Common use of Stock Options Clause in Contracts

Stock Options. As of the Effective Time, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. As of (a) The Company shall take, and Parent shall cooperate with the Company in taking, all steps to amend Company Options so that at the Effective Time, each outstanding, Company Option which is outstanding and unexercised stock immediately prior to the Effective Time shall cease to represent a right to acquire Company Common Stock and shall be converted automatically into an option to purchase Shares shares of Parent common stock (a "Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan"“Parent Common Stock”) and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") Parent shall terminate and be canceled and assume each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option (hereinafter, “Assumed Option, times (b) the number of Eligible Shares (as defined below”) subject to the terms of the stock option plan or program and the agreement pursuant to which such Company Stock Option. Such cash payment shall Assumed Option is outstanding, as such stock option plan, program and/or agreement may be net of any required withholding taxesamended pursuant to Section 6.3(c). Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject shares of Parent Common Stock purchasable upon exercise of such Assumed Option shall be equal to the number of shares of Company Common Stock that were purchasable upon exercise of such option as Assumed Option immediately prior to which such option shall then be vested and exercisable as of the Effective DateTime multiplied by the Exchange Ratio (as defined in Exhibit A), and rounded down to the nearest whole share, and (ii) with respect the per share exercise price under each such Assumed Option shall be adjusted by dividing the per share exercise price under each such Assumed Option by the Exchange Ratio, and rounding up to the nearest cent . In the case of any Company Stock Assumed Option granted under that is an “incentive stock option” (as defined in Section 422 of the TARSOPCode), the Director Plan or the 1997 Planexercise price, the aggregate number of Shares that shall then be subject shares of Parent Common Stock purchasable pursuant to such option. The Company's obligation to make any Assumed Option and the terms and conditions of exercise of such cash payment (1) option shall be subject determined in order to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2comply with Section 424(a) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of the Effective Time, each outstanding, unexercised stock option close of business on the Reference Date: (i) 7,785,062 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Options (as defined below) to purchase Shares Company Common Stock under the applicable Company Benefit Plans that are stock plans as set forth in Section 2.12(b) of the Company Disclosure Schedule (a "the “Company Stock Option"Plans”) issued (equity or other equity-based awards, whether payable in cash, shares or otherwise, granted under or pursuant to the Company Stock Plans, other than Company Restricted Stock or Company Restricted Stock Units, are referred to in this Agreement as “Company Options”), and (ii) 7,748,679 shares of Company Common Stock are reserved for future issuance under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Plans. Company has made available to Parent a true, complete and correct list of each Company Option Plans"outstanding as of the Reference Date, and (1) shall terminate and be canceled and each the particular Company Stock Plan pursuant to which such Company Option was granted, (2) the name of the holder of a such Company Stock Option shall be entitled to receiveOption, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a3) the excessnumber of shares of Company Common Stock subject to such Company Option, if any, of (x4) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b5) the number of Eligible Shares (as defined below) subject to date on which such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall meanOption was granted, (i6) with respect to any Company Stock Option granted under the 1987 Planapplicable vesting schedule, and the number of Shares subject to such option as extent to which such option shall then be Company Option was vested and exercisable as of the Effective Reference Date, and (ii7) with respect the date on which such Company Option expires. All shares of Company Common Stock subject to any Company Stock Option granted issuance under the TARSOPapplicable Company Benefit Plans, upon issuance on the Director terms and conditions specified in the instruments pursuant to which they are issued, are duly authorized and will be validly issued, fully paid and nonassessable. All grants of Company Options were validly issued and properly approved by the Board of Directors of Company (or a duly authorized committee or subcommittee thereof) in material compliance with the terms of the applicable Company Benefit Plan or and all applicable Legal Requirements and recorded on the 1997 Plan, the aggregate number of Shares that shall then be subject to such optionCompany Financials (as defined in Section 2.4(b)) in accordance with GAAP (as defined in Section 2.4(b)). The Company's obligation to make any such cash payment (1) shall be subject to exercise price of each Company Option is not less than the obtaining fair market value of any necessary consents a share of optionees to Company Common Stock as determined on the cancellation date of grant of such Company Stock Options, in form and substance satisfactory Option. Each Company Option intended to Parent, and (2) shall not require any action which violates any qualify as an “incentive stock option” under Section 422 of the Code so qualifies and the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock Option Planson the applicable date of grant. As of the Effective TimeReference Date, each there are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights or equity based awards with respect to Company other than as set forth in Sections 2.2(b) and (c) of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPDisclosure Schedule.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase Shares shares of Company Common Stock (a "Company Stock Option" or, collectively, "Company Stock Options") issued under pursuant to the Company's Amended and Restated 1987 Stock Option Plan stock option plans listed on Schedule 1.10 hereto (the "1987 PlanCompany Plans"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP")whether vested or unvested, the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectivelyshall be cancelled and, the "Company Stock Option Plans") in lieu thereof, Parent shall terminate and be canceled and issue to each holder of a Company Stock Option shall be entitled to receive, in consideration thereforan option (each, a cash payment from "Parent Option"), to acquire, on substantially the Company (which payment shall be made same terms and subject to substantially the same conditions as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of were applicable under such Company Stock Option, times including, without limitation, term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Code, acceleration and termination provisions, the same number of shares of Parent Common Stock as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time, at a price per share equal to (by) the aggregate exercise price for the shares of Company Common Stock otherwise purchasable pursuant to such Company Stock Option divided by (z) the number of Eligible Shares (as defined below) subject full shares of Parent Common Stock deemed purchasable pursuant to such Company Stock Option. Such ; provided, however, that in the case of any option to which Section 421 of the Code applies by reason of its qualification under any of Sections 422 through 424 of the Code, the exercise 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, in order to comply with Section 424 of the Code and provided, further, however, that the number of shares of Parent Common Stock that may be purchased upon exercise of any such Parent Option shall not include any fractional share and, upon exercise of the Parent Option, a cash payment shall be net made for any fractional share based upon the average closing price for Parent Common Stock as reported on the Nasdaq Stock Market (or any subsequent national securities exchange on which shares of any required withholding taxesParent Common Stock are listed for trading) for the five trading days immediately preceding the date of exercise. Notwithstanding Employment with the foregoing, any Director Company shall be credited to the optionees for purposes of determining the number of vested shares of Parent Common Stock subject to exercise under converted Company Options after the Effective Time. None of the Company who is not also an employee of Stock Options that are unvested at the Company may make any payment of any taxes incurred Effective Time shall become vested as a result of receipt the execution and delivery of such cash payment and direct this Agreement or the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as consummation of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPMerger.

Stock Options. As (a) Subsequent to the effectiveness of the Effective TimeForm 10, but prior to the consummation of the Distribution, and subject to the consummation of the Distribution, each outstanding, unexercised stock option to purchase Shares ALTISOURCE Common Stock (a "Company “ALTISOURCE Stock Option"Options”) issued granted and outstanding under the Company's Amended and Restated 1987 Stock 2009 Equity Incentive Plan of ALTISOURCE (“ALTISOURCE Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans"”) shall terminate remain granted and be canceled outstanding and shall not, and ALTISOURCE shall cause (to the maximum extent permitted under the ALTISOURCE Option Plan) the ALTISOURCE Stock Options not to, terminate, accelerate or otherwise vest as a result of the Distribution, and each holder of a Company Stock Option shall thereof immediately prior to the Distribution will be entitled to receivethe following, determined in consideration therefora manner in accordance with, and subject to, the ALTISOURCE Option Plan, FAS123R and Section 409A of the Internal Revenue Code: (i) an option to acquire a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) number of shares of Residential Class B Common Stock equal to the product of (a) the excess, if any, of (x) the Merger Consideration over number of shares of ALTISOURCE Common Stock subject to the ALTISOURCE Stock Option held by such holder on the Distribution Date and (y) the per Share distribution ratio of one (1) share of Residential Class B Common Stock for every three (3) shares of ALTISOURCE Common Stock (the “Residential Stock Options”), with an exercise price to be determined in a manner consistent with this Section 3.04 and (ii) the adjustment of the exercise price of such Company holder’s ALTISOURCE Stock Option, times to be determined in a manner consistent with this Section 3.04 (bthe “Adjusted ALTISOURCE Stock Options”) (the number of Eligible Shares (as defined below) subject to such Company Residential Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding Options and the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Adjusted ALTISOURCE Stock Options, in form and substance satisfactory to Parenttogether, and (2) shall not require any action which violates any of the Company “Post-Distribution Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPOptions”).

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued under pursuant to the Company's Amended and Restated 1987 1988 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted 1990 Stock Option Plan (the "TARSOP")Plan, the 1993 1992 Key Executive Stock Option Plan for Non-Plan, 1993 Employee Directors (the "Director Qualified Stock Purchase Plan") and the , 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan (Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the "1997 Plan") (collectivelyEffective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Stock Option Plans") shall terminate and be canceled and each holder of a ." Each Company Stock Option shall be entitled deemed to receiveconstitute an option to acquire, in consideration therefor, a cash payment from on the Company (which payment shall be made same terms and conditions as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of were applicable under such Company Stock Option, times a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (bx) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Eligible Shares (as defined below) subject otherwise purchasable pursuant to such Company Stock Option. Such cash payment shall be net , multiplied by (ii) the Exchange Ratio; provided, however, that in the case of any required withholding taxes. Notwithstanding the foregoing, any Director option to which Section 421 of the Company who is not also an employee Code applies by reason of its qualification under Section 422 of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct Code ("incentive stock options" or "ISOs" ) the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption price, the number of Shares subject shares purchasable pursuant to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable as determined in order to comply with Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As (i) At the Effective Time, each outstanding option to purchase Company Shares (a "Company Option") under the Company Stock Plans, whether vested or unvested, shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Option (except to the extent such terms and conditions are altered in accordance with their terms as a result of the consummation of the transactions contemplated by this Agreement), the same number of shares of SBC Common Stock as the holder of such Company Option would have been entitled to receive pursuant to the Merger had such holder exercised such Company Option in full immediately prior to the Effective Time (rounded down to the nearest whole number) (a "Substitute Option"), at an exercise price per share (rounded up to the nearest whole cent)(the "Substitute Option Price") equal to (y) the aggregate exercise price for the Company Shares otherwise purchasable pursuant to such Company Option divided by (z) the number of full shares of SBC Common Stock deemed purchasable pursuant to such Company Option in accordance with the foregoing. For each Substitute Option substituted for a Company Option that included a right under certain circumstances to receive dividend equivalents in the form of stock units ("Company Stock Units"), all Company Stock Units credited to the account of the holder of such Substitute Option at the Effective Time shall, as of the Effective Time, be deemed to constitute a number of stock units, each outstanding, unexercised stock option to purchase Shares of which shall represent one share of SBC Common Stock (a "Company SBC Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 PlanUnits"), equal to the 1989 number of shares of SBC Common Stock the holder of such Substitute Option would have been entitled to receive pursuant to this Agreement had such Company Stock Units been distributed to such holder in full immediately prior to the Effective Time Accelerated Restricted and thereafter SBC Stock Units shall continue to be credited to the account of the holder of such Substitute Option Plan to the same extent and on the same terms and conditions as they would have under the Company Option for which the Substitute Option was substituted (except that the "TARSOP"record dates and dividend amounts shall be the record dates and dividend amounts for SBC Common Stock), and all such SBC Stock Units shall be distributed at the 1993 same times and in the same manner as the Company Stock Units would have been distributed had the Substitute Option Plan not been substituted for Non-Employee Directors the Company Option (except that the "Director Plan") and option price used to determine if the 1997 SBC Stock Units can be distributed shall be the Substitute Option Plan (Price). At or prior to the "1997 Plan") (collectivelyEffective Time, the "Company shall make all necessary arrangements with respect to the Company Stock Option Plans") shall terminate Plans to permit the assumption of the unexercised Company Options by SBC pursuant to this Section and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal Time SBC shall use its best efforts to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted register under the 1987 Plan, Securities Act on Form S-8 or other appropriate form (and use its best efforts to maintain the number effectiveness thereof) shares of Shares subject SBC Common Stock issuable pursuant to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock all Substitute Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase Shares (a "each “Company Stock Option"” and, collectively, “Company Stock Options”) issued under pursuant to the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the ’s 1997 Stock Option Plan (or any other agreement or arrangement, whether vested or unvested, shall be converted as of the "1997 Plan") (collectively, the "Effective Time into options to purchase shares of Parent Common Stock in accordance with this Section 2.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued are referred to collectively as the “Company Plans") shall terminate and be canceled and .” At the Effective Time, each holder of a Company Stock Option shall be entitled deemed to receiveconstitute an option to acquire, on the same terms and conditions (but taking into account any changes thereto, including any acceleration in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product vesting or exercisability of (a) the excess, if any, such option by reason of (x) this Agreement or the Merger Consideration over (yor the transactions or matters contemplated by this Agreement provided for in such option or the applicable plan with respect thereto) the per Share exercise price of as were applicable to such Company Stock Option, times (b) a number of shares of Parent Common Stock equal to the number of Eligible Shares (as defined below) shares of Company Common Stock subject to such Company Stock Option. Such cash payment shall be net Option immediately prior to the Effective Time, multiplied by the Exchange Ratio, rounded down to the nearest whole share, at a price per share of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not Parent Common Stock equal to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect the per share exercise price for the shares of Company Common Stock otherwise purchasable pursuant to any such Company Stock Option granted divided by (ii) the Exchange Ratio, rounded up to the nearest cent; 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 1987 PlanCode (“incentive stock options” or “ISOs”), Parent may cause the option price, the number of Shares subject shares purchasable pursuant to such option and the terms and conditions of exercise of such option to be determined so as to which such option shall then be vested and exercisable as comply with Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of the Effective Time, each outstanding, unexercised stock option to purchase Shares The Company shall (a "Company Stock Option"a) issued under terminate the Company's Amended and Restated 1987 Non-statutory Stock Option Plan (the "1987 Plan"as amended and restated effective as of June 10, 1997, and as subsequently amended), the 1989 Time Accelerated Restricted Amended and Restated 1993 Non-officer Employee Stock Option Plan, 1994 Director Stock Option Plan, and Amended and Restated 1996 Director Stock Plan (the "TARSOP")as amended by Amendment No. 1 effective as of July 9, the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan"2004) (collectively, the "Company Stock Option Plans"), immediately prior to the Effective Time without prejudice to the rights of the holders of options (each, a "Company Stock Option") shall terminate awarded pursuant thereto, (b) following such termination grant no additional options under the Company Stock Plans or permit the receipt of shares of Company Common Stock, and be canceled (c) cause each Company Stock Option that is outstanding immediately prior to the consummation of the Merger to become fully vested and exercisable. Prior to the Effective Time, the Company and Parent will take all actions reasonably necessary to provide that, upon the Effective Time, each holder of a outstanding Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from cancelled automatically and at the Company (which payment Effective Time shall be made as soon as practicable after converted into and constitute the Effective Timeright to receive cash in an amount equal (less any applicable withholding and without interest) equal to the product of (a1) the total number of shares of Company Common Stock subject to such holder's Company Stock Option or Options immediately prior to the Effective Time and (2) the excess, if any, of (x) the Merger Per Share Consideration over (y) the per Share exercise price per share of such Company Common Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option or Options (each, an "Eligible Option"). Such cash No payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) Per Share Consideration with respect to any an Eligible Option shall be made by the Disbursing Agent to the holder of such Eligible Option until receipt by the Disbursing Agent of an option cancellation agreement, in a form mutually and reasonably acceptable to the Company Stock Option granted under the 1987 Planand Parent, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under all Eligible Options owned by the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation holder of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPEligible Option.

Stock Options. As (a) Each option to purchase shares of Company Common Stock that is outstanding at the Effective Time, each outstanding, unexercised stock option to purchase Shares whether or not exercisable and whether or not vested (a "Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), shall, without any action on the 1989 Time Accelerated Restricted Stock Option Plan part of the Company or the holder thereof, be assumed by Parent in such manner that Parent (i) is a corporation "assuming a stock option in a transaction to which Section 424(a) applies" within the "TARSOP"), meaning of Section 424 of the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") Code and the 1997 Stock Option Plan regulations thereunder or (ii) to the "1997 Plan") (collectivelyextent that Section 424 of the Code does not apply to any such Company Option, would be such a corporation were Section 424 of the "Code applicable to such Company Stock Option Plans") shall terminate Option. From and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time, all references to the Company in the Company Options shall be deemed to refer to Parent. The Company Options assumed by Parent shall be exercisable upon the same terms and conditions as under the Company Options (including provisions regarding vesting and the acceleration thereof) except that (i) such Company Options shall entitle the holder to purchase from Parent the number of shares of Parent Common Stock (rounded down to the nearest whole number of such shares) that equals the product of the Conversion Ratio multiplied by the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time, (ii) the option exercise price per share of Parent Common Stock shall be an amount (rounded up to the nearest full cent) equal to the product option exercise price per share of Company Common Stock in effect immediately prior to the Effective Time divided by the Conversion Ratio, and (aiii) the excess, if any, of (x) Company Options shall vest to the Merger Consideration over (y) extent required pursuant to the per Share exercise price current terms of such Company Stock Option, times (b) Options or other agreements as described in Section 1.7 of the number of Eligible Shares Company Disclosure Schedule (as defined below) ); provided that if such vesting of Company Options or other provisions with respect to the Company Options would jeopardize the Merger being accounted for as a "pooling of interests," then the Company shall, subject to Parent's written consent not to be unreasonably withheld, use reasonable best efforts to prevent such vesting or effect of other provisions. Except to the extent required pursuant to the current terms of such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director Options or other agreements as described in Section 1.7 of the Company who is Disclosure Schedule, the Company shall not also an employee take any action to accelerate the vesting of any Company Options. Prior to the Effective Time, the Board of Directors of Parent shall, for purposes of Rule 16b-3(d)(1) promulgated under Section 16 of the Securities Exchange Act of 1934, and the rules and regulations thereunder (the "1934 Act"), specifically approve (i) the assumption by Parent of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, Options and (ii) with respect the issuance of Parent Common Stock in the Merger to any Company Stock Option granted under the TARSOPdirectors, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form officers and substance satisfactory to Parent, and (2) shall not require any action which violates any stockholders of the Company Stock Option Plans. As subject to Section 16 of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP1934 Act.

Stock Options. As of the Effective Time(a) All options (individually, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option") issued under the Company's Amended " and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Options") outstanding at the Effective Time under the 1992 Stock Option PlansPlan of the Company (the "Company Plan") shall terminate remain outstanding following the Effective Time. At the Effective Time, such Company Options shall, by virtue of the Merger and without any further action on the part of the Company or the holder of such Company Options, be canceled assumed by Parent in such manner that Parent (a) is a corporation (or a parent or a subsidiary corporation of such corporation) "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code; or (b) to the extent that Section 424 of the Code does not apply to any such Company Options, would be such a corporation (or a parent or a subsidiary corporation of such corporation) were Section 424 applicable to such option. At the Effective Time, (i) all references in the Company Plan to the Company shall be deemed to refer to Parent and (ii) as soon as practicable, but in no event later than 30 days following the Effective Time, Parent shall issue to each holder of a Company Stock Option a document evidencing the assumption of such option by Parent in accordance herewith. Each Company Option assumed by Company (as assumed, the "Parent Options") shall be exercisable upon the same terms and conditions including, without limitation, vesting, as under the Company Plan and the applicable option agreement issued thereunder, except that (x) each such Company Option shall be entitled exercisable for that whole number of shares of Parent Common Stock (rounded down to receive, in consideration therefor, a cash payment from the nearest whole share) into which the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time would be converted under Section 1.8 of this Agreement; and (y) the option price per share of Parent Common Stock shall be an amount equal to the option price per share of the Company Common Stock subject to such Company Option in effect immediately prior to the Effective Time divided by the Exchange Ratio (the option price per share, as so determined, being rounded upward to the nearest full cent). The date of grant of each Parent Option shall be the date on which the corresponding Company Option was granted. A cash payment shall be made as soon as practicable after for any fractional share based upon the Effective Time) equal to last reported sale price per share of Parent Common Stock on the product Trading Day immediately preceding the date of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPexercise.

