cancel each Option (whether vested or unvested), but excluding, for the avoidance of doubt, any Options exercised prior to the Effective Time. (b) With respect to any unvested Option, each option to purchase Shares such Option shall be canceled and terminated at the Effective Time for no consideration, and the Option Holder holding such unvested Option shall have no further rights in respect thereof. (each, a c) The Company shall send written notice of the transactions contemplated hereby (an “Company OptionOption Notice”) to each Option Holder holding vested Options (including those Options that would vest in connection with the transactions contemplated by this Agreement) (“Vested Options”) at least six (6) days prior to the Closing Date in accordance with the Stock Option Plan and the applicable Option Agreement. The Option Notice shall offer the applicable Option Holder, upon the entry into a general release of claims and any other documentation provided for under the Stock Option Plan and the applicable Option Agreement, the opportunity to exercise his or her Vested Options in connection with, and conditioned upon the occurrence of, the Closing. If any stock option such Option Holder elects to exercise his or other equity or equity-based plan her Vested Options in accordance with the terms of the CompanyOption Notice (such Option Holder, including the 2007 Equity and Incentive Plan, as amended and restated effective as of June 11, 2013 (the an “Company Equity PlansExercising Option Holder”), that is unexpired such Vested Options shall be exercised, conditioned upon the occurrence of the Closing, and unexercised and vested the Company shall issue to such Option Holder such number of shares of Company Common Stock for which such Vested Options are exercised immediately prior to the Effective Time (a the “Vested Company OptionExercised Option Shares”) (or portion thereof), and from and after such time such Option Holder shall be deemed to be a holder of Company Common Stock hereunder; provided, that, all payments with respect to Company Common Stock held pursuant to such exercise shall be made as provided in Section 2.7(e). The Vested Options formerly held by such Option Holder shall terminate upon such exercise. (d) To the extent any Option Holder fails to elect to exercise his or her Vested Options in accordance with the terms of the Option Notice, such unexercised Vested Options shall be canceled and terminated at the Effective Time for no consideration, in accordance with the Stock Option Plan and the applicable Option Agreement, and the Option Holder holding such unexercised Vested Options shall have no further rights in respect thereof. (e) With respect to any Exercised Option Shares, such Exercised Option Shares shall be cancelled andand terminated at the Effective Time, in exchange therefor, each former holder of any such cancelled Vested Company and the Exercising Option Holder thereof shall be entitled to receive, in consideration of the cancellation of such Vested Company Option and in settlement therefor, a payment : (i) an amount in cash equal to (subject to any applicable withholding or other Taxes required A) the Cash Amount, multiplied by applicable Law(B) the number of an amount Exercised Option Shares (the “Exercised Option Shares Cash Consideration”); (ii) a number of shares of PubCo Common Stock equal to the product Stock Amount, multiplied by the number of Exercised Option Shares (the “Exercised Option Shares Stock Consideration”); and (iii) a contingent right to a portion of the Escrow Amount, Administrative Expense Amount, any additional consideration received pursuant to Section 2.12, any Bonus Repayment Amount and any amounts payable pursuant to the Tax Receivables Agreement (clauses (i) the total number of Shares subject to such Vested Company Option immediately prior to such cancellation and through (iiiii) the excesscollectively, if any, of the Merger Consideration over the exercise price per Share subject to such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Exercised Option PaymentsShares Consideration”). No holder of a Vested , in each case payable, without interest, to the applicable Exercising Option Holder in accordance with Section 2.10; provided, however, that the Company Option that, as of immediately prior to such cancellation, has an exercise price per Share that is equal to or greater than the Merger Consideration shall be entitled to any payment with respect to such cancelled Vested Company Option. From and after the Effective Time, each Vested Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to will offset against the payment of the Exercised Option PaymentShares Cash Consideration the aggregate exercise price per share of Company Common Stock issuable under the Option with respect to the Exercised Option Shares received. Payment pursuant to this Section 2.7(e) shall constitute the sole consideration payable in respect of the Exercised Option Shares, if any. On or as soon as practicable following the Closing, but and no consideration shall be paid in respect of any event no later than 15 days following the Closing, the Surviving Corporation shall make, by a payroll payment through the Company’s or Merger Sub’s payroll provider and subject to withholding, if any, as described in Section 2.5 to each holder of Vested Company other Options, such holder’s Option Payment.

