Common use of Stock Options Clause in Contracts

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule).

Stock Options. As (a) At the Effective Time, each outstanding option or warrant to purchase Shares (a "Company Stock Option" or collectively "Company Stock Options") issued pursuant to the Company's 1988 Stock Option Plan, 1990 Stock Option Plan, 1992 Key Executive Stock Option Plan, 1993 Employee Qualified Stock Purchase Plan, 1996 Supplemental Stock Plan, as amended, 1997 Stock Option 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 close of business on February 13Effective Time into options or warrants, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) as applicable, to purchase shares of NPS Parent Common Stock are subject to issuance in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to outstanding NPS Options, (ii) no shares of NPS Common which any Company Stock are subject to issuance pursuant to outstanding options, rights Option has been issued or warrants to purchase NPS Common Stock may be issued other than pursuant outstanding warrants are referred to collectively as the NPS "Company Plans." Each Company Stock Option Plansshall be deemed to constitute an option to acquire, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the same terms and conditions specified in the instruments pursuant as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Parent Common Stock subject that the holder of such Company Stock Option would have been entitled to each receive pursuant to the Merger had such NPS Option; holder exercised such option or warrant in full immediately prior to the Effective Time at a price per share equal to (ivx) the aggregate exercise price of each for the Shares otherwise purchasable pursuant to such NPS Option; Company Stock Option divided by (vy) the date on which each such NPS Option was granted; product of (vii) the extent number of Shares otherwise purchasable pursuant to such Company Stock Option, multiplied by (ii) the Exchange Ratio; provided, however, that in the case of any option to which each such NPS Option is vested and unvested as Section 421 of a recent practicable date; the Code applies by reason of its qualification under Section 422 of the Code (vii"incentive stock options" or "ISOs" ) the date on which each option price, the number of shares purchasable pursuant to such NPS Option expires option and (viii) whether the exercisability terms and conditions of each exercise of such NPS Option will option shall be accelerated determined in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. order to comply with Section 3.2(b424(a) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Code.

Stock Options. As (a) Subsequent to the effectiveness of the close Form 10, but prior to the consummation of business on February 13the Distribution, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares and subject to the consummation of NPS the Distribution, each option to purchase ALTISOURCE Common Stock are subject to issuance pursuant to (“ALTISOURCE Stock Options”) granted and outstanding NPS Optionsunder the 2009 Equity Incentive Plan of ALTISOURCE (“ALTISOURCE Option Plan”) shall remain granted and outstanding and shall not, and ALTISOURCE shall cause (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance maximum extent permitted under the NPS ESPP. All shares of NPS Common ALTISOURCE Option Plan) the ALTISOURCE Stock subject to issuance as aforesaidOptions not to, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuableterminate, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments accelerate or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option otherwise vest as a result of the Mergers (whether alone or upon Distribution, and each holder thereof immediately prior to the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciationDistribution will be entitled to the following, phantom stockdetermined in a manner in accordance with, profit participation or other similar rights with respect to NPS. and subject to, the ALTISOURCE Option Plan, FAS123R and Section 3.2(b) 409A of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003Internal Revenue Code: (i) an option to acquire a number of shares of Residential Class B Common Stock equal to the name product of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iiix) the number of shares of NPS ALTISOURCE Common Stock subject to each the ALTISOURCE Stock Option held by such NPS Option; holder on the Distribution Date and (ivy) the 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 each such NPS holder’s ALTISOURCE Stock Option; , to be determined in a manner consistent with this Section 3.04 (vthe “Adjusted ALTISOURCE Stock Options”) (the date on which each such NPS Option was granted; (vi) Residential Stock Options and the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Adjusted ALTISOURCE Stock Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting scheduletogether, the “Post-Distribution Stock Options”).