Stock Options. As (a) The terms of each outstanding option to purchase shares of Caremark Stock under any employee stock option or compensation plan or arrangement of Caremark (a “Caremark Stock Option”), whether or not exercisable or vested, shall be adjusted as necessary to provide that, at the Effective Time, each outstanding, unexercised stock Caremark Stock Option outstanding immediately prior to the Effective Time shall be deemed to constitute an option to purchase Shares (a "Company acquire, on the same terms and conditions as were applicable under such Caremark Stock Option") issued under , the Company's Amended and Restated 1987 same number of whole shares of CVS Stock as the holder of such Caremark Stock Option Plan (would have been entitled to receive pursuant to the "1987 Plan"), the 1989 Time Accelerated Restricted Merger had such holder exercised such Caremark Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled in full immediately prior to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) , at a price per share of CVS Stock equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect the aggregate exercise price for the shares of Caremark Stock otherwise purchasable pursuant to any Company such Caremark Stock Option granted under divided by (ii) the 1987 Planaggregate number of whole shares of CVS Stock deemed purchasable pursuant to such so adjusted Caremark Stock Option rounded up to the nearest whole cent; provided that the option price, the number of Shares subject shares purchasable pursuant to each such so adjusted option as and the terms and conditions of exercise of each such so adjusted option shall be determined in order to comply with Section 409A of the Code and for any Caremark Stock Option to which Section 421 of the Code applies by reason of its qualification under any of Sections 422 through 424 of the Code, the option price, the number of shares purchasable pursuant to each such so adjusted option and the terms and conditions of exercise of each such so adjusted option shall then be vested and exercisable as determined in order to comply with Section 424 of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of (a) At the Effective Time, each outstandingoutstanding option, unexercised stock option warrant or other right to purchase Shares (a "Company Stock Option" and collectively, "Company Stock Options") issued under pursuant to the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 1999 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Advisors, 1996 Stock Option Plan (Plan, as amended, 1989 Stock Option Plan, as amended, and 1996 Directors' Stock Option Plan, and all other agreements or arrangements other than the "1997 1996 Employee Stock Purchase Plan") (collectively, whether vested or unvested, shall be assumed by Parent and converted as of the Effective Time into an option, warrant or right, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants or rights are referred to collectively as the "Company Stock Option Plans") shall terminate and be canceled and each holder of a ." Each Company Stock Option so converted shall be entitled deemed to receiveconstitute an option to acquire, in consideration therefor, a cash payment from on the Company (which payment shall be made same terms and conditions as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of were applicable under such Company Stock Option, times (b) a number of shares of Parent Common Stock equal to the number of Eligible Shares (as defined below) subject shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such Company Stock Option, whether or not vested, in full immediately prior to the Effective Time rounded down to the nearest whole share at a price per share, rounded up to the nearest tenth of a cent, equal to the exercise price per Share pursuant to such Company Stock Option. Such cash payment shall be net Option immediately prior to the Effective Time divided by the Exchange Ratio; provided, however, that in the case of any required withholding taxes. Notwithstanding the foregoing, any Director option to which Section 421 of the Company who is not also an employee Code applies by reason of its qualification under Sections 422 through 424 of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct Code, the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption price, the number of Shares subject shares purchasable pursuant to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable adjusted as necessary in order to comply with Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of the Effective Time, each outstanding, unexercised stock (a) Each option to purchase Shares UDS Common Stock (a "Company UDS Stock Option") issued granted under UDS Stock Plans which is outstanding immediately prior to the Company's Amended Effective Time shall cease to represent a right to acquire shares of UDS Common Stock and Restated 1987 Stock Option Plan shall be converted (the as so converted, a "1987 PlanUDS Converted Option"), at the 1989 Effective Time Accelerated Restricted and subject to the immediately following sentence, into an option to purchase Valero Common Stock Option Plan (the a "TARSOPValero Stock Option"), on the 1993 same terms and conditions as were applicable under the UDS Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Option. The number of shares of Valero Common Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and subject to each holder of a Company such Valero Stock Option shall be entitled the number of shares of UDS Common Stock subject to receivethe UDS Stock Option multiplied by the Exchange Ratio, in consideration thereforrounded, if necessary, to the nearest whole share of Valero Common Stock, and such Valero Stock Option shall have an exercise price per share (rounded to the nearest one-hundredth of a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Timecent) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share share exercise price of specified in such Company UDS Stock OptionOption divided by the Exchange Ratio; provided, times (b) however, that in the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net case of any required withholding taxes. Notwithstanding the foregoing, any Director UDS Stock Option to which Section 421 of the Company who is not also an employee Code as of the Company may make any payment Effective Time (after taking into account the effect of any taxes incurred as a result accelerated vesting thereof) applies by reason of receipt its qualification under Section 422 of such cash payment and direct the Company not to withhold any portion thereofCode, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planexercise price, the number of Shares shares subject to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable as determined in a manner consistent with the requirements of Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option PlansCode. As of the Effective Time, Valero shall assume the obligations of UDS under the UDS Stock Plans, and from and after the Effective Time, except as otherwise set forth herein, the terms of each of the Company UDS Stock Option Plans and the Company's 1992 Employee UDS Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take under which such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company UDS Stock Option or participant was initially granted, in each case, as in effect immediately prior to the ESPP will have any right Effective Time, shall continue to acquire any interest in apply to the Surviving Corporation under the Company corresponding Valero Stock Option Plans or the ESPPOption.

Stock Options. As of On the Effective Timedate Acquisition Sub purchases Shares pursuant to the Offer, each outstanding, unexercised stock outstanding option to purchase Shares Common Stock (a "Company Stock Option") issued granted under the Company's Amended 1994 Long-Term Stock Incentive Plan or pursuant to any other employee stock option plan or agreement entered into by the Company with any employee of the Company or any subsidiary thereof and Restated 1987 Stock Option Plan listed on Section 3.3 of the Company Disclosure Schedule (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option PlansPlan") ), whether or not then exercisable, shall terminate become exercisable, subject to the terms of the Company Stock Option Plan pursuant to which such Stock Option was issued. If and to the extent that a Stock Option shall not have been exercised at the Effective Time, such Stock Option shall be canceled and each automatically canceled. Each holder of a Company canceled Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made receive as soon as practicable after the Effective Timefirst date payment can be made without liability to such person under Section 16(b) of the Exchange Act from the Company in consideration for such cancellation an amount in cash (less applicable withholding taxes) equal to the product of (ai) the number of shares of Common Stock previously subject to such Stock Option multiplied by (ii) the excess, if any, of (x) the Merger Consideration Per Share Amount over (y) the per Share exercise price per share of such Company Common Stock Option, times (b) the number of Eligible Shares (as defined below) previously subject to such Stock Option (the "Option Consideration") upon surrender of such Stock Option to the Company or an affidavit of loss in the form requested by Parent, together with such additional documentation as may be reasonably required by Parent or the Company. The surrender of a Stock Option in exchange for the Option Consideration in accordance with the terms of this Section 2.6(c) shall be deemed a release of any and all rights the holder had or may have had in respect of such Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding Prior to the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure purchase by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number Acquisition Sub of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject pursuant to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock OptionsOffer, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be use its reasonable best efforts to obtain all necessary to ensure, to Parent's reasonable satisfaction, that no holder consents or releases from holders of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation Options under the Company Stock Option Plans Plan and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section 2.6(c). Except as otherwise agreed to by the parties, the Company shall use its reasonable best efforts to assure that following the purchase by Acquisition Sub of Shares pursuant to the Offer no participant in the Company Stock Option Plan or other plans, programs or arrangements shall have any right thereunder to acquire any equity securities of the ESPPCompany, the Surviving Corporation or any subsidiary thereof and to terminate all such plans.

Stock Options. As The Company has reserved 1,066,824 shares of Common Stock for issuance under the Stock Plans, of which options with respect to 953,281 shares are outstanding as of the date of this Agreement. Section 2.2(b) of the Disclosure Schedule accurately sets forth, with respect to each Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Option and whether such holder is an employee or non-employee; (ii) the total number of shares of Common Stock that are subject to such Option and the number of shares of Common Stock with respect to which such Option is immediately exercisable; (iii) the date on which such Option was granted and the term of such Option; (iv) the vesting schedule for such Option and whether the vesting of such Option shall be subject to any acceleration in connection with the Merger or any of the other transactions contemplated by this Agreement; (v) the exercise price per share of Common Stock purchasable under such Option; and (vi) whether such Option is an “incentive stock option” as defined in Section 422 of the Code or subject to Section 409A of the Code. Each grant of an Option was duly authorized no later than the date on which the grant of such Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the board of directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto, each such grant was made in compliance with the terms of the applicable compensation plan or arrangement of the Company and all other applicable Legal Requirements, the per share exercise price of each Option was equal to or greater than the fair market value of a share of Common Stock on the applicable Grant Date and, except as set forth in Section 2.2(b) of the Disclosure Schedule, each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company and each Option qualifies for the Tax treatment afforded to such Option in the Tax Returns of the Company. All options with respect to shares of Common Stock that were ever issued by the Company ceased to vest on the date on which the holder thereof ceased to be an employee of or a consultant to the Company. The exercise of the Options and the payment of cash in respect thereof complied and will comply with the terms of the Stock Plans, all Contracts applicable to such Options and all applicable Legal Requirements and, as of the Effective Time, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each no former holder of a Company Stock an Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of will have any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) rights with respect to any such Option other than the rights contemplated by Section 1.6(a). The Company has delivered to Parent accurate and complete copies of the Stock Option granted under the 1987 PlanPlans, the number each form of Shares subject to such option as agreement used thereunder and each Contract pursuant to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPis outstanding.

Stock Options. As of At the Effective Time, each outstanding, unexercised stock holder of a then-outstanding option to purchase Shares (a "Company Common Stock Option") issued under the Company's Amended and Restated 1987 1995 Key Employee Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Company's 1995 Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (Plan, the "1997 Plan") Non-Qualified Stock Option Agreement dated as of January 17, 1995 between the Company and Green Equity Investors, L.P. and all other agreements with the Company and its employees and Directors (collectively, the "Company Stock Option Plans") shall terminate (true and be canceled and each holder correct copies of a which have been delivered by the Company Stock Option shall be entitled to receiveParent), whether or not then exercisable (the "Compensation Options"), shall, in consideration thereforsettlement thereof, a receive for each share of Company Common Stock subject to such Compensation Option an amount (subject to any applicable withholding tax) in cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) difference between the Merger Consideration over (y) Price and the per Share share exercise price of such Compensation Option to the extent such difference is a positive number (such amount being hereinafter referred to as, the "Option Consideration"). Upon receipt of the Option Consideration, the Compensation Option shall be canceled. The surrender of a Compensation Option to the Company Stock Option, times (b) in exchange for the number Option Consideration shall be deemed a release of Eligible Shares (as defined below) subject to any and all rights the holder had or may have had in respect of such Company Stock Compensation Option. Such cash payment Prior to the Effective Time, the Company shall obtain all necessary consents or releases from holders of Compensation Options under the Stock Option Plans and take all such other lawful action as may be net of necessary to give effect to the transactions contemplated by this Section 3.01(e) (except for any required withholding taxes. Notwithstanding such action that may require the foregoing, any Director approval of the Company who is not also an employee of Company's stockholders). Except as otherwise agreed to by the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, parties: (i) with respect to any Company the Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option Plans shall then be vested and exercisable terminate as of the Effective DateTime and the provisions in any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company or, any Subsidiary thereof, shall be canceled as of the Effective Time; and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, assure that following the Effective Time no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or other plans, programs or arrangements, including but not limited to, the ESPPCompany's Employee Stock Purchase Plan, shall have any right thereunder to acquire equity securities of the Company, the Surviving Corporation or any Subsidiary thereof and to terminate all such plans.

Stock Options. (a) As soon as practicable following the date of this Agreement, Parent and Company (or, if appropriate, any committee of the Effective TimeBoard of Directors of Company administering Company's Amended and Restated Stock Option Plan and 1996 Stock Option Plan (collectively, the "Company Option Plans") shall take such action as may be required to effect the following provisions of this Section 1.04(a). The terms of each outstanding, unexercised stock outstanding option granted by Company to purchase Shares shares of Company Common Stock under the Company Option Plans (a "Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP")whether vested or unvested, the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled adjusted as necessary to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided provide that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of at the Effective Time, each of the Company Stock Option Plans and outstanding immediately prior to the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as Effective Time shall be necessary deemed to ensureconstitute an option to acquire, to Parent's reasonable satisfaction, that no holder of a on the same terms and conditions as were applicable under such Company Stock Option or participant (after giving effect to the existing provisions in the ESPP will have any right to acquire any interest in Company Option Plans or related option agreements that provide for the Surviving Corporation under automatic acceleration of vesting upon consummation of a change of control of Company), the same number of shares of Parent Common Stock as the holder of such Company Stock Option Plans or would have been entitled to receive pursuant to the ESPPMerger had such holder exercised such Company Stock Option in full immediately prior to the Effective Time (assuming for this purpose that such option were then exercisable), at a price per share of Parent Common Stock equal to (A) the aggregate exercise price for the shares of Company Common Stock otherwise purchasable pursuant to such Company Stock option divided by (B) the aggregate number of shares of Parent Common Stock deemed purchasable pursuant to such Company Stock Option (each, as so adjusted, an "Adjusted Option"); provided that (after aggregating all the Shares of a holder subject to Company Stock Options) any fractional share of Parent Common Stock resulting from such calculation for such holder shall be rounded down to the nearest whole share; and provided further that, in the case of any Company Stock Option to which Section 421 of the Code applies by reason of its qualification under any of Sections 422 through 424 of the Code ("qualified stock options"), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such Adjusted Option shall be determined in such manner so as to comply with Section 424 of the Code. Upon exercise of an Adjusted Option, a cash payment shall be made to the holder of such Adjusted Option for the fractional share of Parent Common Stock referred to in the preceding sentence. For purposes of determining the amount of such payment the price of the Parent Common Stock shall be the average closing price per share of the Parent Common Stock on the NYSE for the five trading days immediately prior to the date of exercise.

Stock Options. As (a) Subject to Section 5.4(b), at the Effective Time, all rights with respect to Company Common Stock under each Company Option then outstanding shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each such Company Option in accordance with the terms (as in effect as of the date of this Agreement) of the stock option plan under which it was issued and the stock option agreement by which it is evidenced. From and after the Effective Time, (i) each Company Option assumed by Parent may be exercised solely for shares of Parent Common Stock, (ii) the number of shares of Parent Common Stock subject to each such Company Option shall be equal to the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole share (with cash, less the applicable exercise price, being payable for any fraction of a share), (iii) the per share exercise price under each such Company Option shall be adjusted by dividing the per share exercise price under such Company Option by the Exchange Ratio and rounding up to the nearest cent and (iv) any restriction on the exercise of any such Company Option shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Company Option shall otherwise remain unchanged; PROVIDED, HOWEVER, that (A) in accordance with the terms of the Employment Agreement between Xxxx X. Xxxxxxx and the Company dated December 1, 1994, all unvested Company Options granted to Xxxx X. Xxxxxxx pursuant to said Employment Agreement shall become immediately exercisable as of the Effective Time, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option"B) issued under in accordance with the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") terms of that certain Employment Agreement between Xxxxxx X. Xxxxx and the 1997 Stock Option Plan (the "1997 Plan") (collectivelyCompany dated April 24, the "Company Stock Option Plans") shall terminate 1995, and be canceled that certain Employment Agreement between Xxxxxxx Xxxxxxxx and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment dated March 3, 1995, certain unvested Company Options granted to Messrs. Selvi and Xxxxxxxx pursuant to said Employment Agreements shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and become immediately exercisable as of the Effective DateTime, and (iiC) in accordance with respect to any Company the terms of the Company's 1995 Directors Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject unvested Company Options granted to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any outside directors of the Company Stock Option Plans. As pursuant to such plan shall become immediately exercisable as of the Effective Time, and (D) each Company Option assumed by Parent in accordance with this Section 5.4(a) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock split, stock dividend, reverse stock split, reclassification, recapitalization or other similar transaction subsequent to the Effective Time. Parent shall file with the SEC, no later than five business days after the date on which the Merger becomes effective, a Registration Statement on Form S-8 relating to the shares of Parent Common Stock issuable with respect to the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant Options assumed by Parent in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPaccordance with this Section 5.4(a).

Stock Options. As of (i) At the Effective Time, each outstandingCompany Option whether vested or unvested, unexercised stock shall be deemed to constitute an option to purchase acquire, on the same terms and conditions as were applicable under such Company Option, the same number of shares of Parent Common Stock as the holder of such Company Option would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time, at a price per share (rounded up to the nearest whole cent) equal to (y) the aggregate exercise price for the Common Shares otherwise purchasable pursuant to such Company Option divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to such Company Option in accordance with the foregoing; provided, however, that in the case of any Company Option to which Section 422 of the Code applies, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code; provided, further, that to the extent that Common Shares acquired upon exercise of a Company Option would be subject to vesting or other restrictions under the terms of the relevant Company Stock Plan under which such Company Option was issued ("Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 PlanRestricted Shares"), the 1989 Time Accelerated Restricted number of shares of Parent Common Stock to be issued upon exercise of an assumed Company Option Plan (in accordance with the "TARSOP"), foregoing that bears the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal same ratio to the product total shares of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of Parent Common Stock deemed purchasable pursuant to such assumed Company Stock Option, times (b) Option as the number of Eligible Company Restricted Shares (as defined below) subject bears to the total number of Company Shares issuable under such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees same vesting and other restrictions as would be applicable to the cancellation of such Company Stock Options, in form and substance satisfactory Restricted Shares. At or prior to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company shall make all necessary arrangements with respect to the Company Stock Option Plans and to permit the Company's 1992 Employee Stock Purchase Plan (assumption of the "ESPP") shall terminate and be of no further force or effect, and the unexercised Company shall take such action as shall be necessary Options by Parent pursuant to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPthis Section.