Treatment of Options. Immediately prior to In further consideration of the covenants and agreements contained herein as of the Effective TimeDate, each option the Company agrees that Panzo's right to exercise all options to purchase Shares (each, a “Company Option”) under any stock option or other equity or equity-based plan shares of the Company's common stock of which Panzo is the beneficial owner is fully vested as of the Effective Date. This includes options to purchase 1,020,000 shares of the Company's common stock, including issued subject to the 2007 Equity terms of Non-Plan Option No. 2001-1, options to purchase 250,000 shares of the Company's common stock, issued subject to the terms of Plan Option No. 2001-6 and Incentive Planoptions to purchase 24,000 shares of the Company's common stock (assumed from Net Value, Inc.), issued subject to the terms of a Non-Qualified Stock Option Agreement of Net Value, Inc. dated December 4, 1999 (collectively, the "Options"). The Options shall continue to remain in full force and effect for the specified term thereof, subject to the respective terms of each applicable option instrument, as amended if the Employment Agreement had been terminated by the Company other than For Cause. Furthermore, as soon as practicable after the Effective Date of this Agreement the Company shall file and restated cause to become effective as a registration statement on Form S-8 with the Securities and Exchange Commission covering resale of June 11, 2013 the shares of the Company's common stock issuable by the Company upon exercise of the Options (the “"Registration Statement"). The Company Equity Plans”)agrees to maintain the Registration Statement in effect at all times during which the Options remain outstanding. Furthermore, if Panzo seeks to exercise one or more Options and at that time the Registration Statement is unexpired not effective such that the shares of common stock issued upon such exercise are not immediately freely tradable, (i) Panzo shall be permitted to exercise such Options or Options via a cashless exercise method, and unexercised and vested immediately prior any provision in the Option which otherwise provided only the "Option Administrator" the discretion to the Effective Time (a “Vested Company Option”) (or portion thereof)permit cashless exercise, shall be cancelled andmodified so as to permit Panzo the discretion to elect a cashless method of exercise, in exchange therefor, each former holder of any such cancelled Vested Company Option shall be entitled to receive, in consideration of the cancellation of such Vested Company 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 product of (i) the total number of Shares subject to such Vested Company Option immediately prior to such cancellation and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share subject to all restrictions on resale under Section 6.1 below shall be suspended until such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to time as the “Option Payments”). No holder of a Vested Company Option that, as of immediately prior to such cancellation, has an exercise price per Share that Registration Statement is equal to or greater than the Merger Consideration shall be entitled to any payment with respect to such cancelled Vested Company Option. From and after the Effective Time, each Vested Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to the payment of the Option Payment, if any. On or as soon as practicable following the Closing, but in any event no later than 15 days following the Closing, the Surviving Corporation shall make, by a payroll payment through the Company’s or Merger Sub’s payroll provider and subject to withholding, if any, as described in Section 2.5 to each holder of Vested Company Options, such holder’s Option Paymenteffective again.

Treatment of Options. Immediately prior (a) Subject to the Effective Timethis Section 2.3, each option to purchase Shares Option that is vested and exercisable at the Closing (each, a whether in accordance with the terms of the applicable Option Agreement or at the discretion of the Company’s board of directors) with an exercise price less than the Closing Date Per Share Merger Consideration (an “Company In-the-Money Vested Option”) under shall be deemed exercised, cancelled and converted as of the Effective Time of Merger I without any stock option future liability to Parent (other than as specifically set forth in Section 2.6), the Company, the Surviving Company or any other equity Person after the Effective Time of Merger I, into the right to receive from the Surviving Company the Option Cancellation Payment (including the Deferred Cash Option Cancellation Payment), subject to adjustments following the Closing as specified in this Agreement (including release of amounts held in the Escrow Account or equity-based plan the Stockholders’ Representative Expense Fund). (b) The shares with respect to the Options that shall not become vested (i.e., to the extent not vested in accordance with the applicable Option Agreement or at the discretion of the Company, including the 2007 Equity and Incentive Plan, as amended and restated effective as ’s board of June 11, 2013 (the “Company Equity Plans”), that is unexpired and unexercised and vested directors) shall