Stock Options. As (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock (a "Company Stock Option" or, collectively, "Company Stock Options") issued pursuant to the Company's stock option plans listed on Schedule 1.10 hereto (the "Company Plans"), whether vested or unvested, shall be cancelled and, in lieu thereof, Parent shall issue to each holder of a Company Stock Option an option (each, a "Parent Option"), to acquire, on substantially the same terms and subject to substantially the same conditions as were applicable under such Company Stock Option, including, without limitation, term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the close Code, acceleration and termination provisions, the same number of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS 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 (y) 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 full shares of Parent Common Stock deemed purchasable pursuant to such Company 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 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 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 Parent Common Stock are subject listed for trading) for the five trading days immediately preceding the date of exercise. Employment with the Company shall be credited to issuance pursuant to outstanding NPS Options, (ii) no the optionees for purposes of determining the number of vested shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Parent Common Stock subject to issuance as aforesaid, upon issuance on exercise under converted Company Options after the terms and conditions specified in Effective Time. None of the instruments pursuant to which they Company Stock Options that are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate unvested at the vesting of any NPS Option Effective Time shall become vested as a result of the Mergers (whether alone execution and delivery of this Agreement or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) consummation of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Merger.

Stock Options. As Prior to the Effective Time, the Company shall take all actions necessary to provide, effective as of the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Optionsfor the cancellation, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified set forth in this Section 1.09(a) and without any payment therefor except as otherwise provided in this Section 1.09(a), of all Stock Options held by the instruments pursuant to which they Principal Stockholder that are issuableoutstanding at the Effective Time (whether or not then exercisable) (each such Stock Option being, would be duly authorized, validly issued, fully paid and nonassessablean “Affiliate Stock Option“). There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result As of the Mergers Effective Time, each Affiliate Stock Option (whether alone vested or upon unvested) shall be cancelled (and to the occurrence extent formerly so exercisable shall no longer be exercisable) and shall entitle each holder thereof, in cancellation and settlement therefor, to receive a number of any additional or subsequent events). There are no outstanding or authorized stock appreciationshares of Class A Stock, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) as of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13Effective Time, 2003: determined by dividing (i) the name product of (A) the optionee in amount, if any, by which the Merger Consideration exceeds the exercise price per share with respect to such Affiliate Stock Options, and (B) the total number of each shares of Company Stock then issuable upon the exercise of such NPS Option; Affiliate Stock Options (whether or not then vested or exercisable), by (ii) the particular plan Merger Consideration; provided, that the obligations of the Principal Stockholder in respect of any withholding taxes due upon receipt of the shares of Class A Stock pursuant to which each such NPS Option was granted; (iiithis Section 1.09(a) shall be satisfied by reducing the number of shares of NPS Common Class A Stock subject otherwise deliverable pursuant to each such NPS Option; this Section 1.09(a) by a number of shares of Class A Stock determined by dividing (ivi) the exercise price minimum statutory amount that the Company is required to withhold upon the delivery of each such NPS Option; shares of Class A Stock pursuant to this Section 1.09(a), by (vii) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this AgreementMerger Consideration, and indicates the extent Company shall remit all amounts that the Company is required to withhold upon the delivery of shares of Class A Stock pursuant to this Section 1.09(a) to the applicable taxing authorities in a timely manner. Any shares of Class A Stock delivered in respect of any such acceleration. Affiliate Stock Option in accordance with this Section 3.2(b1.09(a) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable shall be deemed to NPS Options, be Excluded Shares and shall specifically identify each NPS Option be cancelled at the Effective Time in accordance with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Section 1.07.