Stock Options. As All options which may be exercised for issuance of the Effective TimeCompany Common Stock (each, each outstanding, unexercised stock option to purchase Shares (a "Company “Stock Option"” and collectively the “Stock Options”) are described in the Company Disclosure Schedule and are issued under and outstanding pursuant to the Company's Amended and Restated 1987 ’s 2002 Incentive Stock Option Plan, the Company Bank’s 2000 Incentive Stock Option Plan, the Company’s 2002 Stock Option Plan (the "1987 Plan")for Non-Employee Directors, the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Company Bank’s 1998 Stock Option Plan for Non-Employee Directors (or the "Director Plan") and the 1997 Company Bank’s 1996 Stock Option Plan (the "1997 Plan") (collectively, the "“Company Stock Option Plans"”) shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as agreements pursuant to which such option shall then be vested Stock Options were granted (each, an “Option Grant Agreement”). True and exercisable as complete copies of the Effective Date, and (ii) with respect to any Company Company’s Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject Plans and all Option Grant Agreements relating to such optionoutstanding Stock Options have been delivered to Parent. The Company's obligation to make any such cash payment (1) shall be subject Pursuant to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each terms of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effectconsents described in this Section 1.6, and the Company shall take the following actions: (x) at least ten business days prior to the anticipated Election Deadline, the Company shall give all holders of Stock Options the choice of either (A) exercising their Stock Options (whether or not then vested) prior to the Election Deadline or (B) having their unexercised Stock Options cancelled immediately prior to the Effective Time in return for the payment set forth below (the “Cancellation Choice”, it being understood that any such action as holder who fails to specify any such choice prior to the Election Deadline shall be deemed to have elected the Cancellation Choice) and (y) the Company shall give each person exercising Stock Options prior to the Election Deadline a Form of Election in a manner consistent with Section 1.5(i). Between the date hereof and the Closing, the Company and the Company Bank shall take all other actions necessary to ensureeffect the provisions of this Section 1.6. Concurrent with the execution of this Agreement, the Company has delivered to Parent's reasonable satisfactionParent a consent form in which each holder of Stock Options granted under the Company’s 2002 Stock Option Plan for Non-Employee Directors or the Company Bank’s 2000 Stock Option Plan for Non-Employee Directors has consented to the steps contemplated by this Section 1.6 with respect to such holder’s Stock Options. At the Effective Time, each Stock Option which is outstanding and unexercised immediately prior thereto, whether or not then vested or exercisable, shall be canceled and all rights thereunder shall be extinguished. As consideration for such cancellation, the Company shall make payment immediately prior to the Effective Time to each holder of an outstanding Stock Option of an amount, if any, determined by multiplying (x) the number of shares of Company Common Stock underlying such Stock Option by (y) an amount equal to the excess (if any) of (i) the Per Share Cash Consideration, over (ii) the exercise price per share of such Stock Option, provided, however, that no such payment shall be made to a holder unless and until such holder has executed and delivered to the Company an instrument in such form prescribed by Parent and reasonably satisfactory to the Company accepting such payment in full settlement of a his or her rights relative to such Stock Options. Prior to the Effective Time, the Company Stock Option shall take or participant in the ESPP will have any right cause to acquire any interest in the Surviving Corporation be taken all actions required under the Company Stock Option Plans or to provide for the ESPPforegoing.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised Company stock option to purchase Shares (a "“Company Stock Option"”) issued granted and outstanding under the Company's ’s Second Amended and Restated 1987 1994 Stock Option Plan (the "1987 “Company Option Plan")”) which is outstanding and unexercised immediately prior to the Effective Time, whether or not vested, shall be converted into and become an option to purchase Parent Common Stock, and Parent shall assume each such Company Option in accordance with the 1989 Time Accelerated Restricted Stock Option Plan terms (as in effect as of the "TARSOP"), date of this Agreement) of the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") stock option plan under which it was issued and the 1997 Stock Option Plan (terms of the "1997 Plan") (collectivelystock option agreement by which it is evidenced. Accordingly, the "Company Stock Option Plans") shall terminate from and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time, (i) equal to the product each Company Option assumed by Parent may be exercised solely for shares of Parent Common Stock, (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (bii) the number of Eligible Shares (as defined below) shares of Parent Common Stock subject to each such Company Option shall be equal to the number of shares of Company Common Stock subject to such Company Stock Option. Such cash payment Option immediately prior to the Effective Time multiplied by a fraction (the “Exchange Ratio”), the numerator of which shall be net the fair market value per share of any required withholding taxes. Notwithstanding the foregoing, any Director common stock of Parent as of the Company who is not also an employee of Closing (as determined by Parent), and the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereofdenominator shall be $3.22, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option product shall then be vested rounded down to the nearest whole share, (iii) the per share exercise price under each such Company Option shall be adjusted by dividing the per share exercise price under such Company Option by the Exchange Ratio and exercisable as of rounding up to the Effective Date, nearest cent and (iiiv) any restriction on the exercise of any such Company Option shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Company Option shall otherwise remain unchanged; provided, however, that each Company Option assumed by Parent in accordance with respect to any Company Stock Option granted under the TARSOPthis Section 1.6 shall, the Director Plan or the 1997 Planin accordance with its terms, the aggregate number of Shares that shall then be subject to such option. The Company's obligation further adjustment as appropriate to make reflect any such cash payment (1) shall be subject stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction subsequent to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. As of (a) At the Effective Time, the obligations of Heritage with respect to each outstanding, unexercised stock outstanding option to purchase Shares shares of Heritage Common Stock (a "Company Stock OptionOptions") issued under the Company's Amended and Restated 1987 which was properly granted pursuant to a stock option agreement executed in accordance with a Heritage Stock Option Plan (the "1987 Plan")shall be assumed by ONB as hereinafter provided. In connection therewith, the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Stock Option at the Effective Time, that number of shares of ONB common stock, rounded to the nearest whole share, as the holder of such Stock Option would have been entitled to receivereceive pursuant to the Merger had such holder exercised such Option in full (after giving effect to accelerated vesting) immediately prior to the Effective Time and, immediately thereafter, exchanged such shares solely for ONB common stock based upon the Exchange Ratio at an exercise price per share equal to (A) the aggregate exercise price for Heritage Common Stock otherwise purchasable pursuant to such Stock Option divided by (B) the number of shares of ONB common stock, rounded to the nearest whole share, deemed purchasable pursuant to such Stock Option; provided, however, that in consideration thereforthe case of any Stock Option to which Section 422 of the Code applies, a cash payment from the Company (which payment option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be made determined in accordance with the foregoing, subject to such adjustments as soon as practicable are necessary in order to satisfy the requirements of Section 424(a) of the Code. By way of example and illustration only, if any option holder has been granted and is vested in options to acquire 1,000 shares of Heritage Common Stock for $10.00 per share, then after the Effective Time) equal , such option holder's same option would be converted into the option to acquire, 3,154 shares of ONB common stock at $3.17 per share. In no event shall ONB be required to issue fractional shares of ONB common stock pursuant to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase Shares (a each "Company Stock OptionCOMPANY STOCK OPTION" and, collectively, "COMPANY STOCK OPTIONS") issued under pursuant to the Company's Amended and Restated 1987 1995 Stock Plan, 2001 Incentive Stock Plan, 2001 Employee Stock Purchase Plan, 2002 Nonstatutory Stock Option Plan, Altius 1999 Plan (or other agreement or arrangement, whether vested or unvested, shall be converted as of the "1987 Plan"), the 1989 Effective Time Accelerated Restricted into options to purchase shares of Parent Common Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "in accordance with this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option Planshas been issued or may be issued are referred to collectively as the ") shall terminate and be canceled and COMPANY PLANS." At the Effective Time, each holder of a Company Stock Option shall be entitled deemed to receiveconstitute an option to acquire, in consideration therefor, a cash payment from on the Company same terms and conditions (which payment shall be made including but not limited to vesting schedule) as soon as practicable after the Effective Time) equal were applicable to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time at a price per share equal to (bx) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Eligible Shares (as defined below) subject otherwise purchasable pursuant to such Company Stock Option. Such cash payment shall be net Option multiplied by (ii) the Exchange Ratio, rounded down to the nearest cent; provided, however, that in the case of any required withholding taxes. Notwithstanding the foregoing, any Director option to which Section 421 of the Company who is not also an employee Code applies by reason of its qualification under Section 422 of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct Code ("INCENTIVE STOCK OPTIONS" or "ISOs") the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption price, the number of Shares subject shares purchasable pursuant to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable determined so as to comply with Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. The Company has reserved 716,423 shares of Company Common Stock for issuance under the 2000 Plan, of which options with respect to 508,683 shares are outstanding as of the date of this Agreement. The Company has reserved 5,496,653 shares of Company Common Stock for issuance under the 2010 Plan, of which options with respect to 4,444,900 shares are outstanding as of the date of this Agreement. Part 2.3(b) of the Disclosure Schedule accurately sets forth, with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option and the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii) the date on which such Company Option (unless such Company Option was granted under the Company’s 2000 Restated Stock Incentive Plan) was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option and whether the vesting of such Company Option shall be subject to any acceleration in connection with the Merger or any of the other transactions contemplated by this Agreement; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; and (vi) whether such Company Option is an “incentive stock option” as defined in Section 422 of the Code or subject to Section 409A of the Code. Each grant of a Company Option was duly authorized no later than the date on which the grant of such Company Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the board of directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto, each such grant was made in accordance with the terms of the applicable compensation plan or arrangement of the Company and all other applicable Legal Requirements, the per share exercise price of each Company Option was no less than the fair market value of a share of Company Common Stock on the applicable Grant Date and each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company. All options with respect to shares of Company Common Stock that were ever issued by the Company ceased to vest on the date on which the holder thereof ceased to be an employee of or a consultant to the Company. As of the Effective TimeClosing, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each no former holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject will have any rights with respect to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding Option other than the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest receive the consideration described in the Surviving Corporation under the Company Stock Option Plans or the ESPPSection 1.7.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase Shares (a "each “Company Stock Option"” and, collectively, “Company Stock Options”) issued under pursuant to the Company's Amended and Restated 1987 Stock Option Plan (the "1987 ’s 1994 Long-Term Incentive Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (Directors’ Stock Plans, or other agreement or arrangement, whether vested or unvested, shall be converted as of the "Director Plan") and the 1997 Effective Time into options to purchase shares of Parent Common Stock Option Plan (the "1997 Plan") (collectively, the "in accordance with this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued are referred to collectively as the “Company Plans") shall terminate and be canceled and .” At the Effective Time, each holder of a Company Stock Option shall be entitled deemed to receiveconstitute an option to acquire, on the same terms and conditions (but taking into account any changes thereto, including any acceleration in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product vesting or exercisability of (a) the excess, if any, such option by reason of (x) this Agreement or the Merger Consideration over (yor the transactions or matters contemplated by this Agreement provided for in such option or the applicable plan with respect thereto) the per Share exercise price of as were applicable to such Company Stock Option, times a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time, rounded down to the nearest whole share, at a price per share equal to (bi) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (ii) the product of (A) the number of Eligible Shares (as defined below) subject otherwise purchasable pursuant to such Company Stock Option. Such cash payment shall be net Option multiplied by (B) the Exchange Ratio, rounded up to the nearest cent; provided, however, that in the case of any required withholding taxes. Notwithstanding the foregoing, any Director option to which Section 421 of the Company who is not also an employee Code applies by reason of its qualification under Section 422 of the Company Code (“incentive stock options” or “ISOs”) Parent may make any payment of any taxes incurred as a result of receipt of such cash payment and direct cause the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption price, the number of Shares subject shares purchasable pursuant to such option and the terms and conditions of exercise of such option to be determined so as to which such option shall then be vested and exercisable as comply with Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase Shares (a "shares of Company Common Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans (each, a "Company ------- Option"), whether vested or unvested, shall be assumed by Parent and converted ------ into an option (each, a "Parent Option") to acquire, on substantially the ESPPsame ------------- terms and conditions, including but not limited to any performance criteria set forth in the applicable stock option agreements (provided, that notwithstanding any termination of employment with Parent or any resignation as a director of the Company, each optionee shall be deemed, solely for the purposes of such Parent Option, to be an employee or director, as the case may be, for the entire term of each such Parent Option), as were applicable under such Company Option, the number of whole shares of Parent Common Stock equal to the number of shares of Company Common Stock that were issuable upon exercise of such Company Option immediately prior to the Effective Time multiplied by the Exchange Ratio (calculated, if the Election is made, based on the greater of the Parent Average Price determined as set forth in Section 2.1(a)(ii) or a Parent Average Price of $80.00 per share, and in any event rounded down to the nearest whole number of shares of Parent Common Stock), and the per share exercise price of the shares of Parent Common Stock issuable upon exercise of such Parent Option shall be equal to the exercise price per share of Company Common Stock at which such Company Option was exercisable immediately prior to the Effective Time divided by the Exchange Ratio (calculated, if the Election is made, as set forth above, and in any event rounded up to the nearest whole cent). The Company shall not, and shall cause any Company Stock Option Plan administrator not to, take any action prior to the Effective Time that will extend the exercise period of any Company Option or cause the vesting period of any Company Option to accelerate under any circumstances (other than as may already be provided by the terms of such Company Option or as is contemplated by this Section 2.2(a)), regardless of whether such circumstances are to occur before or after the Effective Time, or otherwise amend the terms of outstanding Company Options.

Stock Options. As of (a) Subject to Section 5.1(b), at the Effective Time, each outstandingCompany Option which is outstanding and unexercised immediately prior to the Effective Time, unexercised stock whether or not vested, shall be converted into and become an option to purchase Shares Parent Common Stock, and Parent shall assume each such Company Option in accordance with the terms (a "Company Stock Option"as in effect as of the date of this Agreement) of the stock option plan under which it was issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (terms of the "1997 Plan") (collectivelystock option agreement by which it is evidenced in a manner consistent with the requirements of Section 422 of the Code. Accordingly, the "Company Stock Option Plans") shall terminate from and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time, (i) each Company Option assumed by Parent may be exercised solely for shares of Parent Common Stock, (ii) the number of shares of Parent Common Stock to be subject to each assumed Company Option shall be equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (bA) the number of Eligible Shares (as defined below) shares of Company Common Stock subject to the original Company Option and (B) the Exchange Ratio (rounded down to the nearest whole share); (iii) the exercise price per share of Parent Common Stock under the assumed Company Option shall be equal to the quotient of (A) the exercise price per share of Company Common Stock under the original Company Option divided by the Exchange Ratio (rounded up to the nearest whole cent); and (iv) any restriction on the exercise of any such Company Stock Option. Such cash payment Option shall be net of any required withholding taxes. Notwithstanding continue in full force and effect and the foregoingterm, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt exercisability, vesting schedule and other provisions of such cash payment and direct Company Option shall otherwise remain unchanged; PROVIDED, HOWEVER, that each Company Option assumed by Parent in accordance with this Section 5.1(a) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction subsequent to the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax paymentEffective Time. The term "Eligible Shares" shall mean, (i) adjustments provided herein with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option Options which are "incentive stock options" (as to which such option shall then be vested and exercisable as defined in Section 422 of the Effective DateCode) shall be effected in a manner consistent with the requirements of Section 424(a) of the Code. Parent shall file with the SEC, and (ii) no later than 60 days after the date on which the Merger becomes effective, a registration statement on Form S-8 relating to the shares of Parent Common Stock issuable with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant Options assumed by Parent in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPaccordance with this Section 5.1(a).