immediately prior to the Effective Time of Merger I automatically be extinguished and cancelled without the right to receive any consideration (a “Vested Company Option”) (or portion thereof), shall be cancelled and, in exchange therefor, each former holder of any such cancelled Vested Company Option shall be entitled to receive, in consideration of the cancellation of such Vested Company Option and in settlement therefor, a with no payment in cash (subject to any applicable withholding or other Taxes required by applicable Law) of an amount equal to the product of (i) the total number of Shares subject to such Vested Company Option immediately prior to such cancellation and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share subject to such Vested Company Option immediately prior to such cancellation (such amounts payable being made hereunder being referred to as the “Option Payments”with respect thereto). No holder of a Vested Company Option that, as of immediately prior to such cancellation, has Options with an exercise price per Share that is equal to or greater than exceeds the Closing Date Per Share Merger Consideration shall immediately prior to the Effective Time of Merger I, to the extent not exercised by the holder thereof prior to the Effective Time of Merger I in accordance with the terms of the Incentive Plan, automatically be extinguished and cancelled without the right to receive any consideration (with no payment being made hereunder with respect thereto). As a condition to the receipt of the foregoing consideration provided in this Section 2.3, each holder of an In-the-Money Vested Option shall agree and acknowledge in an option surrender form substantially in the form of Exhibit F hereto (the “Option Surrender Form”), with such modifications as may be necessary, in each case, in a manner reasonably acceptable to each of Parent and the Company, that such holder (each holder, a “Tendering Optionholder”) (A) approves of this Agreement (including the liabilities of such Tendering Optionholder set forth in this Agreement), the Escrow Agreement, the other Transaction Documents and all of the arrangements relating thereto, (B) approves the appointment of the Stockholders’ Representative in accordance with the terms of this Agreement, (C) represents and warrants that it is the owner of all such In-the-Money Vested Options free and clear of all Encumbrances and (D) acknowledges that such Optionholder’s portion of the Option Cancellation Payment constitutes all of the consideration such Optionholder is entitled to any payment receive with respect to the In-the-Money Vested Options held by such cancelled Vested Tendering Optionholder, subject to adjustments following the Closing as specified in this Agreement (including release of amounts held in the Escrow Account or the Stockholders’ Representative Expense Fund). (c) Without limiting the foregoing, the Company Option. From shall take all actions necessary to terminate the Incentive Plans as of the Effective Time of Merger I and to ensure that neither the Company nor its Subsidiaries will, at the Effective Time of Merger I, be bound by any options, stock appreciation rights, warrants, restricted stock rights, restricted stock units, phantom equity awards or other rights or agreements which would entitle any Person, other than Parent and its Subsidiaries, to own any equity interests in the Newco or the Surviving Company or to receive any payment in respect thereof. (d) With respect to each Optionholder who shall not have delivered to the Company an Option Surrender Form prior to the Closing Date but does so within one hundred eighty (180) days after the Effective TimeClosing Date, each Vested Parent shall direct the Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle to pay to such holder Optionholder (promptly following such Tendering Optionholder’s delivery to the payment Company of a duly executed and completed Option Surrender Form) such Optionholder’s Initial Cash Option Cancellation Payment (and in the case of any Select Employee Optionholder or Remaining Optionholder, Parent shall direct the Company to pay to such Select Employee Optionholder or Remaining Optionholder the applicable Initial Cash Option Cancellation Payment, the applicable Deferred Cash Option Cancellation Payment, and issue the applicable Stock Option Cancellation Payment) such Optionholder would otherwise be entitled pursuant to this Agreement, without any interest thereon (other than with respect to the Deferred Cash Option Cancellation Payment), subject to any subsequent adjustments thereto, had such Option Surrender Form had been delivered on or prior to the Closing Date; provided, however, that, for the avoidance of doubt, all of any such Tendering Optionholder’s Options shall be cancelled as of the Effective Time of Merger I regardless of whether such Tendering Optionholder delivers to the Company an Option Payment, if any. On or as soon as practicable following the Closing, but in any event no later than 15 days following the Closing, the Surviving Corporation shall make, by a payroll payment through the Company’s or Merger Sub’s payroll provider and subject to withholding, if any, as described in Section 2.5 to each holder of Vested Company Options, such holder’s Option PaymentSurrender Form.