Stock Options. As (a) The Company shall take all actions or cause all such actions to be taken prior to the Commencement Date as are necessary to ensure that, immediately prior to the Effective Time, all then outstanding options to purchase Common Stock of the close Company set forth on Schedule 3.03-1 of business the Company Disclosure Schedule (collectively, the "Company Options"), whether or not exercisable, whether or not vested, and whether or not performance-based, under the Company's 1992 Equity Incentive Stock Option Plan and 2001 Equity Incentive Plan (collectively, the "Company Stock Option Plans") that are held by those persons set forth on February 13Schedule 2.04A of the Company Disclosure Schedule (as defined in Section 3.01 hereof), 2003: shall be automatically converted into the right to receive only an amount of cash (inet of applicable withholding Taxes) three million ninety one thousand three hundred sixty nine equal to (3,091,369x) shares the difference, if any, between the Per Share Amount less the exercise price per share of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, payable upon exercise of such Company Options multiplied by (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iiiy) the number of shares of NPS Common Stock subject issuable thereunder upon exercise immediately prior to the Effective Time. Additionally, the Company shall take all actions or cause all such actions to be taken prior to the date of the consummation of the Offer as are necessary to ensure that the holders of at least 80% of the Company Options that are not held by those persons set forth on said Schedule 2.04A (the "Remaining Options") shall be converted as set forth above. The Company shall use its reasonable best efforts to ensure that as soon as practicable and in any event prior to the Effective Time all of the Remaining Options that were not converted as set forth above on or before the date of the consummation of the Offer shall be exercised or converted as set forth above. The Company shall use its reasonable best efforts to obtain a signed consent of each holder of outstanding Company Options to the conversion of such NPS Option; (iv) Company Options as specified in this Section 2.04(a). Except with respect to Company Options for which a signed consent is obtained in accordance with this Section 2.04(a), and notwithstanding anything to the contrary in this Section 2.04(a), no payment shall be made to any holder of a Company Option that is to be converted and terminated unless such holder delivers a signed waiver acknowledging that all of his or her outstanding Company Options are converted and terminated at the Effective Time and waiving all of his or her rights under or with respect to those Company Options. The Company shall use its reasonable best efforts to take all such actions or cause such actions to be taken such that, as soon as practicable, all Company Options that have an exercise price per share of each such NPS Option; (v) Common Stock equal to or greater than the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested Per Share Amount shall be converted and unvested terminated as of the Effective Time. Purchaser shall pay, or cause to be paid, the cash amounts payable pursuant to this Section 2.04(a) in respect of Company Options at or shortly (and in no event more than five (5) business days) after the Effective Time, except that such payment with respect to the Company Options set forth on Schedule 2.04B of the Company Disclosure Schedule shall be made from the Exchange Fund on the 90th day following the Effective Time (unless such day is not a recent practicable date; (vii) business day, in which case payment shall be made on the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in next succeeding business day). The Company shall not make, or agree to make, any way by the transactions contemplated by this Agreement, and indicates the extent payment of any such acceleration. kind to any holder of a Company Option (except for the payments described in this Section 3.2(b2.04) without the prior written consent of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Parent.

Stock Options. As The Company shall (a) terminate the Company's Non-statutory Stock Option Plan (as amended and restated effective as of June 10, 1997, and as subsequently amended), Amended and Restated 1993 Non-officer Employee Stock Option Plan, 1994 Director Stock Option Plan, and Amended and Restated 1996 Director Stock Plan (as amended by Amendment No. 1 effective as of July 9, 2004) (collectively, the "Company Stock Plans"), immediately prior to the Effective Time without prejudice to the rights of the close holders of business on February 13options (each, 2003: a "Company Stock Option") awarded pursuant thereto, (ib) three million ninety one thousand three hundred sixty nine (3,091,369) following such termination grant no additional options under the Company Stock Plans or permit the receipt of shares of NPS Company Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option PlansStock, and (iiic) thirty eight thousand seven hundred twenty five 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 outstanding Company Stock Option shall be cancelled automatically and at the Effective Time shall be converted into and constitute the right to receive cash in an amount equal (38,725less any applicable withholding and without interest) to the product of (1) the total number of shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Company Common Stock subject to issuance as aforesaidsuch holder's Company Stock Option or Options immediately prior to the Effective Time and (2) the excess, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuableif any, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon Per Share Consideration over the occurrence exercise price per share of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Company Common Stock subject to each such NPS Company Stock Option or Options (each, an "Eligible Option; (iv) "). No payment of the exercise price of each such NPS Option; (v) the date on which each such NPS Per Share Consideration with respect to an Eligible Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will shall be accelerated in any way made by the transactions contemplated Disbursing Agent to the holder of such Eligible Option until receipt by this Agreementthe Disbursing Agent of an option cancellation agreement, in a form mutually and indicates reasonably acceptable to the extent Company and Parent, with respect to all Eligible Options owned by the holder of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Eligible Option.