Stock Options. As of (a) Each option to purchase Company Common Stock (a "Company Option") that was granted under any employee or director stock option or compensatory plan or other arrangement with the Company prior to the Effective Time, each outstandingwhether or not exercisable at the Effective Time, unexercised stock and which remains outstanding immediately prior to the Effective Time, shall be assumed by Buyer, shall cease to represent a right to acquire shares of Company Common Stock and shall be appropriately adjusted and converted, at the Effective Time, into an option to purchase Shares acquire Buyer Common Stock (a the "Company Stock Buyer Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder applicable stock option plan of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (all of which payment plans shall be made as soon as practicable after assumed by Buyer at the Effective Time) in accordance with this Section 1.08(a). The Buyer Option shall entitle the holder to purchase from Buyer that number of whole shares of common stock of Buyer, par value $.01 per share (the "Buyer Common Stock"), equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) shares of Company Common Stock that were subject to such Company Option immediately prior to the Effective Time multiplied by 0.0836, rounded down to the nearest whole number of shares of Buyer Common Stock, and the per share exercise price for the shares of Buyer Common Stock Option. Such cash payment shall issuable upon exercises of such substituted Buyer Option will be net of any required withholding taxes. Notwithstanding equal to the foregoing, any Director quotient determined by dividing the exercise price per share of the Company who is not also an employee Common Stock at which such Company Option was exercisable immediately prior to the Effective Time by 0.0836, rounded up to the nearest whole cent; provided, however, that in the case of any Option to which Section 421 of the Company may make any payment Internal Revenue Code of any taxes incurred 1986, as a result amended, and the rules and regulations adopted pursuant thereto (the "Code") applies by reason of receipt its qualification under Section 422 of such cash payment and direct the Company not to withhold any portion thereofCode, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption exercise price, the number of Shares shares subject to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable as determined in a manner consistent with the requirements of Section 424(a) of the Effective Date, and (ii) with respect Code so as not to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number constitute a "modification" of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase Shares (each, a "“Company Stock Option"” and, collectively, “Company Stock Options”) issued under pursuant to the Company's Amended and Restated 1987 ’s 2005 Equity Incentive Plan, 2004 Stock Option Incentive Plan, 2000 Equity Participation Plan (or any other agreement or arrangement, whether vested or unvested, shall be converted as of the "1987 Plan"), the 1989 Effective Time Accelerated Restricted into options to purchase shares of Parent Common Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "in accordance with this Section 2.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued are referred to collectively as the “Company Plans") shall terminate and be canceled and .” At the Effective Time, each holder of a Company Stock Option shall be entitled deemed to receiveconstitute an option to acquire, on the same terms and conditions (but taking into account any changes thereto, including any acceleration in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product vesting or exercisability of (a) the excess, if any, such option by reason of (x) this Agreement or the Merger Consideration over (yor the transactions or matters contemplated by this Agreement provided for in such option or the applicable plan with respect thereto) the per Share exercise price of as were applicable to such Company Stock Option, times (b) a number of shares of Parent Common Stock equal to the number of Eligible Shares (as defined below) shares of Company Common Stock subject to such Company Stock Option. Such cash payment shall be net Option immediately prior to the Effective Time, multiplied by the Exchange Ratio, rounded down to the nearest whole share, at a price per share of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not Parent Common Stock equal to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect the per share exercise price for the shares of Company Common Stock otherwise purchasable pursuant to any such Company Stock Option granted divided by (ii) the Exchange Ratio, rounded up to the nearest cent; provided, 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 1987 PlanCode (“incentive stock options” or “ISOs”), Parent may cause the option price, the number of Shares subject shares purchasable pursuant to such option and the terms and conditions of exercise of such option to be determined so as to which such option shall then be vested and exercisable as comply with Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase Shares (a each "Company Stock OptionCOMPANY STOCK OPTION" and, collectively, "COMPANY STOCK OPTIONS") issued under pursuant to the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (or any other agreement or arrangement, whether vested or unvested, shall be converted as of the "1997 Plan") (collectively, the "Effective Time into options to purchase shares of Parent Common Stock in accordance with this Section 2.11. All plans or agreements described above pursuant to which any Company Stock Option Planshas been issued or may be issued are referred to collectively as the ") shall terminate and be canceled and COMPANY PLANS." At the Effective Time, each holder of a Company Stock Option shall be entitled deemed to receiveconstitute an option to acquire, on the same terms and conditions (but taking into account any changes thereto, including any acceleration in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product vesting or exercisability of (a) the excess, if any, such option by reason of (x) this Agreement or the Merger Consideration over (yor the transactions or matters contemplated by this Agreement provided for in such option or the applicable plan with respect thereto) the per Share exercise price of as were applicable to such Company Stock Option, times (b) a number of shares of Parent Common Stock equal to the number of Eligible Shares (as defined below) shares of Company Common Stock subject to such Company Stock Option. Such cash payment shall be net Option immediately prior to the Effective Time, multiplied by the Exchange Ratio, rounded down to the nearest whole share, at a price per share of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not Parent Common Stock equal to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect the per share exercise price for the shares of Company Common Stock otherwise purchasable pursuant to any such Company Stock Option granted divided by (ii) the Exchange Ratio, rounded up to the nearest cent; 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 1987 PlanCode ("INCENTIVE STOCK OPTIONS" or "ISOs"), Parent may cause the option price, the number of Shares subject shares purchasable pursuant to such option and the terms and conditions of exercise of such option to be determined so as to which such option shall then be vested and exercisable as comply with Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As (a) Each outstanding option to purchase shares of MediaOne Common Stock granted under any stock option or compensation plans or arrangements (a "MEDIAONE STOCK OPTION"), whether or not exercisable or vested, shall be adjusted as necessary to provide that, at the Effective Time, each outstanding, unexercised stock MediaOne Stock Option outstanding immediately prior to the Effective Time shall be deemed to constitute an option to purchase Shares (a "Company Stock Option") issued acquire, on the same terms and conditions as were applicable under the Company's Amended and Restated 1987 such MediaOne Stock Option Plan (the "1987 Plan"including terms regarding vesting), the 1989 Time Accelerated Restricted same number of shares of Comcast Common Stock as the holder of such MediaOne Stock Option Plan would have been entitled to receive pursuant to the Merger had such holder exercised such MediaOne Stock Option in full immediately prior to the Effective Time, at a price per share of Comcast Common Stock equal to (A) the aggregate exercise price for the shares of MediaOne Common Stock otherwise purchasable pursuant to such MediaOne Stock Option divided by (B) the aggregate number of shares of Comcast Common Stock deemed purchasable pursuant to such MediaOne Stock Option (each, as so adjusted, an "TARSOPADJUSTED OPTION"), ; provided that any fractional share of Comcast Common Stock resulting from an aggregation of all the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder shares of a Company holder subject to MediaOne Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal rounded up to the product of (a) the excessnearest whole share, if anyand provided further that, of (x) the Merger Consideration over (y) the per Share exercise price of such Company for any MediaOne Stock Option, times (b) the number of Eligible Shares (as defined below) subject Option to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director which Section 421 of the Company who is not also an employee Code applies by reason of its qualification under any of Sections 422 through 424 of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct Code, the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption price, the number of Shares subject shares purchasable pursuant to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable as determined in order to comply with Section 424 of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of the Effective TimeAll options and warrants to acquire Company Common Stock (individually, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option" and collectively, the "Company Options") issued outstanding at the Effective Time under the Company's Amended and Restated 1987 1992 Stock Option Plan, the Company's 1995 Stock Option Plan or otherwise (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate remain outstanding following the Effective Time. At the Effective Time, such Company Options, by virtue of the Merger and be canceled and each without any further action on the part of the Company or the holder of such Company Options, shall be assumed by Watsxx xx such manner that Watsxx (x) is a corporation (or a parent or a subsidiary corporation of such corporation) "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code; or (b) to the extent that Section 424 of the Code does not apply to any such Company Options, would be such a corporation (or a parent or a subsidiary corporation of such corporation) were Section 424 applicable to such option. Each Company Option assumed by Watsxx xxxll be exercisable upon 4 the same terms and conditions as under the applicable Company Stock Option Plan and the applicable option agreement issued thereunder, except that (x) the unexercised portion of each such Company Option shall be entitled exercisable for that whole number of shares of Watsxx Xxxmon Stock (rounded to receivethe nearest whole share, with 0.5 rounded upward) equal to the number of shares of Company Common Stock subject to the unexercised portion of such Company Option multiplied by the Exchange Ratio; and (y) the option exercise price per share of Watsxx Xxxmon Stock shall be an amount equal to the option exercise price per share of Company Common Stock subject to such Company Option in consideration thereforeffect at the Effective Time divided by the Exchange Ratio (the option price per share, a cash payment from as so determined, being rounded to the Company (which nearest full cent, with $0.005 rounded upward). No payment shall be made for fractional interests. The term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Code, if applicable, and all of the other terms of the Company Options shall otherwise remain unchanged unless modified by or as a result of the transaction contemplated by this Agreement. As soon as practicable after the Effective Time) equal , Watsxx xxxll deliver to the product holders of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of Company Options appropriate notices setting forth such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject holders' rights pursuant to such Company Stock Option. Such cash payment shall be net Options, as amended by this Section 1.5 as well as notice of any required withholding taxes. Notwithstanding the foregoing, any Director Watsxx'x xxxumption of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) Company's obligations with respect thereto (which occurs by virtue of this Agreement). Watsxx xxxll take all corporate actions necessary to any Company Stock Option granted under the 1987 Plan, the reserve for issuance such number of Shares subject shares of Watsxx Xxxmon Stock as will be necessary to such option as to which such option shall then be vested and exercisable as satisfy exercises in full of the Effective Date, and (ii) with respect to any all Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of Options after the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. As of (a) Each option to purchase Company Common Stock (a “Company Option”) that was granted under any employee or director stock option or compensatory plan or other arrangement with the Company prior to the Effective Time, each outstandingwhether or not exercisable at the Effective Time, unexercised and which remains outstanding immediately prior to the Effective Time, shall be assumed by Buyer, shall cease to represent a right to acquire shares of Company Common Stock and shall be appropriately adjusted and converted, at the Effective Time, into an option to acquire Buyer Common Stock (the “Buyer Option”) under the applicable stock option to purchase Shares (a "Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder plan of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (all of which payment plans shall be made as soon as practicable after assumed by Buyer at the Effective Time) in accordance with this Section 1.08(a). The Buyer Option shall entitle the holder to purchase from Buyer that number of whole shares of common stock of Buyer, par value $.01 per share (the “Buyer Common Stock”), equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) shares of Company Common Stock that were subject to such Company Option immediately prior to the Effective Time multiplied by 0.0836, rounded down to the nearest whole number of shares of Buyer Common Stock, and the per share exercise price for the shares of Buyer Common Stock Option. Such cash payment shall issuable upon exercises of such substituted Buyer Option will be net of any required withholding taxes. Notwithstanding equal to the foregoing, any Director quotient determined by dividing the exercise price per share of the Company who is not also an employee Common Stock at which such Company Option was exercisable immediately prior to the Effective Time by 0.0836, rounded up to the nearest whole cent; provided, however, that in the case of any Option to which Section 421 of the Company may make any payment Internal Revenue Code of any taxes incurred 1986, as a result amended, and the rules and regulations adopted pursuant thereto (the “Code”) applies by reason of receipt its qualification under Section 422 of such cash payment and direct the Company not to withhold any portion thereofCode, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption exercise price, the number of Shares shares subject to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable as determined in a manner consistent with the requirements of Section 424(a) of the Effective Date, and (ii) with respect Code so as not to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number constitute a “modification” of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. As (a) At the Effective Time, in accordance with Section 5(c)(ii) of the Company 1999 Stock Option Plan and Section V.C.2. of the Company 1995 Non-Employee Director Stock Option Plan, respectively, all rights to acquire Company Common Stock under each Option then outstanding under the Company 1999 Stock Option Plan and the Company 1995 Non-Employee Director Stock Option Plan shall be converted into and become rights to receive in lieu of each share of Company Common Stock then subject to the Option, the number and class of shares and/or other securities or property (including cash) comprising the Merger Consideration. With respect to each such Option (an "ASSUMED OPTION"), Parent shall assume the obligation to deliver to each holder of such Option (an "OPTIONHOLDER") the amount of Merger Consideration payable upon the exercise of the Assumed Option. From and after the Effective Time (i) each Assumed Option may be exercised solely for Merger Consideration as provided herein and (ii) in 1999 Stock Option Plan and the Company 1995 accordance with the terms of the Company Non-Employee Director Stock Option Plan, any restriction on the exercise of any such Assumed Option shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Assumed Option shall otherwise remain unchanged; provided, however that each Assumed Option shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock split, stock dividend, reverse stock split, reclassification, recapitalization or other similar transaction subsequent to the Effective Time in accordance with and subject to the 1999 Stock Option Plan and the Company 1995 Non-Employee Director Stock Option Plan. Within a reasonable time after the Effective Time, Parent shall issue to each Optionholder a document describing the terms applicable to Assumed Options. In addition, the Company Board (or a committee thereof consisting of two or more non-employee directors, each of whom shall be to the extent required by Rule 16b-3, a "non-employee director" as defined in Rule 16b-3 of the Exchange Act ) shall adopt such resolutions and take other actions, if any, as may be required to provide that upon the Effective Time, all outstanding unexercised options (whether vested or unvested and without regard to limitations on exercise otherwise contained in the agreement evidencing the option) granted pursuant to the Company 1993 Stock Option Plan and the Company 1997 Stock Option Plan ("TERMINATING OPTIONS") shall be terminated effective as of the Effective Time in accordance with the terms of each such plan, respectively, and the Company shall deliver a notice of termination to each holder of a Terminating Option at least 20 days prior to the Effective Time; provided that, during the period from the date on which such notice of termination is delivered to the Effective Time, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Terminating Option shall be entitled have the right to receiveexercise in full all of his or her Terminating Options that are then outstanding (whether vested or unvested and without regard to limitations on exercise otherwise contained in the agreement evidencing the Terminating Option), in consideration thereforbut contingent on occurrence of the Merger, a cash payment from and provided that, if the Company (which payment Merger does not take place within 180 days after giving such notice for any reason whatsoever, the notice and exercise shall be made null and void. Parent shall register the number and class of shares as soon as practicable after comprise the Merger Consideration issuable upon the exercise of the Assumed Options with the Securities and Exchange Commission on a Form S-8 not later than 15 days following the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. (a) As soon as practicable following the date of this Agreement, Parent and Company (or, if appropriate, any committee of the Board of Directors of Company administering Company's Amended and Restated Stock Option Plan and 1996 Stock Option Plan (collectively, the "COMPANY OPTION PLANS") shall take such action as may be required to effect the following provisions of this Section 1.04(a). The terms of each outstanding option granted by Company to purchase shares of Company Common Stock under the Company Option Plans (a "COMPANY STOCK OPTION"), whether vested or unvested, shall be adjusted as necessary to provide that at the Effective Time, each outstanding, unexercised stock Company Stock Option outstanding immediately prior to the Effective Time shall be deemed to constitute an option to purchase Shares (a "acquire, on the same terms and conditions as were applicable under such Company Stock Option") issued under Option (after giving effect to the existing provisions in the Company Option Plans or related option agreements that provide for the automatic acceleration of vesting upon consummation of a change of control of Company's Amended and Restated 1987 ), the same number of shares of Parent Common Stock as the holder of such Company Stock Option Plan would have been entitled to receive pursuant to the Merger had such holder exercised such Company Stock Option in full immediately prior to the Effective Time (assuming for this purpose that such option were then exercisable), at a price per share of Parent Common Stock equal to (A) the aggregate exercise price for the shares of Company Common Stock otherwise purchasable pursuant to such Company Stock option divided by (B) the aggregate number of shares of Parent Common Stock deemed purchasable pursuant to such Company Stock Option (each, as so adjusted, an "1987 PlanADJUSTED OPTION"); provided that (after aggregating all the Shares of a holder subject to Company Stock Options) any fractional share of Parent Common Stock resulting from such calculation for such holder shall be rounded down to the nearest whole share; and provided further that, in the case of any Company Stock Option to which Section 421 of the Code applies by reason of its qualification under any of Sections 422 through 424 of the Code ("QUALIFIED STOCK OPTIONS"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP")option price, the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") number of shares purchasable pursuant to such option and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate terms and be canceled and each holder conditions of a Company Stock exercise of such Adjusted Option shall be entitled determined in such manner so as to receive, in consideration thereforcomply with Section 424 of the Code. Upon exercise of an Adjusted Option, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product holder of (a) such Adjusted Option for the excess, if any, fractional share of (x) Parent Common Stock referred to in the Merger Consideration over (y) preceding sentence. For purposes of determining the per Share exercise amount of such payment the price of such Company the Parent Common Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director average closing price per share of the Company who is not also an employee of Parent Common Stock on the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company NYSE for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject five trading days immediately prior to the obtaining date of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPexercise.

Stock Options. As On the date Acquisition Sub purchases Shares pursuant to the Offer, each outstanding option to purchase Common Stock (a "STOCK OPTION") granted under the Company's 1994 Long-Term Stock Incentive Plan or pursuant to any other employee stock option plan or agreement entered into by the Company with any employee of the Company or any subsidiary thereof and listed on Section 3.3 of the Company Disclosure Schedule (the "COMPANY STOCK OPTION PLAN"), whether or not then exercisable, shall become exercisable, subject to the terms of the Company Stock Option Plan pursuant to which such Stock Option was issued. If and to the extent that a Stock Option shall not have been exercised at the Effective Time, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option") issued under the Company's Amended and Restated 1987 such Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each automatically canceled. Each holder of a Company canceled Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made receive as soon as practicable after the Effective Timefirst date payment can be made without liability to such person under Section 16(b) of the Exchange Act from the Company in consideration for such cancellation an amount in cash (less applicable withholding taxes) equal to the product of (ai) the number of shares of Common Stock previously subject to such Stock Option multiplied by (ii) the excess, if any, of (x) the Merger Consideration Per Share Amount over (y) the per Share exercise price per share of such Company Common Stock Option, times (b) the number of Eligible Shares (as defined below) previously subject to such Stock Option (the "OPTION CONSIDERATION") upon surrender of such Stock Option to the Company or an affidavit of loss in the form requested by Parent, together with such additional documentation as may be reasonably required by Parent or the Company. The surrender of a Stock Option in exchange for the Option Consideration in accordance with the terms of this Section 2.6(c) shall be deemed a release of any and all rights the holder had or may have had in respect of such Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding Prior to the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure purchase by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number Acquisition Sub of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject pursuant to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock OptionsOffer, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be use its reasonable best efforts to obtain all necessary to ensure, to Parent's reasonable satisfaction, that no holder consents or releases from holders of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation Options under the Company Stock Option Plans Plan and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section 2.6(c). Except as otherwise agreed to by the parties, the Company shall use its reasonable best efforts to assure that following the purchase by Acquisition Sub of Shares pursuant to the Offer no participant in the Company Stock Option Plan or other plans, programs or arrangements shall have any right thereunder to acquire any equity securities of the ESPPCompany, the Surviving Corporation or any subsidiary thereof and to terminate all such plans.