Treatment of Options. Immediately prior to the Effective Time, each option to purchase Shares (each, a “Company Option”) under any stock option or other equity or equity-based plan of the Company, including the 2007 Equity Amended and Restated ReachLocal, Inc. 2008 Stock Incentive Plan, as amended and restated effective as of June 11the ReachLocal, 2013 Inc. Director Stock Plan, the ReachLocal, Inc. 2004 Stock Plan, or any other plan, agreement or arrangement (the “Company Equity Plans”), that is unexpired and unexercised and vested immediately prior to the Effective Time (a “Vested Company Option”) (Time, whether or portion thereof)not vested, shall be cancelled and, in exchange therefor, each former holder of any such cancelled Vested Company Option shall be entitled to receive, in consideration of the cancellation of such Vested Company Option and in settlement therefor, a payment in cash (subject to any applicable withholding or other Taxes required by applicable Lawas provided in Section 2.6) of an amount equal to the product of (i) the total number of Shares subject to such Vested Company Option immediately prior to such cancellation and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share subject to such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of a Vested Company Option that, as of immediately prior to such cancellation, that has an exercise price per Share that is equal to or greater than the Merger Consideration shall be entitled to any payment with respect to such cancelled Vested Company Option. From and after the Effective Time, each Vested Company Option shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to the payment of the Option Payment, if any. On or as soon as practicable following the Closing, but in any event no later than 15 fifteen (15) days following the Closing, (i) the Surviving Corporation shall make, by a payroll payment pay or cause to be paid through the Company’s its or Merger Suban Affiliate’s payroll provider system and subject to withholding, if any, as described in Section 2.5 2.6 to each holder of Vested one or more Company OptionsOptions who is a current or former employee of the Company, such holder’s Option PaymentPayment and (ii) the Surviving Corporation shall make, or cause to be made, the payment of the Option Payment to each holder of one or more Company Options who is not a current or former employee of the Company.

Treatment of Options. Immediately prior to At the Effective Time, each unexpired and unexercised option to purchase Common Shares (eachthe ‘‘Company Options’’), a “Company Option”) under any stock option or other equity or equity-based plan of the Company, including the 2007 Equity Amended and Restated 1998 Incentive and Non-Qualified Stock Plan, as amended the 2009 Stock Incentive Plan and restated effective as of June 11any other similar plan, 2013 agreement or arrangement (the “‘‘Company Equity Stock Option Plans”’’), that is unexpired and unexercised and vested immediately prior to the Effective Time (a “Vested Company Option”) (whether or portion thereof)not then exercisable or vested, shall be cancelled andfully vested and automatically (and without any action on the part of the holder thereof) be cancelled, cease to exist and no longer be exercisable or outstanding, and in exchange therefor, each former holder of any such cancelled Vested Company Option shall be entitled converted into a vested right (the ‘‘Right’’) entitling the holder thereof to receivereceive from the Surviving Corporation on the date of the first regularly-scheduled payroll run following the Effective Time, but in any event no later than seven (7) calendar days after the Effective Time, (and through the Surviving Corporation’s payroll system with respect to Company Options issued in respect of a grantee’s employment), in consideration of the cancellation of such Vested Company Option and in settlement therefor, a payment in cash (subject to any applicable withholding or other Taxes required by applicable LawLaw to be withheld in accordance with Section 2.2(e) (‘‘Withholding Rights’’)) of an amount equal to the product of (ix) the total number of Common Shares subject to such Vested Company Option as of immediately prior to such cancellation the Effective Time and (iiy) the excess, if any, of the Common Share Merger Consideration over the exercise price per Common Share subject to such Vested Company Option immediately prior to such cancellation (such amounts payable hereunder being referred to as the “Option Payments”). No holder of a Vested Company Option that, as of immediately prior to such cancellationthe Effective Time; provided, has an however, that if the exercise price per Common Share that of any such Company Option is equal to or greater than the Common Share Merger Consideration Consideration, such Company Stock Option shall be entitled cancelled without any cash payment being made in respect thereof (collectively, the ‘‘Stock Option Payment’’). Prior to the Effective Time, the Company shall take all actions reasonably necessary (including amending the Company’s Stock Option Plans) to effectuate the provisions of this Section 2.3 to the extent permitted by the terms of the Company’s Stock Option Plans and any payment with respect to such cancelled Vested agreements governing the terms of any Company Option. From Parent shall at all times from and after the Effective Time, each Vested Company Option shall no longer be exercisable by Time cause the former holder thereof, but shall only entitle such holder Surviving Corporation to the payment of the Option Payment, if any. On or as soon as practicable following the Closing, but in any event no later than 15 days following the Closing, have (and the Surviving Corporation shall make, by a payroll payment through maintain) sufficient liquid funds to satisfy the CompanySurviving Corporation’s or Merger Sub’s payroll provider and subject obligations to withholding, if any, as described in the holders of Company Options pursuant to this Section 2.5 to each holder of Vested Company Options, such holder’s Option Payment2.3.