Stock Options. As Each option (an "Option") to purchase Shares issued ------------- by the Company which is outstanding at the Effective Time shall be cancelled by virtue of the close Merger, without consideration except as provided in this Section 2.6, and shall cease to exist. Each holder of business an Option, whether or not immediately exercisable, shall be entitled to receive, for each Share issuable on February 13exercise of such Option, 2003: an amount in cash equal to the excess of (x) the Common Stock Consideration over (y) the per Share exercise price of the Option as in effect immediately prior to the Effective Time. The consideration due under this Section 2.6 shall be payable without interest after (a) verification by the Paying Agent of the ownership and terms of the particular Option by reference to the Company's records, and (b) delivery in the manner provided in Section 2.8 of a written instrument duly executed by the owner of the applicable Option, in a form provided by the Paying Agent and setting forth (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares the aggregate number of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, Options owned by that person and their respective issue dates and exercise prices; (ii) no shares a representation by the person that he or she is the owner of NPS Common Stock are subject to issuance all Options described pursuant to outstanding optionsclause (i), rights and that none of those Options has expired or warrants ceased to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, be exercisable; and (iii) thirty eight thousand seven hundred twenty five a confirmation of and consent to the cancellation of all of the Options described pursuant to clause (38,725i). Each holder of an Option who is a participant in the Company's Special Executive Deferred Compensation Plan may elect before the Offer commences to surrender any Option that is not immediately exercisable at the time of the holder's election and receive, for each Share that would have been issuable on exercise of such Option, a credit in the Special Executive Deferred Compensation Plan equal to the excess of (x) shares of NPS the Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers Consideration over (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (iy) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the per Share exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) as in effect at the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) time of the NPS Disclosure Letter also contains a complete and accurate description election. Such credit shall be funded pursuant to the change of control provisions of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Special Executive Deferred Compensation Plan.

Stock Options. As Immediately prior to the Effective Time, subject to obtaining any consent which may be necessary from the holder of the close outstanding options, the Company shall cancel and settle, by cash payment to the holders thereof (the "Option Settlement Amount"), all the outstanding options to purchase shares of business on February 13, 2003Common Stock (whether or not such options are currently exercisable or vested) which have heretofore been granted under the following stock plans and agreements of the Company: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Foodbrands America, Inc. 1992 Stock are subject to issuance pursuant to outstanding NPS OptionsIncentive Plan, as amended, (ii) no shares Foodbrands America, Inc. Associate Stock Purchase Plan, (iii) Foodbrands America, Inc. Nonqualified Associate Stock Purchase Plan, (iv) Deferred Stock Compensation Plan for the non-employee directors of NPS Common Stock are subject Foodbrands, and (v) the 25,000 options issued to issuance certain directors of the Company pursuant to outstanding optionsoption agreements dated April 27, rights or warrants 1995. (Such plans and agreements are referred to purchase NPS Common herein collectively as the "Stock issued other than Option Plans.") Except as otherwise provided pursuant to the NPS terms of the Stock Option Plans, Plans in clauses (ii) and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaidabove, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS such Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information Settlement Amount with respect to each NPS Option outstanding as of February 13cancelled option shall be in an amount equal to the excess, 2003: (i) the name if any, of the optionee in respect Merger Consideration over the per share exercise price of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) cancelled option, multiplied by the number of shares of NPS Common Stock subject into which such cancelled option would be exercisable, less any amounts that the Company is required to each withhold and pay over to any federal and state, local or other tax authorities under applicable law with respect to such NPS Option; (iv) Option Settlement Amount. The remaining proceeds, if any, will be paid to the exercise price option holder in cash. Such cash settlement shall constitute full performance of each such NPS Option; (v) the date on which each such NPS Company's obligations under the Stock Option was granted; (vi) Plans and any related stock option agreements. Except as otherwise agreed to by the extent to which each such NPS parties, the Stock Option is vested and unvested Plans shall terminate before or as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Effective Time.