Stock Options. As of (a) After the Effective Time, each outstanding, unexercised stock ------------- outstanding option to purchase Shares shares of Concentric Common Stock granted under any Concentric stock option or compensation plans or arrangements (a "Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 PlanCONCENTRIC STOCK OPTION"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP")whether or not exercisable or vested, the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled adjusted as necessary to receiveprovide that, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of at the Effective Time, each Concentric Stock Option outstanding immediately prior to the Effective Time shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Concentric Stock Option (including terms regarding vesting), the same number of shares of Newco Common Stock as the holder of such Concentric Stock Option would have been entitled to receive pursuant to the Mergers had such holder exercised such Concentric Stock Option in full immediately prior to the Effective Time, at a price per share of Newco Common Stock equal to (A) the aggregate exercise price for the shares of Concentric Common Stock otherwise purchasable pursuant to such Concentric Stock Option divided by (B) the aggregate number of shares of Newco Common Stock deemed purchasable pursuant to such Concentric Stock Option (each, as so adjusted, an "ADJUSTED OPTION") rounded up to the nearest cent; provided that any fractional share of Newco Common Stock resulting from an aggregation of all the shares of a holder subject to Concentric Stock Option shall be rounded down to the nearest whole share, and provided further that, for any Concentric Stock Option to which Section 421 of the Company Stock Option Plans Code applies by reason of its qualification under any of Sections 422 through 424 of the Code, the option price, the number of shares purchasable pursuant to such option and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate terms and be conditions of no further force or effect, and the Company shall take exercise of such action as option shall be necessary determined in order to ensure, to Parent's reasonable satisfaction, that no holder comply with Section 424 of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase IPIX Shares (a an "Company IPIX Stock Option" or collectively, "IPIX Stock Options") issued under pursuant to the Company's Amended 1997 Equity Compensation Plan, whether vested or unvested, and Restated 1987 all other outstanding options to purchase IPIX Shares that are listed in Section 1.09 of the Disclosure Schedule shall be assumed by bamboo (all of such plans or agreements pursuant to which any IPIX Stock Option Plan (has been issued or may be issued are referred to collectively as the "1987 PlanIPIX Stock Option Plans"). Each IPIX Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such IPIX Stock Option, the same number of bamboo Shares (rounded up to the nearest whole share) as the holder of such IPIX Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time, at a price per share (rounded down to the nearest whole cent) equal to (y) the aggregate exercise price for the IPIX Shares otherwise purchasable pursuant to such IPIX Stock Option divided by (z) the number of full bamboo Shares deemed purchasable pursuant to such IPIX Stock Option; 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 ("incentive stock options" or "ISOs"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption price, the number of Shares subject shares purchasable pursuant to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable as determined in order to comply with section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of the Effective Timetime the Purchaser initially accepts for ------------- payment and pays for the Shares pursuant to Section 1.1 (the AInitial Payment Time@), each outstanding, unexercised outstanding stock option to purchase Shares (a an "Company Stock Option" and, collectively, the "Options") issued granted under the Company's Amended Command Systems, Inc. 1997 Employee, Director and Restated 1987 Consultant Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP")as amended and restated, the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan"and those certain options set forth on Schedule 2.1(d) and the 1997 Stock Option Plan (the "1997 Plan") hereto (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option ), whether or not then vested or exercisable, shall be entitled cancelled and converted into the right to receive, in consideration therefor, a cash payment receive from the Company (which payment shall be made as soon as practicable after the Effective Time) an amount of cash equal to the product of (ai) the number of shares of Company Common Stock subject to each Option and (ii) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price per share of such Company Common Stock Optionof each Option (the aggregate amount being referred to herein as the "Option Consideration"). Prior to the Initial Payment Time, times (b) the number Company shall take all steps necessary to give written notice to each holder of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment an Option that all Options shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable canceled effective as of the Effective DateInitial Payment Time and the Company shall pay such holder, and (ii) with respect to any Company Stock Option granted under promptly following the TARSOPInitial Payment Time, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to Option Consideration for all Options held by such optionholder. The Company's obligation Board of Directors or any committee thereof responsible for the administration of the Option Plans shall take any and all action necessary to make any effectuate the matters described in this Section 2.1(d) on or before the Initial Payment Time. Schedule 3.2 sets forth the number of shares of Company Common Stock reserved for issuance upon exercise of outstanding Options and sets forth the exercise price for each such cash payment (1Option. Any amounts payable pursuant to this Section 2.1(d) shall be subject to the obtaining any required withholding of any necessary consents of optionees to the cancellation of such Company Stock Options, in form taxes and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPpaid without interest.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued under pursuant to the Company's Amended and Restated 1987 Tandem Stock Option Plan (or other agreement or arrangement, whether vested or unvested, and outstanding as of the "1987 Plan"), Effective Time shall be converted as of the 1989 Effective Time Accelerated Restricted into options to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, has been issued or may be issued are referred to collectively as the "Company Stock Option Plans") shall terminate and be canceled and each holder of a ." Each Company Stock Option shall be entitled deemed to receive, in consideration therefor, constitute an option to acquire a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) number of shares of Parent Common Stock equal to the product number of (a) shares of Parent Common Stock that the excess, if any, holder of (x) such Company Stock Option would have been entitled to receive pursuant to the Merger Consideration over (y) the per Share exercise price of had such holder exercised such Company Stock Option, times whether or not vested, in full immediately prior to the Effective Time (brounded to the nearest whole share) at a price per share (rounded to the nearest whole cent) equal to (i) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (ii) the product of (A) the number of Eligible Shares (as defined below) subject otherwise purchasable pursuant to such Company Stock Option. Such cash payment shall be net , multiplied by (B) the Exchange Ratio; provided, however, that in the case of any required withholding taxes. Notwithstanding the foregoing, any Director option to which Section 421 of the Company who is not also an employee Code applies by reason of its qualification under Section 422 of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct Code ("incentive stock options" or "ISOs") the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption price, the number of Shares subject shares purchasable pursuant to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable adjusted as necessary in order to comply with Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of (a) At the Effective Time, each outstandingoutstanding option, unexercised stock option warrant or other right to purchase Shares (a "“Company Stock Option"” or collectively, “Company Stock Options”) issued under pursuant to the Company's Amended and Restated 1987 ’s 1992 Incentive Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted 1992 Nonqualified Stock Option Plan (the "TARSOP")Plan, the 1993 1997 Employee Stock Option Purchase Plan, 1997 Equity Incentive Plan, 1997 Employee Stock Purchase Plan for Non-Employee Directors (United States Employees, 2003 J.X. Xxxxxxx & Company Equity Incentive Plan, YOUcentric 2000 Equity Compensation Plan or other agreement or arrangement, whether vested or unvested, shall be converted as of the "Director Plan") and the 1997 Effective Time into an option, warrant or right, as applicable, to purchase shares of Parent Common Stock Option Plan (the "1997 Plan") (collectively, the "in accordance with this Section 1.10. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants or rights are referred to collectively as the “Company Plans") shall terminate and be canceled and .” At the Effective Time, each holder of a Company Stock Option so converted shall be entitled deemed to receiveconstitute an option to acquire, on the same terms and conditions as were applicable to such Company Stock Option as set forth in consideration therefor, a cash payment from the applicable Company (which payment shall be made as soon as practicable after Plan and the agreement(s) evidencing the grant thereof immediately prior to the Effective Time) , including provisions with respect to vesting, a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such Company Stock Option in full immediately prior to the Effective Time at a price per share equal to (x) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (ai) the excess, if any, number of (x) the Merger Consideration over (y) the per Share exercise price of Shares otherwise purchasable pursuant to such Company Stock Option, times multiplied by (bii) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net Exchange Ratio; provided, however, that in the case of any required withholding taxes. Notwithstanding the foregoing, any Director option to which Section 421 of the Company who is not also an employee Code applies by reason of its qualification under Section 422 through Section 424 of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct Code (“incentive stock options” or “ISOs”) the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption price, the number of Shares subject shares purchasable pursuant to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable determined so as to comply with Section 424(a) of the Effective Date, Code and (ii) with respect to any Company Stock Option granted under it is the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any intention of the Company Stock Option Plans. As of parties that such options will qualify as incentive stock options following the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. As (a) Except as provided in Section 2.04(b), the terms of each outstanding option to purchase shares of Company Stock under any employee stock option or compensation plan or arrangement of the Company (a “Company Stock Option”), whether or not exercisable or vested, shall be adjusted as necessary to provide that, at the Effective Time, each outstandingCompany Stock Option outstanding immediately prior to the Effective Time shall be deemed to constitute a fully vested option (each, unexercised stock option an “Adjusted Option”) to purchase Shares (a "acquire, on the same terms and conditions, other than vesting, as were applicable under such Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted number of shares of Parent Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (bi) the number of Eligible Shares (as defined below) shares of Company Stock subject to such Company Stock OptionOption immediately prior to the Effective Time multiplied by (ii) the Stock Option Exchange Ratio. Such cash payment The exercise price per share of Parent Stock subject to any such Adjusted Option (the “Adjusted Option Exercise Price”) will be an amount (rounded up to the nearest one hundredth of a cent) equal to the quotient of (A) the exercise price per share of Company Stock subject to such Company Stock Option immediately prior to the Effective Time divided by (B) the Stock Option Exchange Ratio; provided that the exercise price otherwise determined shall be net increased to the extent, if any, required to ensure that the In The Money Amount of any required withholding taxesthe Adjusted Option immediately after the adjustment is equal to the In The Money Amount of the corresponding Company Stock Option immediately prior to the exchange. Notwithstanding the foregoing, any Director the exercise price of, and number of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall meanshares subject to, (i) each Adjusted Option shall be determined as necessary to comply with respect Section 409A of the Code, and (ii) (x) any fractional share of Parent Stock resulting from an aggregation of all the shares of a holder subject to any Company Stock Option granted shall be rounded down to the nearest whole share and (y) for any Company Stock Option to which Section 421 of the Code applies by reason of its qualification under any of Sections 422 through 424 of the 1987 PlanCode, the option price, the number of Shares subject shares purchasable pursuant to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable as determined in order to comply with Section 424 of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As (a) Except as provided in (c) below with respect to the Company's 1997 Employee Stock Purchase Plan, as amended (the "Company ESPP"), each option to purchase shares of Company Common Stock that is outstanding at the Effective Time, each outstanding, unexercised stock option to purchase Shares whether or not exercisable and whether or not vested (a "Company Stock Option") issued under shall, without any action on the Company's Amended and Restated 1987 Stock Option Plan part of the Company or the holder thereof, be assumed by Parent in such manner that Parent (i) is a corporation "assuming a stock option in a transaction to which Section 424(a) applies" within the "1987 Plan"), meaning of Section 424 of the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") Code and the 1997 Stock Option Plan regulations thereunder or (ii) to the "1997 Plan") (collectivelyextent that Section 424 of the Code does not apply to any such Company Option, would be such a corporation were Section 424 of the "Code applicable to such Company Stock Option Plans") shall terminate Option. From and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time, all references to the Company in the Company Options shall be deemed to refer to Parent. The Company Options assumed by Parent shall be exercisable upon the same terms and conditions as under the Company Options (including provisions regarding vesting and the acceleration thereof) except that (i) such Company Options shall entitle the holder to 5. purchase from Parent the number of shares of Parent Common Stock (rounded down to the nearest whole number of such shares) that equals the product of the Conversion Ratio multiplied by the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time, (ii) the option exercise price per share of Parent Common Stock shall be an amount (rounded up to the nearest full cent) equal to the product option exercise price per share of Company Common Stock in effect immediately prior to the Effective Time divided by the Conversion Ratio, and (aiii) the excess, if any, of (x) Company Options shall vest to the Merger Consideration over (y) extent required pursuant to the per Share exercise price current terms of such Company Stock Option, times (b) Options or other agreements as described in Section 1.7 of the number of Eligible Shares Company Disclosure Schedule (as defined below) ); provided that if such vesting of Company Options or other provisions with respect to the Company Options would jeopardize the Merger being accounted for as a "pooling of interests", then the Company shall, subject to Parent's written consent not to be unreasonably withheld, use reasonable best efforts to prevent such vesting or effect of other provisions. Except to the extent required pursuant to the current terms of such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director Options or other agreements as described in Section 1.7 of the Company who is Disclosure Schedule (as defined below), the Company shall not also an employee take any action to accelerate the vesting of any Company Options. Prior to the Effective Time, the Board of Directors of Parent shall, for purposes of Rule 16b-3(d)(1) promulgated under Section 16 of the Securities Exchange Act of 1934, and the rules and regulations thereunder (the "1934 Act"), specifically approve (i) the assumption by Parent of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, Options and (ii) with respect the issuance of Parent Common Stock in the Merger to any Company Stock Option granted under the TARSOPdirectors, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form officers and substance satisfactory to Parent, and (2) shall not require any action which violates any stockholders of the Company Stock Option Plans. As subject to Section 16 of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP1934 Act.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase Shares shares of Company Common Stock (a "Company Stock Option") and each outstanding stock appreciation right (a "Company SAR") issued under the Company's Amended and Restated 1987 Stock Option Plan pursuant to any incentive or stock option program of Company (the "1987 Company Plan"), whether vested or unvested, shall be assumed by Merger Partner, provided that the 1989 Time Accelerated Restricted Stock Option Plan (foregoing shall not apply to options or stock appreciation rights assumed by Spinco pursuant to the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") Distribution Agreement and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "such options and stock appreciation rights assumed by Spinco shall not constitute Company Stock Option Plans") shall terminate and be canceled and each holder Options or Company SARs for purposes of a this Agreement. Each Company Stock Option shall be entitled deemed to receiveconstitute an option to acquire, in consideration thereforon the same terms and conditions as were applicable under such Company Stock Option, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) number of shares of Merger Partner Common Stock equal to the product of (a) the excess, if any, of (x) the Merger Consideration over number of shares of Company Common Stock covered by such Company Stock Option, multiplied by (y) the Option Adjustment Ratio, at a price per Share share equal to (A) the exercise price of such Company Stock OptionOption immediately prior to the Spin-off, times multiplied by (bB) (1) one divided by (2) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net Option Adjustment Ratio; provided, however, that in the case of any required withholding taxes. Notwithstanding the foregoing, any Director option to which Section 421 of the Company who is not also an employee Code applies by reason of its qualification under Section 422 of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct Code ("incentive stock options"), the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption price, the number of Shares subject shares purchasable pursuant to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable as determined in order to comply with Section 424(a) of the Effective DateCode. For purposes of the foregoing, the "Option Adjustment Ratio" shall mean the amount obtained by dividing (i) the average of the daily high and low trading prices on the New York Stock Exchange for the Company Common Stock on each of the 20 trading days prior to the ex-dividend date for the Spin-off by (ii) the average of the daily high and low trading prices on the New York Stock Exchange for the Merger Partner Common Stock on each of the same 20 trading days. Each holder of a Company SAR shall be entitled to that number of stock appreciation rights of Merger Partner ("Merger Partner SARs"), determined in the same manner as set forth above with respect to any Company Stock Option granted under Options assumed by Merger Partner. At the TARSOPEffective Time, the Director Plan agreements evidencing the grants of Company Stock Options and Company SARs assumed by Merger Partner shall be amended to provide that the right of a holder to exercise Company Stock Options and Company SARs shall continue beyond the termination of such holder's employment, if such holder's employment is terminated without Cause or such holder leaves employment for Good Reason (as such terms are defined in the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject change of control policy as in effect immediately prior to the obtaining Effective Time or, if applicable, such holder's employment agreement or change of any necessary consents control severance agreement), until the later of optionees to (x) the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As second anniversary of the Effective Time, each (y) 90 days after such holder's termination of employment, and (z) the end of the period for exercise of such Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force Options or effect, and Company SARs as provided in any employment or severance agreement between the Company shall take and such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPholder.

Stock Options. As (a) The Company shall take all actions necessary to provide that all outstanding options to acquire shares of Company Common Stock ("Options") granted under any stock option plan, program or similar arrangement of the Company or any of its Subsidiaries, each as amended (the "Stock Option Plans"), shall become fully exercisable and vested immediately prior to the Effective Time whether or not otherwise exercisable and vested. The Company shall comply with the terms of the Stock Option Plans, as applicable, and, to the extent required thereunder, provide written notice to the holders of Options that such Options shall be treated as set forth herein. All Options which are outstanding immediately prior to the Effective Time shall be canceled and become null and void and the holders thereof shall be entitled to elect (1) to receive from the Company at the same times and in the same manner as the Company Stockholders pursuant to this Article III, for each Option to acquire one share of Company Common Stock, (A) an amount in cash equal to (x) the cash payable to the holder of one share of Company Common Stock pursuant to Section 3.2 assuming all Options had been exercised prior to the Effective Time minus (y) the exercise price per share of such Option (the "Exercise Difference"), plus (B) certificates representing that number of shares of Buyer Class A Common Stock which the holder of one share of Company Common Stock would have the right to receive pursuant to Sections 3.1 and 3.2 as adjusted as set forth in Section 3.3 hereof assuming all Options had been exercised prior to the Effective Time, each outstandingplus (C) Warrants in an amount issued to the holder of one share of Company Common Stock pursuant to Section 3.5, unexercised stock option plus (D) the right to purchase Shares receive the Contingent Additional Consideration that may be payable to the holder of one share of Company Common Stock pursuant to Section 3.4, or (2) if the Exercise Difference is negative, as a "Company Stock Option") issued under condition for receiving the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan")Buyer Class A Common Stock, the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") Warrants and the 1997 Stock Option Plan (right to receive the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Contingent Additional Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment clause (1) above, to pay such difference in cash to the Company on or before the Closing Date. All applicable withholding taxes attributable to the payments made hereunder or to distributions contemplated hereby shall be subject to deducted from the obtaining amounts payable under clause (A) above or by payment of any necessary consents of optionees to cash by the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and Option holder if amounts payable under clause (2A) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPare insufficient.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase Shares shares of Common Stock (a "Company Stock Option") issued under pursuant to any of the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") , whether vested or unvested, shall terminate and be canceled and each holder of a assumed by Sysco. Each Company Stock Option shall be entitled deemed to receiveconstitute an option to acquire, in consideration therefor, a cash payment from on the Company (which payment shall be made same terms and conditions as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of were applicable under such Company Stock Option, times (bi) the same number of whole shares of Sysco Common Stock as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time, (ii) at a price per share (rounded up to the nearest whole cent) equal to (A) the aggregate exercise price for the shares of Common Stock otherwise purchasable pursuant to such Company Stock Option divided by (B) the number of Eligible Shares (as defined below) subject whole shares of Sysco Common Stock deemed purchasable pursuant to such Company Stock Option. Such cash payment shall be net ; provided, however, that in the case of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted to which Section 421 of the Code applies by reason of its qualification under Section 422 of the 1987 PlanCode ("incentive stock options"), the option price, the number of Shares subject shares purchasable pursuant to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under and the TARSOP, the Director Plan or the 1997 Plan, the aggregate number terms and conditions of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation exercise of such Company Stock OptionsOption shall be determined in order to comply with Section 424(a) of the Code. As used herein, in form the term, "Company Stock Plan," shall mean and substance satisfactory refer to Parent, and (2as the context requires) shall not require any action which violates any of the Company's: (i) 1983 Stock Option Plan, (ii) 1993 Stock Option Plan and (iii) 1996 Long Term Incentive Plan, and the term "Company Stock Option Plans," shall mean and refer to all of such Plans collectively. As Options which qualified as incentive stock options prior to the Effective Time continue to qualify as incentive stock options of Sysco after the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. As (a) The Company shall take all actions necessary to provide that all outstanding options to acquire shares of Company Common Stock ("Options") granted under any stock option plan, program or similar arrangement of the Company or any of its Subsidiaries, each as amended (the "Stock Option Plans"), shall become fully exercisable and vested immediately prior to the Effective Time whether or not otherwise exercisable and vested. The Company shall comply with the terms of the Stock Option Plans, as applicable, and, to the extent required thereunder, provide written notice to the holders of Options that such Options shall be treated as set forth herein. All Options which are outstanding immediately prior to the Effective Time shall be canceled and become null and void and the holders thereof shall be entitled to elect (1) to receive from the Company at the same times and in the same manner as the Company Stockholders pursuant to this Article III, for each Option to acquire one share of Company Common Stock, (A) an amount in cash equal to (x) the cash payable to the holder of one share of Company Common Stock pursuant to Section 3.2 assuming all Options had been exercised prior to the Effective Time minus (y) the exercise price per share of such Option (the "Exercise Difference"), plus (B) certificates representing that number of shares of Buyer Class A Common Stock which the holder of one share of Company Common Stock would have the right to receive pursuant to Sections 3.1 and 3.2 as adjusted as set forth in Section 3.3 hereof assuming all Options had been exercised prior to the Effective Time, each outstandingplus (C) Warrants in an amount issued to the holder of one share of Company Common Stock pursuant to Section 3.5, unexercised stock option plus (D) the right to purchase Shares receive the Contingent Additional Consideration that may be payable to the holder of one share of Company Common Stock pursuant to Section 3.4, or (2) if the Exercise Difference is negative, as a "condition for receiving the Buyer Class A Common Stock, the Warrants and the right to receive the Contingent Additional Consideration under clause (1) above, to pay such difference in cash to the Company Stock Option"on or before the Closing Date. All applicable withholding taxes attributable to the payments made hereunder or to distributions contemplated hereby shall be deducted from the amounts payable under clause (A) issued above or by payment of cash by the Option holder if amounts payable under the Company's Amended and Restated 1987 clause (A) are insufficient. (b) The Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") Plans shall terminate and be canceled and each holder of a Company Stock Option shall be entitled immediately prior to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPSection 3.8.

Stock Options. As of At the Effective Time, each outstandingoption (each, unexercised stock option a “Merged Corporation Option”) granted by the Merged Corporation to purchase Merged Shares (a "Company pursuant to the Merged Corporation’s 1998 Management Incentive Stock Option") issued under Option Plan, the Company's Amended and Restated 1987 1999 Director’s Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option 2003 Equity Compensation Plan (the "1997 Plan") (collectively, the "Company Stock “Merged Corporation Option Plans") shall terminate ”), issued and be canceled and each holder of a Company Stock outstanding at the Effective Time under the Merged Corporation Option Plans, shall be entitled converted into and become options to receivepurchase Parent Stock. Parent shall assume each Merged Corporation Option in accordance with the terms and conditions of the Merged Corporation Option Plan pursuant to which it was issued, in consideration thereforthe agreements of evidencing grants thereunder and any other agreements between the Merged Corporation and an optionee regarding Merged Corporation Options; provided, however, that any agreement providing for a cash tax payment from the Company (which payment to an optionee upon exercise shall be made as soon as practicable after amended prior to the Effective Date to remove such tax payment provision if each option subject to such agreement shall not have been exercised prior to the Effective Time) equal to the product of (a) the excess; and, if anyprovided, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Optionfurther however, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment that from and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of after the Effective Time, each such Merged Corporation Option shall be exercisable solely for Parent Stock; the number of shares of Parent Stock which may be acquired pursuant to such Merged Corporation Option shall be the number of Merged Shares subject to such Merged Corporation Option multiplied by the Exchange Ratio, rounded down to the nearest whole share; and the exercise price per Merged Share shall be equal to the exercise price per Merged Share divided by the Exchange Ratio, rounded down to the nearest cent. It is intended that the foregoing assumption and adjustment shall be effected in a manner consistent with the requirements of Section 424 of the Company Stock Code, as to each Merged Corporation Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPwhich is an incentive stock option.