Treatment of Options. Immediately prior to the Effective Time(i) No Option will be continued, each option to purchase Shares (each, a “Company Option”) under any stock option assumed or other equity or equity-based plan of substituted by the Company, including Surviving Corporation or Parent at the 2007 Equity and Incentive Plan, Effective Time as amended and restated effective as part of June 11, 2013 (the “Company Equity Plans”), that is unexpired and Merger. Each unexercised and vested Option outstanding immediately prior to the Effective Time (a “Vested Company Option”) (or portion thereof), will no longer be exercisable and shall be cancelled and, without any payment therefor except as otherwise provided in exchange thereforthis Agreement. At the Effective Time, each former holder of any such cancelled Vested Company Option shall be entitled to receive, in consideration of the cancellation of such Vested Company Option that is outstanding 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 product of (i) the total number of Shares subject to such Vested Company Option unexercised immediately prior to such cancellation the Effective Time shall fully vest and be automatically cancelled, without any future liability to Parent, the Surviving Corporation, the Company or any other Person after the Closing, and converted automatically into the Optionholder’s right to receive an amount in cash, without interest, equal to (iix) (i) the excess, if any, of (A) the Per Share Merger Consideration payable in respect of the shares of Common Stock underlying such Option over (B) the exercise price per Share of such Option, multiplied by (ii) the number of vested shares of Common Stock issuable pursuant to such Option as of the Closing (the “Per Option Cancellation Payment”), and (y) any Additional Per Option Cancellation Payment, in each case of (x) and (y), upon the terms and subject to such Vested Company Option immediately prior the conditions set forth in this Agreement and less all applicable withholding Taxes and subject to such cancellation reduction for any other amounts that are required or have been authorized by the Eligible Optionholder to be withheld (such amounts payable hereunder being referred for example, as contributions to as the “Option Payments”a 401(k) plan). No holder of a Vested Company Option that, as of immediately prior to such cancellation, has an exercise price per Share that is equal to or greater than the Merger Consideration Optionholder shall be entitled to receive payment of his, her or its Per Option Cancellation Payment or any payment with respect of his, her or its Additional Per Option Cancellation Payments unless such Optionholder has delivered to the Company prior to the Effective Time a fully executed and completed Omnibus Option Cancellation and Release Agreement, in substantially the form attached hereto as Exhibit D (the “Omnibus Option Cancellation and Release Agreement”), pursuant to which such cancelled Vested Company Option. From and after Optionholder shall acknowledge the cancellation of all of his, her or its Options, effective as of the Effective Time, each Vested Company in exchange for his, her or its Per Option shall no longer be exercisable by the former holder thereofCancellation Payment and any Additional Per Option Cancellation Payment, but shall only entitle such holder subject to the payment of the Option Payment, if anyterms and conditions hereof and thereof. On or as soon as practicable following the Closing, but in any event no later than 15 days following Prior to the Closing, the Company shall deliver to each Optionholder their respective Omnibus Option Cancellation and Release Agreement for execution and return to the Company prior to the Effective Time. The Equity Incentive Plan shall terminate as of the Effective Time, no holder of Options issued pursuant to the Equity Incentive Plan or any participant in the Equity Incentive Plan shall have any further rights thereunder, and all award agreements under the Equity Incentive Plan shall terminate immediately prior to the Effective Time. Prior to the Effective Time, the Company shall take any and all action necessary or appropriate under the Equity Incentive Plan or otherwise to give effect to this Section 2.6(d) and ensure that none of Parent, the Surviving Corporation or the Company will, as of the Effective Time, be bound by any provisions of the Equity Incentive Plan or otherwise for the issuance or grant of any interest in respect of shares of Company Capital Stock or other rights in respect of the equity securities of any Company Entity, except the right to receive the applicable Per Option Cancellation Payments and any Additional Per Option Cancellation Payments contemplated by this Section 2.6(d). (ii) All payments to be made under this Agreement in respect of Options, whether at or after the Closing, shall make, by a payroll payment be processed in accordance with the Allocation Schedule and the terms of this Agreement through the CompanySurviving Corporation’s or Merger Subpayroll, and paid to Eligible Optionholders without interest and in accordance with applicable Law and the Surviving Corporation’s customary payroll provider practices and shall, for the avoidance of doubt, be subject to Section 2.12 and subject to withholdingdeductions for any other amounts that are required or have been authorized by the Eligible Optionholder to be withheld. All such amounts so withheld shall be treated for all purposes of this Agreement as having been paid to the Eligible Optionholder in respect of which such deduction and withholding was made. Notwithstanding anything in this Agreement to the contrary, if anyno Additional Per Option Cancellation Payments shall be paid, as described and no Optionholder shall be entitled to receive any Additional Per Option Cancellation Payments, after the five (5) year anniversary of the Effective Time unless such payment would not result in a failure to comply with Section 2.5 to each holder 409A of Vested Company Options, such holder’s Option Paymentthe Code.