Stock Options. As The Company shall not grant to any non-employees, including non-employee members of the close Board of business Directors ("Directors"), and former employees (collectively "NON-EMPLOYEES"), or to any current employees any options to purchase Shares, stock appreciation rights, restricted stock, restricted stock units or any other real or phantom stock or stock equivalents on February 13or after the date of this Agreement except as set forth in Attachment A to Schedule 4.2(a). Options to acquire Shares which are outstanding as of the date of this Agreement and which were granted to employees or Non-Employees under any stock option plan, 2003program or similar arrangement of the Company or any Subsidiaries ("Options"), other than Options described in Sections 2.10 and 2.11, shall be treated as follows: (i) three million ninety one thousand three hundred sixty nine Each current employee as of the date of this Agreement whose annual base salary as of the date of this Agreement is $80,000 or more (3,091,369"Key Employee") and who is holding Options which have an exercise price ("Exercise Price") less than the Closing Price (as defined below) ("In the Money Options") and which are vested as of the Closing Date shall be given the opportunity by the Company to make an irrevocable election on a grant by grant basis to be effective immediately following the Closing Date to receive in exchange for cancellation of each such vested In the Money Option either (A) a credit to an individual deferred compensation book account equal to the excess of the Closing Price of a Share over the Exercise Price of such In the Money Option times the number of Shares subject to such In the Money Option, such deferred compensation book account to have the terms described below, or (B) an option to purchase a number of shares of NPS Common Stock are Parent common stock (a "Parent Option") equal to 150% of the number of Shares subject to issuance pursuant the Key Employee's In the Money Option; provided that (x) the Parent Option received in the exchange shall be fully vested and have the same expiration date as the vested In the Money Option exchanged therefor, (y) the Exercise Price of the Parent Option shall equal the Fair Market Value (as defined below), and (z) the Parent Option shall be governed by the provisions of the GTE Corporation 1997 Long-Term Incentive Plan ("LTIP") and by applicable LTIP award agreements. For purposes of this Section 2.9(i), the deferred compensation book account shall be denominated in Parent phantom stock units, and dividend equivalent payments shall be credited to outstanding NPS Optionssuch deferred compensation book account at such time and in such manner as dividends are paid on Parent common stock. Before the third anniversary of the day of the Closing Date, no distribution may be made in respect of the deferred compensation book account to a Key Employee who is employed by Parent or an affiliate of Parent. The dividend equivalent payments on the deferred compensation book account shall be subject to forfeiture in the event the Key Employee is not employed by Parent or an affiliate of Parent on any date that precedes the third anniversary of the day of the Closing Date. Parent shall determine administrative procedures and provisions with regard to the deferred compensation book account. In the event a Key Employee does not make an irrevocable election described in this Section 2.9(i) before the Closing Date, the Key Employee shall be deemed to have irrevocably elected the deferred compensation book account credit as described in clause (A) above and all In the Money Options shall be canceled. For purposes of this Section 2.9, Section 2.10, and Section 2.11, (i) "Closing Price" shall mean the purchase price per share of the Shares as set forth in Section 1.1(a), (ii) "Fair Market Value" shall mean the average of the high and low sales price of the Parent common stock on the composite tape of the New York Stock Exchange issues as of the Closing Date, or, in the event that no shares of NPS Common Stock are subject to issuance pursuant to outstanding optionstrading occurs on such day, rights or warrants to purchase NPS Common Stock issued other than pursuant to then the NPS Option Plans, applicable value shall be determined on the last preceding day on which trading took place and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under "Closing Date" shall mean the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result day of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) consummation of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; Offer. (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number Each current employee whose annual base salary as of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on of this Agreement is less than $80,000 ("Employee") who is holding In the Money Options which each such NPS Option was granted; (vi) the extent to which each such NPS Option is are vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule).5

Stock Options. As (a) Except as provided in (b) below with respect to the Company's Employee Stock Purchase Plan, each option to purchase shares of Company Common Stock that is outstanding at the Effective Time, whether or not exercisable and whether or not vested (a "Company Option") shall, by virtue of the close Merger and without any action on the part of business on February 13the Company or the holder thereof, 2003: be assumed by Parent in such manner that Parent (i) three million ninety one thousand three hundred sixty nine (3,091,369is a corporation "assuming a stock option in a transaction to which Section 424(a) shares applies" within the meaning of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, Section 424 of the Code and the regulations thereunder or (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plansextent 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 Option. Prior to the Effective Time, the Company's Board of Directors and (iii) thirty eight thousand seven hundred twenty five (38,725) shares Compensation Committee thereof shall adopt resolutions preventing the value of NPS Common Stock are reserved for future issuance under any outstanding Company Options, stock appreciation rights, restricted stock, performance units or other stock based awards from being paid in cash to the NPS ESPPholders thereof. All shares of NPS Common Stock subject From and after the Effective Time, all references to issuance as aforesaid, the Company in the Company Options shall be deemed to refer to Parent. The Company Options assumed by Parent shall be exercisable upon issuance on the same terms and conditions specified as under the Company Options (including provisions regarding vesting and the acceleration thereof, and if and to the extent caused by and in accordance with the instruments pursuant to which they are issuablecurrent terms of a Company Option, would be duly authorized, validly issued, such Company Option shall vest fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon date on which the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(bMerger is approved by the Company's shareholders) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: except that (i) such Company Options shall entitle the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant holder to which each such NPS Option was granted; (iii) purchase from Parent the number of shares of NPS 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 each such NPS Option; Company Option immediately prior to the Effective Time, and (ivii) the option exercise price per share of each such NPS Option; Parent Common Stock shall be an amount (vrounded up to the nearest full cent) equal to the option exercise price per share of Company Common Stock in effect immediately prior to the Effective Time divided by the Conversion Ratio. Prior to the Effective Time, the Board of Directors of the Parent shall, for purposes of Rule 16b-3(d)(1) promulgated under Section 16 of the 1934 Act, specifically approve (i) the date on which each such NPS Option was granted; assumption by Parent of the Company Options and (viii) the extent issuance of Parent Common Stock in the Merger to which directors, officers and shareholders of the Company subject to Section 16 of the 1934 Act. As promptly as practicable after the Effective Time, Parent shall issue to each such NPS Option is vested and unvested as holder of a recent Company Option a written instrument informing such holder of the assumption by Parent of such Company Option. As soon as reasonably practicable date; after the Effective Time (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by event no later than five business days after the transactions contemplated by this AgreementEffective Time), Parent shall file a registration statement on Form S-8 (or any successor form) with respect to such shares of Parent Common Stock and indicates shall use its best efforts to maintain such registration statement (or any successor form), including the extent current status of any related prospectus or prospectuses, for so long as the Company Options remain outstanding. In addition, Parent shall use all reasonable efforts to cause the shares of Parent Common Stock subject to Company Options to be listed on the NYSE and such accelerationother exchanges as Parent shall determine. Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Company Options pursuant to the terms set forth in this Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)1.7.