Stock Options. As of At the Effective Time, each outstandingunexercised and unexpired Company Option then outstanding under any Company Stock Option Plan or otherwise, unexercised stock whether or not then exercisable, shall be converted into an option to purchase Shares (a "Parent Common Stock in accordance with this Section 2.4; provided, however, that with respect to any such Company Stock Option") issued Options granted under the Company's Amended ’s Rules of Approved Executive Share Option Sub-Scheme and Restated 1987 the Company’s Rules of Unapproved Share Option Sub-Scheme For Employees (the “UK Stock Option Plans”), (i) Parent shall use commercially reasonable efforts to obtain the consent of the holders of such Company Options to such conversion and (ii) each such Company Option so converted shall satisfy the requirements set forth in the UK Stock Option Plans applicable to such conversion; provided, further that to the extent any Company Options have been issued pursuant to agreements that have not been documented in writing, or that have been documented but not provided to Parent, the Company shall use commercially reasonable efforts to obtain the consents of the holders of such Company Options to such conversion; provided, further that the Company and Parent agree to cooperate to restructure such conversion of Company Options held by holders who are not United States residents to the extent necessary or desirable in order to accommodate local legal or tax considerations. Each Company Option so converted shall have, and be subject to, the same terms and conditions (including vesting schedule) as set forth in the applicable Company Stock Option Plan and any agreements thereunder (or if issued other than pursuant to a Company Stock Option Plan, pursuant to the agreement that governs its issuance) immediately prior to the Effective Time and, to the extent allowable under applicable Law and the terms of the Company Stock Option Plan (the "1987 Plan"or such other agreement), the 1989 Time Accelerated Restricted Stock Option Plan terms and conditions of (i) the "TARSOP"Employment Agreements, (ii) the executive transition assistance plan (substantially in the form provided to the Company by Parent on the date hereof), (iii) the 1993 Stock Option Plan for Non-Employee Directors employee transition assistance plan (substantially consistent with the "Director Plan"terms and conditions set forth in the term sheet delivered to the Company by Parent on the date hereof) that Parent will adopt prior to the Effective Time (together, the “Transition Assistance Plans”) and the 1997 Stock Option Plan (the "1997 Plan"iv) Schedule C, except that (collectively, the "x) each Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, exercisable (or shall become exercisable in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Timeaccordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of (a) the excessnumber of shares that were issuable upon exercise of such Company Option immediately prior to the Effective Time multiplied by the Exchange Ratio, if any, rounded down to the nearest whole number of (x) the Merger Consideration over shares of Parent Common Stock and (y) the per Share share exercise price for the shares of Parent Common Stock issuable upon exercise of such Company Option so converted shall be equal to the quotient determined by dividing the exercise price per share of Company Common Stock Optionat which such Company Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, times (b) rounded up to the nearest whole cent. The conversion of any Company Options which are “incentive stock options,” within the meaning of Section 422 of the Code, into options to purchase Parent Common Stock shall be made so as not to constitute a “modification” of such Company Options within the meaning of Section 424 of the Code. Continuous employment with the Company or any Company Subsidiary shall be credited to the optionee for purposes of determining the vesting of all converted Company Options after the Effective Time. In addition to the foregoing, Parent shall assume each Company Stock Option Plan and the number and kind of Eligible Shares (as defined below) subject to shares available for issuance under each such Company Stock Option. Such cash payment Option Plan shall be net converted into shares of any required withholding taxes. Notwithstanding Parent Common Stock in accordance with the foregoing, any Director provisions of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any applicable Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. As of the Effective TimeAll options and warrants to acquire Company Common Stock (individually, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option" and collectively, the "Company Options") issued outstanding at the Effective Time under the Company's Amended and Restated 1987 1992 Stock Option Plan, the Company's 1995 Stock Option Plan or otherwise (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate remain outstanding following the Effective Time. At the Effective Time, such Company Options, by virtue of the Merger and be canceled and each without any further action on the part of the Company or the holder of such Company Options, shall be assumed by Watsxx xx such manner that Watsxx (x) is a corporation (or a parent or a subsidiary corporation of such corporation) "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code; or (b) to the extent that Section 424 of the Code does not apply to any such Company Options, would be such a A-2 3 corporation (or a parent or a subsidiary corporation of such corporation) were Section 424 applicable to such option. Each Company Option assumed by Watsxx xxxll be exercisable upon the same terms and conditions as under the applicable Company Stock Option Plan and the applicable option agreement issued thereunder, except that (x) the unexercised portion of each such Company Option shall be entitled exercisable for that whole number of shares of Watsxx Xxxmon Stock (rounded to receivethe nearest whole share, with 0.5 rounded upward) equal to the number of shares of Company Common Stock subject to the unexercised portion of such Company Option multiplied by the Exchange Ratio; and (y) the option exercise price per share of Watsxx Xxxmon Stock shall be an amount equal to the option exercise price per share of Company Common Stock subject to such Company Option in consideration thereforeffect at the Effective Time divided by the Exchange Ratio (the option price per share, a cash payment from as so determined, being rounded to the Company (which nearest full cent, with $0.005 rounded upward). No payment shall be made for fractional interests. The term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Code, if applicable, and all of the other terms of the Company Options shall otherwise remain unchanged unless modified by or as a result of the transaction contemplated by this Agreement. As soon as practicable after the Effective Time) equal , Watsxx xxxll deliver to the product holders of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of Company Options appropriate notices setting forth such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject holders' rights pursuant to such Company Stock Option. Such cash payment shall be net Options, as amended by this Section 1.5 as well as notice of any required withholding taxes. Notwithstanding the foregoing, any Director Watsxx'x xxxumption of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) Company's obligations with respect thereto (which occurs by virtue of this Agreement). Watsxx xxxll take all corporate actions necessary to any Company Stock Option granted under the 1987 Plan, the reserve for issuance such number of Shares subject shares of Watsxx Xxxmon Stock as will be necessary to such option as to which such option shall then be vested and exercisable as satisfy exercises in full of the Effective Date, and (ii) with respect to any all Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of Options after the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP. 1.6.

Stock Options. As (a) At the Effective Time, each outstanding and unexercised option to purchase shares of Company Common Stock (a “Company Option”) issued pursuant to the Prab Robots, Inc. 1988 Stock Option Plan, the Prab, Inc. 1999 Stock Option Plan, the Prab, Inc. 2000 Stock Option Plan of the Company or otherwise (collectively, the “Company Option Plans”), the per share exercise price of which Company Option is less than the Merger Consideration (a “Cashed-Out Company Option”), shall be converted into the right of the holder thereof to receive, in full satisfaction of each Cashed-Out Company Option, the “Cash Amount” with respect to such Cashed-Out Company Option, less any required withholding taxes. The “Cash Amount” for any Cashed-Out Company Option shall equal the product of: (1) the excess of the Merger Consideration over the exercise price per share of Company Common Stock of such Cashed-Out Company Option and (2) the number of shares of Company Common Stock issuable upon the exercise of such Cashed-Out Company Option. The Company shall take all reasonable actions necessary to cause the holders of Company Options to consent, to the extent required, to the transactions contemplated by this Section 1.7 no later than immediately prior to the Effective Time and shall facilitate the net exercise of Cashed-Out Company Options so as to enable the holders thereof to receive the Cash Amount in respect thereof without first paying the exercise price thereof. Except as may be otherwise agreed to by Parent and the Company, as of the Effective Time, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option"A) issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company Option Plans shall terminate, (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (aB) the excessprovisions in any other plan, if any, of (x) program or arrangement providing for the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net issuance or grant of any required withholding taxes. Notwithstanding other interest in respect of the foregoing, any Director capital stock of the Company who is not also an employee shall be deleted and (C) no holder of Company Options or any participant in the Company Option Plans or any other plans, programs or arrangements shall have any rights thereunder to acquire any shares of capital stock of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct or the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax paymentSurviving Corporation. The term "Eligible Shares" shall mean, (i) Company and Parent agree that the Cash Amounts are the sole payments that will be made with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject in relation to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. As of At the Effective Time, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject outstanding immediately prior thereto shall be converted into and represent the right to receive (a) the Merger Consideration into which the share or shares of Company Common Stock issuable upon exercise of such Company Option would have been converted if such Company Option had been exercised immediately prior to the Effective Time, reduced by (b) (i) the aggregate exercise price for the shares of Company Common Stock then issuable upon exercise of such Company Option and (ii) the amount of any withholding taxes which may be required thereon (such reductions to be applied on a pro rata basis against the Cash Consideration and the Stock Consideration comprising such Merger Consideration, in the respective proportions which such Cash Consideration and Stock Consideration bear to such Merger Consideration). All such Company Options shall no longer be outstanding and shall automatically be cancelled, retired and extinguished and shall cease to exist, and each Option Certificate shall thereafter represent the right to receive, upon surrender of such Option Certificate in accordance with Section 2.3, the Merger Consideration into which such Company Options have been converted in accordance herewith. The holders of Option Certificates shall cease to have any rights with respect thereto, except as required by law. No fractional share of Parent Common Stock Option. Such shall be issued and, in lieu thereof, a cash payment shall be net of any required withholding taxes. Notwithstanding made in the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred same manner as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (iSection 2.3(e) with respect to exchanges of Stock Certificates. No interest will be paid or will accrue on any Merger Consideration (except as specified in Section 2.1(a)(i)), any cash in lieu of fractional shares of Parent Common Stock or any unpaid dividends or distributions in respect of Parent Common Stock payable upon surrender of Option Certificates pursuant to this Article II. From and after the date of this Agreement, the Company shall not permit any additional options to purchase shares of Company Common Stock Option to be issued or granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force stock option plans or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPotherwise.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase Shares (a each "Company Stock OptionCOMPANY STOCK OPTION" and, collectively, "COMPANY STOCK OPTIONS") issued under pursuant to the Company's Amended and Restated 1987 Stock Option Plan (the "1987 1994 Long-Term Incentive Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (Directors' Stock Plans, or other agreement or arrangement, whether vested or unvested, shall be converted as of the "Director Plan") and the 1997 Effective Time into options to purchase shares of Parent Common Stock Option Plan (the "1997 Plan") (collectively, the "in accordance with this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option Planshas been issued or may be issued are referred to collectively as the ") shall terminate and be canceled and COMPANY PLANS." At the Effective Time, each holder of a Company Stock Option shall be entitled deemed to receiveconstitute an option to acquire, on the same terms and conditions (but taking into account any changes thereto, including any acceleration in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product vesting or exercisability of (a) the excess, if any, such option by reason of (x) this Agreement or the Merger Consideration over (yor the transactions or matters contemplated by this Agreement provided for in such option or the applicable plan with respect thereto) the per Share exercise price of as were applicable to such Company Stock Option, times a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time, rounded down to the nearest whole share, at a price per share equal to (bi) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (ii) the product of (A) the number of Eligible Shares (as defined below) subject otherwise purchasable pursuant to such Company Stock Option. Such cash payment shall be net Option multiplied by (B) the Exchange Ratio, rounded up to the nearest cent; provided, however, that in the case of any required withholding taxes. Notwithstanding the foregoing, any Director option to which Section 421 of the Company who is not also an employee Code applies by reason of its qualification under Section 422 of the Company Code ("INCENTIVE STOCK OPTIONS" or "ISOS") Parent may make any payment of any taxes incurred as a result of receipt of such cash payment and direct cause the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption price, the number of Shares subject shares purchasable pursuant to such option and the terms and conditions of exercise of such option to be determined so as to which such option shall then be vested and exercisable as comply with Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase Shares (a each "Company Stock OptionCOMPANY STOCK OPTION" and, collectively, "COMPANY STOCK OPTIONS") issued under pursuant to the Company's Amended and Restated 1987 1995 Stock Plan, 2001 Incentive Stock Plan, 2001 Employee Stock Purchase Plan, 2002 Nonstatutory Stock Option Plan, Altius 1999 Plan (or other agreement or arrangement, whether vested or unvested, shall be converted as of the "1987 Plan"), the 1989 Effective Time Accelerated Restricted into options to purchase shares of Parent Common Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "in accordance with this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option Planshas been issued or may be issued are referred to collectively as the ") shall terminate and be canceled and COMPANY PLANS." At the Effective Time, each holder of a Company Stock Option shall be entitled deemed to receiveconstitute an option to acquire, in consideration therefor, a cash payment from on the Company same terms and conditions (which payment shall be made including but not limited to vesting schedule) as soon as practicable after the Effective Time) equal were applicable to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time at a price per share equal to (bx) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Eligible Shares (as defined below) subject otherwise purchasable pursuant to such Company Stock Option. Such cash payment shall be net Option multiplied by (ii) the Exchange Ratio, rounded down to the nearest cent; provided, however, that in the case of any required withholding taxes. Notwithstanding the foregoing, any Director option to which Section 421 of the Company who is not also an employee Code applies by reason of its qualification under Section 422 of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct Code ("INCENTIVE STOCK OPTIONS" or "ISOS") the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption price, the number of Shares subject shares purchasable pursuant to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable determined so as to comply with Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of At the Effective Time, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option") issued under the Company's Amended obligations with respect to each outstanding Option, whether vested or unvested, shall, by virtue of this Agreement and Restated 1987 Stock Option Plan (without any further action of the "1987 Plan")Company, Parent or the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of any Option, be assumed by Parent. Unless otherwise elected by Parent prior to the Effective Time, Parent shall make such assumption in such manner that Parent (i) is a Company Stock Option shall corporation "assuming a stock option in a transaction to which Section 424(a) applies" within the meaning of Section 424 of the Code or (ii) to the extent that Section 424 of the Code does not apply to such Option, would be entitled such a corporation were Section 424 of the Code applicable to receivesuch Option; and, in consideration thereforif not so otherwise elected, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time, all references to the Company in the Stock Option Plans and the applicable stock option agreements shall be deemed to refer to Parent, which shall have assumed the Stock Option Plans as of the Effective Time by virtue of this Agreement and without any further action. Each Option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the applicable Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such Option will be exercisable for that number of shares of Parent Common Stock equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) shares of Company Common Stock that were purchasable under such Option immediately prior to the Effective Time multiplied by 1.0, subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding adjustment in the foregoingmanner provided for in Section 2.06(e), any Director of rounded up to the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the nearest whole number of Shares subject to such option as to which such option shall then be vested and exercisable as shares of the Effective DateParent Common Stock, and (ii) with respect the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Option will be equal to any the quotient determined by dividing the exercise price per share of Company Common Stock at which such Option granted under was exercisable immediately prior to the TARSOPEffective Time by 1.0, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject adjustment in the manner provided for in Section 2.06(e), and rounding the resulting exercise price up to the obtaining nearest whole cent. Parent shall use its best efforts to ensure, that Options intended to qualify as incentive stock options under Section 422 of any necessary consents of optionees the Code prior to the cancellation of such Company Stock Options, in form and substance satisfactory Effective Time continue to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of so qualify after the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. As of (a) At or immediately prior to the Effective Time, each outstanding, unexercised employee stock option or director stock option to purchase Shares outstanding under any Company stock option plans, whether or not vested or exercisable (each, a "Company Stock Option") issued shall, by virtue of the Merger and without any further action on the part of any holder thereof, be assumed by Parent and deemed to constitute an option (each, a "Parent Option") to acquire, on the same terms and conditions as were applicable under the Company's Amended and Restated 1987 Stock such Company Option Plan (the "1987 Plan"subject to Section 3.04(b)), the 1989 same number of shares of Parent Common Stock as the holder of such Company Option would have been entitled to receive pursuant to Section 3.02(c) of this Agreement had such holder exercised such Company Option in full immediately prior to the Effective Time Accelerated Restricted Stock Option Plan (rounded to the "TARSOP"nearest whole number), at a price per share (rounded down to the 1993 nearest whole cent) equal to (x) the aggregate exercise price for the share of Company Common Stock otherwise purchasable pursuant to such Company Option Plan for Non-Employee Directors divided by (y) the "Director Plan") number of whole shares of Parent Common Stock purchasable pursuant to the Parent Option in accordance with the foregoing. The other terms of each such Company Option, and the 1997 Stock Option Plan plans under which they were issued, shall continue to apply in accordance with their terms. (b) Prior to the "1997 Plan") (collectivelyEffective Time, the "Company Stock Option Plans"shall use its reasonable best efforts to (i) shall terminate obtain any consents from holders of Company Options and be canceled and each (ii) make any amendments to the terms of such Company Options or Company stock option plans that, in the case of either clauses (i) or (ii), are necessary or appropriate to give effect to the transactions contemplated by Section 3.04(a); provided, however, that lack of consent of any holder of a Company Option shall in no way affect the obligations of the parties to consummate the Merger. (c) At or prior to the Effective Time, Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock Option for delivery upon exercise of the Parent Options. At or prior to the Effective Time, Parent shall file a registration statement on Form S-8, with respect to the shares of Parent Common Stock subject to such Parent Options and shall use commercially reasonable efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such Parent Options remaining outstanding. With respect to those individuals who subsequent to the Merger will be subject to the reporting requirements under Section 16(a) of the Exchange Act, Parent shall administer the Company stock option plans in a manner consistent with the exemptions provided by Rule 16(b)(3) promulgated under the Exchange Act. Section 3.05. Withholding Rights Each of the Surviving Corporation and Parent shall be entitled to receive, in consideration therefor, a cash payment deduct and withhold from the Company (which payment shall be made consideration otherwise deliverable to any Person pursuant to this Article 3 such amount as soon as practicable after the Effective Time) equal it is required to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment deduct and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation making of such Company Stock Optionsdelivery under any provision of federal, in form and substance satisfactory to Parentstate, and (2) shall not require any action which violates any of the Company Stock Option Planslocal or foreign tax law. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in If the Surviving Corporation under or Parent, as the case may be, so withholds amounts, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Common Stock Option Plans in respect of which the Surviving Corporation or the ESPPParent made such deduction and withholding.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued under pursuant to the Company's Amended and Restated 1987 1988 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted 1990 Stock Option Plan (the "TARSOP")Plan, the 1993 1992 Key Executive Stock Option Plan for Non-Plan, 1993 Employee Directors (the "Director Qualified Stock Purchase Plan") and the , 1996 Supplemental Stock Plan, as amended, 1997 Stock Option Plan (Plan, as amended, 1994 Outside Director Stock Option Plan, Key Executive Stock Option Plan, SpeedSim, Inc. 1995 Incentive and Nonqualified Stock Option Plan, or other agreement or arrangement, whether vested or unvested, shall be converted as of the "1997 Plan") (collectivelyEffective Time into options or warrants, as applicable, to purchase shares of Parent Common Stock in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued other than outstanding warrants are referred to collectively as the "Company Stock Option Plans") shall terminate and be canceled and each holder of a ." Each Company Stock Option shall be entitled deemed to receiveconstitute an option to acquire, in consideration therefor, a cash payment from on the Company (which payment shall be made same terms and conditions as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of were applicable under such Company Stock Option, times a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock that the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (bx) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Stock Option divided by (y) the product of (i) the number of Eligible Shares (as defined below) subject otherwise purchasable pursuant to such Company Stock Option. Such cash payment shall be net , multiplied by (ii) the Exchange Ratio; PROVIDED, HOWEVER, that in the case of any required withholding taxes. Notwithstanding the foregoing, any Director option to which Section 421 of the Company who is not also an employee Code applies by reason of its qualification under Section 422 of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct Code ("incentive stock options" or "ISOs") the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Planoption price, the number of Shares subject shares purchasable pursuant to such option as to which and the terms and conditions of exercise of such option shall then be vested and exercisable as determined in order to comply with Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of (a) At the Effective Time, each outstandingoption, unexercised stock option to purchase Shares whether vested or unvested (a "Company Stock Option") issued ), that is then outstanding under any of the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") Plans (collectively, the "Company Stock Option PlansPlan") shall terminate automatically and be canceled and each without further action by the holder of a Company Stock Option become fully vested and shall be entitled assumed by Parent in accordance with the terms (as in effect on the date hereof) of the Stock Plan and the stock option agreement, if any, by which such Company Option is evidenced. All rights with respect to receiveCompany Common Stock under outstanding Company Options shall thereupon be converted, in consideration thereforsubject to the provisions hereof, a cash payment from the Company (which payment shall be made as soon as practicable into rights with respect to Parent Class A Common Stock. From and after the Effective Time, (i) equal to each Company Option assumed by Parent (collectively, the product "Assumed Options") may be exercised solely for shares of Parent Class A Common Stock, (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (bii) the number of Eligible Shares (as defined below) shares of Parent Class A Common Stock subject to each such Assumed Option shall be equal to the number of shares of Parent Class A Common Stock which the holder of such Assumed Option would have received pursuant to Section 1.5, without giving effect to any adjustment to the Share Consideration pursuant to Section 1.5(f), in exchange for the shares of Company Common Stock subject to such Company Assumed Option if such Assumed Option had been exercised immediately prior to the Effective Time, (iii) the per share exercise price for the Parent Class A Common Stock Option. Such cash payment issuable upon exercise of each such Assumed Option shall be net determined by dividing the exercise price per share of Company Common Stock subject to such Assumed Option, as in effect immediately prior to the Effective Time, by a fraction the numerator of which is the number of shares of Parent Class A Common Stock subject to such Assumed Option immediately after the Effective Time, and the denominator of which is the number of shares of Company Common Stock subject to such Assumed Option immediately prior to the Effective Time, and rounding the resulting exercise price up to the nearest whole cent, and (iv) all restrictions on the exercise of each such Assumed Option shall continue in full force and effect and the term, exercisability, status as an incentive or nonqualified option, and other provisions of such Company Option, except the vesting schedule, shall otherwise remain unchanged; provided, however, that each such Assumed Option shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any required withholding taxesstock split, reverse stock split, stock dividend, recapitalization or other similar transaction effected by Parent after the Effective Time but without giving effect to any adjustment to the Share Consideration pursuant to Section 1.5(f). Notwithstanding the foregoing, any Director of the Company who is not also an employee of parties acknowledge that it may be necessary to amend the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not Parent's stock option plan to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, increase the number of Shares subject shares available for grant thereunder in order to such option permit the issuance of stock options as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effectcontemplated by this Section 1.11, and the provisions hereof are subject to shareholder approval of any such amendment. The Company and Parent shall take such all action as shall that may be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation (under the Company Stock Option Plans or Plan and otherwise) to effectuate the ESPPprovisions of this Section 1.11.

Stock Options. As of At the Effective Time, each outstandingunexercised and unexpired Company Option then outstanding under any Company Stock Option Plan or otherwise, unexercised stock whether or not then exercisable, shall be converted into an option to purchase Shares (a "Parent Common Stock in accordance with this Section 2.4; provided, however, that with respect to any such Company Stock Option") issued Options granted under the Company's Amended ’s Rules of Approved Executive Share Option Sub-Scheme and Restated 1987 the Company’s Rules of Unapproved Share Option Sub-Scheme For Employees (the “UK Stock Option Plans”), (i) Parent shall use commercially reasonable efforts to obtain the consent of the holders of such Company Options to such conversion and (ii) each such Company Option so converted shall satisfy the requirements set forth in the UK Stock Option Plans applicable to such conversion; provided, further that to the extent any Company Options have been issued pursuant to agreements that have not been documented in writing, or that have been documented but not provided to Parent, the Company shall use commercially reasonable efforts to obtain the consents of the holders of such Company Options to such conversion; provided, further that the Company and Parent agree to cooperate to restructure such conversion of Company Options held by holders who are not United States residents to the extent necessary or desirable in order to accommodate local legal or tax considerations. Each Company Option so converted shall have, and be subject to, the same terms and conditions (including vesting schedule) as set forth in the applicable Company Stock Option Plan and any agreements thereunder (or if issued other than pursuant to a Company Stock Option Plan, pursuant to the agreement that governs its issuance) immediately prior to the Effective Time and, to the extent allowable under applicable Law and the terms of the Company Stock Option Plan (the "1987 Plan"or such other agreement), the 1989 Time Accelerated Restricted Stock Option Plan terms and conditions of (i) the "TARSOP"Employment Agreements, (ii) the executive transition assistance plan (substantially in the form provided to the Company by Parent on the date hereof), (iii) the 1993 Stock Option Plan for Non-Employee Directors employee transition assistance plan (substantially consistent with the "Director Plan"terms and conditions set forth in the term sheet delivered to the Company by Parent on the date hereof) that Parent will adopt prior to the Effective Time (together, the “Transition Assistance Plans”) and the 1997 Stock Option Plan (the "1997 Plan"iv) Schedule C, except that (collectively, the "x) each Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, exercisable (or shall become exercisable in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Timeaccordance with its terms) for that number of whole shares of Parent Common Stock equal to the product of (a) the excessTable of Contents number of shares that were issuable upon exercise of such Company Option immediately prior to the Effective Time multiplied by the Exchange Ratio, if any, rounded down to the nearest whole number of (x) the Merger Consideration over shares of Parent Common Stock and (y) the per Share share exercise price for the shares of Parent Common Stock issuable upon exercise of such Company Option so converted shall be equal to the quotient determined by dividing the exercise price per share of Company Common Stock Optionat which such Company Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, times (b) rounded up to the nearest whole cent. The conversion of any Company Options which are “incentive stock options,” within the meaning of Section 422 of the Code, into options to purchase Parent Common Stock shall be made so as not to constitute a “modification” of such Company Options within the meaning of Section 424 of the Code. Continuous employment with the Company or any Company Subsidiary shall be credited to the optionee for purposes of determining the vesting of all converted Company Options after the Effective Time. In addition to the foregoing, Parent shall assume each Company Stock Option Plan and the number and kind of Eligible Shares (as defined below) subject to shares available for issuance under each such Company Stock Option. Such cash payment Option Plan shall be net converted into shares of any required withholding taxes. Notwithstanding Parent Common Stock in accordance with the foregoing, any Director provisions of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any applicable Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. As of (i) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase Company Shares (a "Company Stock Option") issued under the Company's Amended Company Stock Plans, whether -------------- vested or unvested, shall be converted to an option to acquire, on the same terms and Restated 1987 conditions as were applicable under such Company Option, the same number of shares of Parent Common Stock as the holder of such Company Option Plan would have been entitled to receive pursuant to the Merger had such holder exercised such Company Option in full immediately prior to the Effective Time (rounded down to the nearest whole number) (a "1987 PlanSubstitute Option"), at an exercise price per share ----------------- (rounded up to the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Timenearest whole cent) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share aggregate exercise price of for the Company Shares otherwise purchasable pursuant to such Company Stock Option, times Option divided by (bz) the number of Eligible Shares (as defined below) subject full shares of Parent Common Stock deemed purchasable pursuant to such Company Stock Option. Such cash payment shall be net of any required withholding taxesOption in accordance with the foregoing. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option each purchase right granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Company's Employee Stock Option granted under the TARSOP, the Director Purchase Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Supplemental Employee Stock Purchase Plan (the "ESPPPurchase Plans") that is outstanding at the Effective Time shall terminate --------- ----- be converted to a right to acquire upon the same terms and be of no further force or effect, and conditions as were applicable to such right immediately before the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfactionEffective Time, that no holder number of shares (rounded down to the nearest whole share) of Parent Common Stock equal to the Exchange Ratio multiplied by the number of Company Shares for which such purchase right would otherwise have been exercisable determined as of the relevant grant date under the applicable Purchase Plan at a purchase price per share equal to 85% of the lower of (A) the fair market value of a Company Share on the relevant grant date divided by the Exchange Ratio or (B) the fair market value of a share of Parent Common Stock Option or participant in on the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPrelevant purchase date.

Stock Options. As of At the Effective Time, (i) each outstanding, unexercised stock outstanding option to purchase Shares Seller Common Stock (a each, an "Company Stock Option") issued under the Companypursuant to Seller's Amended and Restated 1987 1996 Stock Option Plan (the "1987 Option Plan"), the 1989 Time Accelerated Restricted Stock Option Plan whether vested or unvested, shall be assumed by Buyer and shall constitute an option (the an "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director PlanAssumed Option") to acquire, on the same terms and the 1997 Stock conditions as were applicable under such Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled prior to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time, that number of shares of Buyer Common Stock (rounded down to the nearest whole number) determined by multiplying (A) the Common Exchange Ratio by (B) the number of shares of Seller Common Stock then subject to purchase pursuant to such Option, at a price per share (rounded up to the nearest $.001) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share aggregate exercise price for the shares of Seller Common Stock then subject to purchase pursuant to such Company Stock Option, times (b) divided by the number of Eligible Shares full shares of Buyer Common Stock deemed to be purchasable pursuant to such Assumed Option; provided, however, that, with respect to an Option to which Section 421 of the Code applies by reason of its qualification under Section 422 or 423 of the Code (as defined belowa "qualified stock option"), in no event shall the terms of any Assumed Option give the holder of a qualified stock option additional benefits that he or she did not have under such qualified stock option, (ii) any references in each such Assumed Option to Seller shall be deemed to refer to Buyer, where appropriate, and (iii) Buyer shall assume the Option Plan and any references in the Option Plan to Seller shall be deemed to refer to Buyer, where appropriate. To the extent necessary to register such shares, Buyer shall file on or prior to the date that is thirty (30) days after the Closing Date, and maintain the effectiveness of, a registration statement or registration statements on Form S- 8 with respect to the shares of Seller Common Stock subject to such Company Stock OptionAssumed Options for so long as such Assumed Options remain outstanding. Such cash payment Buyer shall be net of any required withholding taxes. Notwithstanding use reasonable efforts to take such actions as are necessary for the foregoing, any Director conversion of the Company who is not also an employee Assumed Options pursuant to this Section 1.7.5, including the reservation, issuance and listing of the Company may make any payment shares of any taxes incurred Buyer Common Stock as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be are necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in effectuate the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPtransaction contemplated by this Section 1.7.5.

Stock Options. As of the Effective TimeThe Company shall make, each outstanding, unexercised under such stock option to purchase Shares (a "Company Stock Option"plan(s) issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from as the Company (which payment shall may deem appropriate, annual grants of stock options to Founder with a minimum aggregate value of $300,000, or such greater amount as may be made as soon as practicable after determined by the Effective Time) equal to Compensation Committee. The specific terms of each such grant, including the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share grant date and exercise price of such Company Stock Optionstock options, times (b) will be determined by the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding Compensation Committee in accordance with the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt terms of such cash payment stock option plan and direct will be set forth in stock option agreements to be executed by the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans Founder and the Company's 1992 Employee Stock Purchase Plan . The value of the stock options shall be determined using the Black-Scholes method, the binomial options model or such other method reasonably acceptable to, and determined by, the Compensation Committee (provided that the timing of stock option grants and the methodology used to value such grants shall generally be substantially similar to that associated with stock options granted to the Company’s senior management or non-management directors during the same year). For the avoidance of doubt, in the event that the stock options granted under this Section 2 have been granted under a Company plan that provides for such grants to, inter alia, consultants to, or advisors of, the Company, and any of this Agreement, that certain Agreement for Service as Chairman (the "ESPP"“Chairman’s Agreement”) shall terminate of even date herewith between Founder and be the Company, or that certain License Agreement, dated as of no further force or even date herewith between Founder and the Company, is in effect, or Founder is otherwise serving as a consultant or advisor to the Company, for purposes of the applicable stock option plan and agreement related to such stock options granted hereunder, the Company shall take such action as Founder shall be necessary deemed to ensure, be providing services as a “consultant” or “advisor” to Parent's reasonable satisfaction, the Company; in the event that no holder of the stock options granted under this Section 2 have been granted under a Company Stock Option or participant plan that provides for such grants only to non-employee directors, for purposes of the applicable stock option plan and agreement related to such stock options granted hereunder, the Founder shall be deemed a non-employee director for so long as he is serving in such capacity on the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCompany’s board of directors.

Stock Options. As (a) Except as provided in (c) below with respect to the Company's 1997 Employee Stock Purchase Plan, as amended (the "Company ESPP"), each option to purchase shares of Company Common Stock that is outstanding at the Effective Time, each outstanding, unexercised stock option to purchase Shares whether or not exercisable and whether or not vested (a "Company Stock Option") issued under shall, without any action on the Company's Amended and Restated 1987 Stock Option Plan part of the Company or the holder thereof, be assumed by Parent in such manner that Parent (i) is a corporation "assuming a stock option in a transaction to which Section 424(a) applies" within the "1987 Plan"), meaning of Section 424 of the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") Code and the 1997 Stock Option Plan regulations thereunder or (ii) to the "1997 Plan") (collectivelyextent that Section 424 of the Code does not apply to any such Company Option, would be such a corporation were Section 424 of the "Code applicable to such Company Stock Option Plans") shall terminate Option. From and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time, all references to the Company in the Company Options shall be deemed to refer to Parent. The Company Options assumed by Parent shall be exercisable upon the same terms and conditions as under the Company Options (including provisions regarding vesting and the acceleration thereof) except that (i) such Company Options shall entitle the holder to purchase from Parent the number of shares of Parent Common Stock (rounded down to the nearest whole number of such shares) that equals the product of the Conversion Ratio multiplied by the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time, (ii) the option exercise price per share of Parent Common Stock shall be an amount (rounded up to the nearest full cent) equal to the product option exercise price per share of Company Common Stock in effect immediately prior to the Effective Time divided by the Conversion Ratio, and (aiii) the excess, if any, of (x) Company Options shall vest to the Merger Consideration over (y) extent required pursuant to the per Share exercise price current terms of such Company Stock Option, times (b) Options or other agreements as described in Section 1.7 of the number of Eligible Shares Company Disclosure Schedule (as defined below) ); provided that if such vesting of Company Options or other provisions with respect to the Company Options would jeopardize the Merger being accounted for as a "pooling of interests", then the Company shall, subject to Parent's written consent not to be unreasonably withheld, use reasonable best efforts to prevent such vesting or effect of other provisions. Except to the extent required pursuant to the current terms of such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director Options or other agreements as described in Section 1.7 of the Company who is Disclosure Schedule (as defined below), the Company shall not also an employee take any action to accelerate the vesting of any Company Options. Prior to the Effective Time, the Board of Directors of Parent shall, for purposes of Rule 16b-3(d)(1) promulgated under Section 16 of the Securities Exchange Act of 1934, and the rules and regulations thereunder (the "1934 Act"), specifically approve (i) the assumption by Parent of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, Options and (ii) with respect the issuance of Parent Common Stock in the Merger to any Company Stock Option granted under the TARSOPdirectors, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form officers and substance satisfactory to Parent, and (2) shall not require any action which violates any stockholders of the Company Stock Option Plans. As subject to Section 16 of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP1934 Act.

Stock Options. As of (a) At the Effective Time, each outstandingoutstanding option, unexercised stock option warrant or other right to purchase Shares (a "Company Stock OptionCOMPANY STOCK OPTION" or collectively, "COMPANY STOCK OPTIONS") issued under pursuant to the Company's Amended and Restated 1987 1992 Incentive Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted 1992 Nonqualified Stock Option Plan (the "TARSOP")Plan, the 1993 1997 Employee Stock Option Purchase Plan, 1997 Equity Incentive Plan, 1997 Employee Stock Purchase Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option United States Employees, 2003 J.D. Edwards & Company Equity Incentixx Xxxx, XXXcentric 2000 Equity Compensation Plan (the "1997 Plan") (collectivelyor other agreement or arrangement, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option whether vested or unvested, shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made converted as soon as practicable after of the Effective Time) equal Time into an option, warrant or right, as applicable, to the product purchase shares of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Parent Common Stock Option, times (b) the number of Eligible Shares (as defined below) subject in accordance with this Section 1.15. All plans or agreements described above pursuant to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to which any Company Stock Option granted under has been issued or may be issued other than outstanding warrants or rights are referred to collectively as the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of "COMPANY PLANS." At the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as to purchase one Share so converted shall be necessary deemed to ensureconstitute an option to acquire, on the same terms and conditions as were applicable to Parent's reasonable satisfaction, that no holder of a such Company Stock Option or participant as set forth in the ESPP will have any right applicable Company Plan and the agreement(s) evidencing the grant thereof immediately prior to acquire any interest the Effective Time, including provisions with respect to vesting, (i) a number of shares of Parent Common Stock equal to the Exchange Ratio and (ii) the Per Share Cash Amount, at the same exercise price as in effect prior to the Effective Time; provided, however, that in the Surviving Corporation case of any option to which Section 421 of the Code applies by reason of its qualification under Section 422 through Section 424 of the Company Stock Option Plans Code ("INCENTIVE STOCK OPTIONS" or "ISOS"), to the ESPPextent permitted by Applicable Law, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined so as to comply with Section 424(a) of the Code and it is the intention of the parties that such options will qualify as incentive stock options following the Effective Time.

Stock Options. As The Company has reserved 12,791,518 shares of Company Common Stock for issuance under the Effective Time, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) options with respect to any 7,996,132 shares of Company Common Stock Option granted under are outstanding as of the 1987 Plandate of this Agreement, the number 3,507,577 of Shares subject to such option as to which such option shall then be are fully vested and exercisable as of the Effective Datedate of this Agreement. Part 2.3(b) of the Disclosure Schedule accurately sets forth, and with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate total number of Shares shares of Company Common Stock that shall then be are or were subject to such option. The Company's obligation to make any Company Option; (iii) the date on which such cash payment (1) shall be subject to Company Option was granted and the obtaining of any necessary consents of optionees to the cancellation term of such Company Option; (iv) the vesting schedule and vesting commencement date of such Company Option (including the number of shares of Company Common Stock Optionssubject to such Company Option that are vested and unvested as of the date of this Agreement) and whether the vesting of such Company Option is subject to any acceleration in connection with the Merger, any termination of employment or separation from service, or any of the other transactions contemplated by this Agreement or otherwise; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; (vi) whether such Company Option is intended to qualify as an “incentive stock option” as defined in form Section 422 of the Code; and substance satisfactory (vii) whether such Company Option may be early-exercised; and (viii) the extent to Parentwhich such Company Option has been early exercised. Each grant of a Company Option was duly authorized no later than the date on which the grant of such Company Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, and the award agreement governing such grant (2if any) shall not require any action which violates any was duly executed and delivered by each party thereto and is in full force and effect, each such grant was made in accordance with the terms of the Company Stock Plan and all other applicable Legal Requirements, the per share exercise price of each Company Option Planswas more than or equal to the fair market value of a share of Company Common Stock on the applicable Grant Date as determined under Section 409A of the Code and each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company. All options with respect to shares of Company Common Stock that were ever issued by the Company ceased to vest on the date on which the holder thereof ceased to be an employee, consultant or director of an Acquired Entity. As of the Effective Time, each no former holder of a Company Option will have any rights with respect to any Company Option other than the rights contemplated by Section 1.6. The Company has delivered to Parent an accurate and complete copy of the Company Stock Plan, each form of agreement used thereunder and each Contract pursuant to which any Company Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPis outstanding.

Stock Options. (a) As soon as practicable following the date of this Agreement, but in any event not less than fifteen trading days prior to the Closing, the Board of Directors of the Effective TimeCompany (or, each outstandingif appropriate, unexercised stock option to purchase Shares (a "Company Stock Option") issued under any committee administering the Company's Amended and Restated 1987 1989 Non-Qualified Stock Option Plan (the "1987 NQSO Plan"), the 1989 Time Accelerated Restricted ) or 1996 Incentive Stock Option Plan (the "TARSOP"), ISO Plan," and together with the 1993 Stock Option Plan for Non-Employee Directors (the "Director NQSO Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate adopt such resolutions or take such other actions as may be required to adjust the terms of all outstanding Company Options (as defined in Section 3.03) issued pursuant to the Company Option Plans and related agreements, to provide that at the Effective Time, each Company Option outstanding (whether or not vested and exercisable) immediately prior to the Effective Time shall at the Effective Time cease to represent a right to acquire shares of Company Common Stock and shall be canceled converted automatically into an option (a "Continuing Option") to acquire Parent Common Stock in an amount and each at an exercise price determined as provided in the immediately following sentence (and on substantially the same terms and conditions as were applicable under such Company Option Plan and the agreements evidencing grants thereunder), subject to Section 1.02(b). At the Effective Time, if the holder of a Company Stock Option shall be entitled which is then outstanding and unexercised has not timely elected (with respect to receiveCompany Options granted under the NQSO Plan) or has not timely requested (with respect to Company Options granted under the ISO Plan; or if so requested, if such request has been denied by the Company) to receive cash for such Company Option as described in subsection (b) of this Section 1.02, then such Company Option shall, in consideration thereforaccordance with the provisions of the NQSO Plan or the ISO Plan, whichever is applicable, become a cash payment from Continuing Option to acquire (x) the Company (which payment shall be made as soon as practicable after the Effective Time) number of shares of Parent Common Stock equal to the product of (ai) the excess, if any, number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by (xii) the Merger Consideration over (a partial share shall be rounded down to the next lower whole share), with (y) the per Share an exercise price equal to the quotient of such Company Stock Option, times (bi) the number original exercise price per share (the "Original Exercise Price") of Eligible Shares (as defined below) Company Common Stock subject to such Company Stock Option. Such cash payment Option in effect immediately prior to the Effective Time divided by (ii) the Merger Consideration and rounding the exercise price thus determined to the nearest whole cent (a half cent shall be net rounded to the next higher whole cent). In the case of any required withholding taxes. Notwithstanding the foregoing, any Director Company Options intended to be incentive stock options (as defined in Section 422 of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 PlanCode), the exercise price, number of Shares shares of Parent Common Stock subject to such option as Continuing Option and terms and conditions or exercise of such Continuing Option shall be determined in order to which such option shall then be vested and exercisable as comply with the requirements of Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. (a) As soon as practicable following the date of this Agreement, Parent and the Company (or, if appropriate, any committee of the Effective Time, each outstanding, unexercised stock option to purchase Shares (a "Board of Directors of the Company Stock Option") issued under administering the Company's Amended and Restated 1987 Stock Option 1999 Equity Incentive Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director PlanCOMPANY OPTION PLAN") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of or any required withholding taxes. Notwithstanding the foregoing, any Director committee of the Board of Directors administering Parent's option plans) or any other Company who is not also an employee stock option plans shall take such action as may be required to effect the following provisions of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plansthis Section 2.2. As of the Effective Time, each option to purchase shares of Company Common Stock, including all options granted pursuant to the Company Option Plan, the Company's 1983 Stock Option Plan, 1986 Non-Employee Director Option Plan and 1992 Employee Stock Option Plan (each, a "COMPANY STOCK OPTION") which is then outstanding shall be assumed by Parent and converted into an option (or a new substitute option shall be granted) (an "ASSUMED STOCK OPTION") to purchase the number of shares of Parent Common Stock (rounded up to the nearest whole share) equal to (x) the number of shares subject to such option multiplied by (y) the Exchange Ratio, at an exercise price per share of Parent Common Stock (rounded down to the nearest pennx) xxual to (A) the former exercise price per share of Company Common Stock under such option immediately prior to the Effective Time divided by (B) the Exchange Ratio; provided, however, that in the case of any Company Stock Option Plans 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. Except as provided above, each Assumed Stock Option shall be subject to the same terms and conditions (including expiration date and vesting) as were applicable to such converted Company Stock Option immediately prior to the Company's 1992 Employee Stock Purchase Plan Effective Time. Parent shall use its reasonable best efforts to promptly prepare and file with the Securities and Exchange Commission (the "ESPPSEC") shall terminate a registration statement on Form S-8 or other appropriate form with respect to shares of Parent Common Stock subject to the Assumed Stock Options and be to maintain the effectiveness of no further force such registration statement or effect, registration statements covering such Assumed Stock Options (and maintain the Company shall take current status of the prospectus or prospectuses contained therein) for so long as such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Assumed Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPOptions remain outstanding.

Stock Options. As of (a) At or immediately prior to the Effective Time, each outstanding, unexercised employee stock option or director stock option to purchase Shares outstanding under any Company stock option plans, whether or not vested or exercisable (each, a "Company Stock Option") issued shall, by virtue of the Merger and without any further action on the part of any holder thereof, be assumed by Parent and deemed to constitute an option (each, a "Parent Option") to acquire, on the same terms and conditions as were applicable under the Company's Amended and Restated 1987 Stock such Company Option Plan (the "1987 Plan"subject to Section 3.04(b)), the 1989 same number of shares of Parent Common Stock as the holder of such Company Option would have been entitled to receive pursuant to Section 3.02(c) of this Agreement had such holder exercised such Company Option in full immediately prior to the Effective Time Accelerated Restricted Stock Option Plan (rounded to the "TARSOP"nearest whole number), at a price per share (rounded down to the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Timenearest whole cent) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over aggregate exercise price for the share of Company Common Stock otherwise purchasable pursuant to such Company Option divided by (y) the per Share exercise price number of whole shares of Parent Common Stock purchasable pursuant to the Parent Option in accordance with the foregoing. The other terms of each such Company Stock Option, times (b) and the number of Eligible Shares (as defined below) subject plans under which they were issued, shall continue to such Company Stock Option. Such cash payment shall be net of any required withholding taxesapply in accordance with their terms. Notwithstanding the foregoing, Parent shall not assume any Director particular Company Option if the terms of that Company Option contain a cash-out right in favor of the Company who optionee that is not also an employee triggered by the transactions contemplated by this Agreement and the optionee refuses to waive such cash-out right in a manner reasonably satisfactory to Parent. Instead, each such optionee shall be paid a cash amount in accordance with the terms of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees governing plan document in writing to indemnify the Company against any claim made against the Company exchange for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such said Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPOption.

Stock Options. As of (a) At the Effective Time, the obligation to issue shares under each outstanding, unexercised stock outstanding option to purchase Shares UNIDATA Common Stock (each a "Company Stock Option") issued granted under the CompanyUNIDATA's Amended and Restated 1987 1992 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") , 1994 Stock Option Plan, 1995 Stock Option Plan, 1996 Stock Option Plan, and the 1997 Stock Option Plan (the "1997 Plan") , each as amended (collectively, the "Company UNIDATA Stock Option Plans") and to former employees of O2 pursuant to the O2 Transaction, all of which shall terminate be fully vested and exercisable at the Effective Time pursuant to the terms of the applicable Stock Option, shall be canceled deemed assumed by VMARK and each such option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Stock Option prior to the Effective Time, the whole number (disregarding any fractional shares) of VMARK Common Stock as the holder of a Company such Stock Option shall be would have been entitled to receivereceive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time (not taking into account whether or not such option was in fact exercisable), at a price per share equal to (x) the aggregate exercise price for UNIDATA Common Stock otherwise purchasable pursuant to such Stock Option, divided by (y) the number of shares of VMARK Common Stock deemed purchasable pursuant to such Stock Option, provided, however, that the exercisability or the other vesting of the assumed options and the underlying stock shall continue to be determined by reference to stock option agreements executed pursuant to UNIDATA's Stock Option Plans, and provided, further, that references in consideration thereforany Stock Option to UNIDATA, the board of directors of UNIDATA or any committee thereof, and any UNIDATA Stock Option Plan shall, commencing at the Effective Time, unless inconsistent with the context, be to VMARK, the board of directors of VMARK or a cash payment from the Company committee thereof, and VMARK's 1986 Stock Option Plan (which payment shall be made as for officers) or 1995 Non-Statutory Option Plan (for non-officers), respectively. (b) As soon as practicable after the Effective Time) equal , VMARK shall deliver to each holder of an outstanding Stock Option an appropriate notice setting forth such holder's rights pursuant thereto and such Stock Option shall continue in effect on the same terms and conditions (including further anti-dilution provisions and subject to the product adjustments required by this Section 5.05 after giving effect to the Merger). VMARK shall comply with the terms of (a) all such Stock Options and ensure, to the excessextent required by, if anyand subject to the provisions of, of (x) any such UNIDATA Stock Plan that Stock Options which qualified for special tax treatment prior to the Merger Consideration over (y) Effective Time continue to so qualify after the per Share exercise price of such Company Stock Option, times (b) the Effective Time. VMARK shall take all corporate action necessary to reserve for issuance a sufficient number of Eligible Shares VMARK Common Stock for delivery pursuant to the terms set forth in this Section 5.05. (as defined belowc) subject VMARK shall use reasonable efforts after the Effective Time to such Company Stock Option. Such cash payment shall be net maintain the effectiveness of any required withholding taxes. Notwithstanding a registration statement under the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) Securities Act with respect to any Company the issuance by VMARK of shares of VMARK Common Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then may be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject issued pursuant to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, UNIDATA Options as provided for above in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plansthis Section 5.05. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.Section 5.06

Stock Options. (a) As soon as practicable following the date of this Agreement, but in any event not less than fifteen trading days prior to the Closing, the Board of Directors of the Effective TimeCompany (or, each outstandingif appropriate, unexercised stock option to purchase Shares (a "Company Stock Option") issued under any committee administering the Company's Amended and Restated 1987 1989 Non-Qualified Stock Option Plan (the "1987 NQSO Plan"), the 1989 Time Accelerated Restricted ) or 1996 Incentive Stock Option Plan (the "TARSOP"), ISO Plan," and together with the 1993 Stock Option Plan for Non-Employee Directors (the "Director NQSO Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate adopt such resolutions or take such other actions as may be required to adjust the terms of all outstanding Company Options (as defined in Section 3.03) issued pursuant to the Company Option Plans and related agreements, to provide that at the Effective Time, each Company Option outstanding (whether or not vested and exercisable) immediately prior to the Effective Time shall at the Effective Time cease to represent a right to acquire shares of Company Common Stock and shall be canceled converted automatically into an option (a "Continuing Option") to acquire Parent Common Stock in an amount and each at an exercise price determined as provided in the immediately following sentence (and on substantially the same terms and conditions as were applicable under such Company 2 Option Plan and the agreements evidencing grants thereunder), subject to Section 1.02(b). At the Effective Time, if the holder of a Company Stock Option shall be entitled which is then outstanding and unexercised has not timely elected (with respect to receiveCompany Options granted under the NQSO Plan) or has not timely requested (with respect to Company Options granted under the ISO Plan; or if so requested, if such request has been denied by the Company) to receive cash for such Company Option as described in subsection (b) of this Section 1.02, then such Company Option shall, in consideration thereforaccordance with the provisions of the NQSO Plan or the ISO Plan, whichever is applicable, become a cash payment from Continuing Option to acquire (x) the Company (which payment shall be made as soon as practicable after the Effective Time) number of shares of Parent Common Stock equal to the product of (ai) the excess, if any, number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by (xii) the Merger Consideration over (a partial share shall be rounded down to the next lower whole share), with (y) the per Share an exercise price equal to the quotient of such Company Stock Option, times (bi) the number original exercise price per share (the "Original Exercise Price") of Eligible Shares (as defined below) Company Common Stock subject to such Company Stock Option. Such cash payment Option in effect immediately prior to the Effective Time divided by (ii) the Merger Consideration and rounding the exercise price thus determined to the nearest whole cent (a half cent shall be net rounded to the next higher whole cent). In the case of any required withholding taxes. Notwithstanding the foregoing, any Director Company Options intended to be incentive stock options (as defined in Section 422 of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 PlanCode), the exercise price, number of Shares shares of Parent Common Stock subject to such option as Continuing Option and terms and conditions or exercise of such Continuing Option shall be determined in order to which such option shall then be vested and exercisable as comply with the requirements of Section 424(a) of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As (a) Parent and the Company shall take such commercially reasonable actions as are necessary to provide that (i) at the Effective Time each outstanding Company Stock Option (as defined in Section 3.2(a)) shall be adjusted in accordance with the terms thereof and this Agreement to be exercisable to purchase shares of Parent Common Stock as provided below and (ii) except as otherwise provided for in this Agreement or in option grants to non-employee directors of the Company, or as agreed to in writing by Parent, the vesting of exercisability of any Company Stock Option shall not be accelerated due to the Merger or this Agreement. Following the Effective Time, each outstanding, unexercised stock option to purchase Shares (a "Company Stock Option") issued under the Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans"shall continue to have, and shall be subject to, the same terms and conditions (including vesting and transfer restrictions) shall terminate and be canceled and set forth in the Company Option Plans (as defined in Section 3.2(a)) or any other agreement pursuant to which such Company Stock Option was subject immediately prior to the Effective Time, except that (i) each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) exercisable for that number of shares of Parent Common Stock equal to the product of (a) the excess, if any, of (x) the Merger Consideration over aggregate number of shares of the Company Common Stock for which such Company Stock Option was exercisable and (y) the Exchange Ratio, rounded down to the nearest whole share, if necessary, (ii) the per Share share exercise price of such Company Stock Option, times Option shall be the exercise price immediately prior to the Effective Time divided by the Exchange Ratio (brounded up to the nearest whole cent) and (iii) in the number of Eligible Shares event an optionee's (other than David Saperstein's) employment is terminated by the Surviving Corporxxxxx xx xxx xx xxs affiliates without "cause" (as defined belowin the optionee's option agreement) subject to such Company Stock Option. Such cash payment shall be net of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plans. As of within three years following the Effective Time, each Parent shall cause any unvested options held by the optionee which were granted pursuant to the Company Option Plans prior to the Effective Time to immediately vest. The adjustments provided herein to any options which are incentive stock options (as defined in Section 422 of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP"Code) shall terminate and be effected in a manner consistent with Section 424(a) of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPCode.

Stock Options. As of (a) At the Effective Time, each outstanding, unexercised stock outstanding option to purchase Shares (a "each “Company Stock Option"” and, collectively, “Company Stock Options”) issued under pursuant to the Company's Amended and Restated 1987 ’s 1998 Stock Option Plan (or any other agreement or arrangement, whether vested or unvested, shall be converted as of the "1987 Plan"), the 1989 Effective Time Accelerated Restricted into options to purchase shares of Parent Common Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "in accordance with this Section 2.11. All plans or agreements described above pursuant to which any Company Stock Option has been issued or may be issued are referred to collectively as the “Company Plans") shall terminate and be canceled and .” At the Effective Time, each holder of a Company Stock Option shall be entitled deemed to receiveconstitute an option to acquire, on the same terms and conditions (but taking into account any changes thereto, including any acceleration in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product vesting or exercisability of (a) the excess, if any, such option by reason of (x) this Agreement or the Merger Consideration over (yor the transactions or matters contemplated by this Agreement provided for in such option or the applicable plan with respect thereto) the per Share exercise price of as were applicable to such Company Stock Option, times (b) a number of shares of Parent Common Stock equal to the number of Eligible Shares (as defined below) shares of Company Common Stock subject to such Company Stock Option. Such cash payment shall be net Option immediately prior to the Effective Time, multiplied by the Exchange Ratio, rounded down to the nearest whole share, at a price per share of any required withholding taxes. Notwithstanding the foregoing, any Director of the Company who is not also an employee of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not Parent Common Stock equal to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect the per share exercise price for the shares of Company Common Stock otherwise purchasable pursuant to any such Company Stock Option granted divided by (ii) the Exchange Ratio, rounded up to the nearest cent; provided, however, that in the case of any option to Table of Contents which Section 421 of the Code applies by reason of its qualification under Section 422 of the 1987 PlanCode (“incentive stock options” or “ISOs”), Parent may cause the option price, the number of Shares subject shares purchasable pursuant to such option and the terms and conditions of exercise of such option to be determined so as to which such option shall then be vested and exercisable as comply with Section 424(a) of the Effective DateCode. Notwithstanding anything herein to the contrary, and (ii) with respect to any each Company Stock Option granted under issued to a non-employee director of the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares Company shall automatically be deemed amended so that shall then be subject to such option. The Company's obligation to make any such cash payment (1) non-employee director shall be subject entitled to the obtaining of any necessary consents of optionees to the cancellation of exercise such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any Option for a period of the Company Stock Option Plans. As of at least 90 days after the Effective Time, each of the Company Stock Option Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be of no further force or effect, and the Company shall take such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPP.

Stock Options. (a) As soon as practicable following the date of this Agreement, Parent and the Company (or, if appropriate, any committee of the Effective Time, each outstanding, unexercised stock option to purchase Shares (a "Board of Directors of the Company Stock Option") issued under administering the Company's Amended and Restated 1987 Stock Option 1999 Equity Incentive Plan (the "1987 Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993 Stock Option Plan for Non-Employee Directors (the "Director PlanCOMPANY OPTION PLAN") and the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option Plans") shall terminate and be canceled and each holder of a Company Stock Option shall be entitled to receive, in consideration therefor, a cash payment from the Company (which payment shall be made as soon as practicable after the Effective Time) equal to the product of (a) the excess, if any, of (x) the Merger Consideration over (y) the per Share exercise price of such Company Stock Option, times (b) the number of Eligible Shares (as defined below) subject to such Company Stock Option. Such cash payment shall be net of or any required withholding taxes. Notwithstanding the foregoing, any Director committee of the Board of Directors administering Parent's option plans) or any other Company who is not also an employee stock option plans shall take such action as may be required to effect the following provisions of the Company may make any payment of any taxes incurred as a result of receipt of such cash payment and direct the Company not to withhold any portion thereof, provided that any such Director agrees in writing to indemnify the Company against any claim made against the Company for the failure by such Director to make such tax payment. The term "Eligible Shares" shall mean, (i) with respect to any Company Stock Option granted under the 1987 Plan, the number of Shares subject to such option as to which such option shall then be vested and exercisable as of the Effective Date, and (ii) with respect to any Company Stock Option granted under the TARSOP, the Director Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject to such option. The Company's obligation to make any such cash payment (1) shall be subject to the obtaining of any necessary consents of optionees to the cancellation of such Company Stock Options, in form and substance satisfactory to Parent, and (2) shall not require any action which violates any of the Company Stock Option Plansthis Section 2.2. As of the Effective Time, each option to purchase shares of Company Common Stock, including all options granted pursuant to the Company Option Plan, the Company's 1983 Stock Option Plan, 1986 Non-Employee Director Option Plan and 1992 Employee Stock Option Plan (each, a "COMPANY STOCK Option") which is then outstanding shall be assumed by Parent and converted into an option (or a new substitute option shall be granted) (an "ASSUMED STOCK OPTION") to purchase the number of shares of Parent Common Stock (rounded up to the nearest whole share) equal to (x) the number of shares subject to such option multiplied by (y) the Exchange Ratio, at an exercise price per share of Parent Common Stock (rounded down to the nearest xxxxx) equal to (A) the former exercise price per share of Company Common Stock under such option immediately prior to the Effective Time divided by (B) the Exchange Ratio; provided, however, that in the case of any Company Stock Option Plans 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. Except as provided above, each Assumed Stock Option shall be subject to the same terms and conditions (including expiration date and vesting) as were applicable to such converted Company Stock Option immediately prior to the Company's 1992 Employee Stock Purchase Plan Effective Time. Parent shall use its reasonable best efforts to promptly prepare and file with the Securities and Exchange Commission (the "ESPPSEC") shall terminate a registration statement on Form S-8 or other appropriate form with respect to shares of Parent Common Stock subject to the Assumed Stock Options and be to maintain the effectiveness of no further force such registration statement or effect, registration statements covering such Assumed Stock Options (and maintain the Company shall take current status of the prospectus or prospectuses contained therein) for so long as such action as shall be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a Company Assumed Stock Option or participant in the ESPP will have any right to acquire any interest in the Surviving Corporation under the Company Stock Option Plans or the ESPPOptions remain outstanding.