Stock Options. As of At the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) each outstanding ------------- option to purchase shares of NPS Common Stock are subject (an "Option"), whether vested or unvested, shall be assumed by the Parent and shall constitute an option to issuance pursuant to outstanding NPS Optionsacquire, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the same terms and conditions specified in the instruments pursuant to which they are issuableas were applicable under such Option, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Parent Common Stock as if each share underlying such option were exchanged for Parent Common Stock pursuant to Section 4.1(e) (i) (rounded up to the nearest whole number), at a price per share (rounded down to the nearest whole cent) equal to (y) the aggregate exercise price for the shares of Common Stock otherwise purchasable pursuant to such Option divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to such Option in accordance with the foregoing; provided, -------- however, that in the case of any 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, with the exceptions that the number of shares of Parent Common Stock shall be rounded down to the nearest whole share and the purchase price per share shall be rounded up to the nearest cent, and further subject to each such NPS Option; (iv) adjustments as are necessary in order to satisfy the exercise price requirements of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b424(a) of the NPS Disclosure Letter also contains a complete Code and accurate description the regulations promulgated thereunder. At or prior to the Effective Time, the Company shall make all necessary arrangements to permit the assumption of the vesting schedule generally applicable unexercised Options by the Parent pursuant to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)this Section.

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) At the Effective Time, each Company Option 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, the same number of shares of NPS Parent Common Stock are subject as the holder of such Company Option would have been entitled to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than receive pursuant to the NPS 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 Plans, and divided by (iiiz) thirty eight thousand seven hundred twenty five (38,725) the number of full shares of NPS Parent Common Stock are reserved for future issuance under deemed purchasable pursuant to such Company Option in accordance with the NPS ESPP. All 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 of NPS Common Stock subject purchasable pursuant to issuance as aforesaid, upon issuance on such option and the terms and conditions specified of exercise of such option shall be determined in accordance with the instruments pursuant foregoing, subject to which they such adjustments as are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements necessary in order to satisfy the requirements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b424(a) of the NPS Disclosure Letter contains Code; provided, further, that to the extent that Common Shares acquired upon exercise of a complete and accurate list Company Option would be subject to vesting or other restrictions under the terms of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each relevant Company Stock Plan under which such NPS Option; (ii) the particular plan pursuant to which each such NPS Company Option was granted; issued (iii) "Company Restricted Shares"), the number of shares of NPS Parent Common Stock to be issued upon exercise of an assumed Company Option in accordance with the foregoing that bears the same ratio to the total shares of Parent Common Stock deemed purchasable pursuant to such assumed Company Option as the number of Company Restricted Shares bears to the total number of Company Shares issuable under such Company Option shall be subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) same vesting and other restrictions as would be applicable to the date on which each such NPS Option was granted; (vi) Company Restricted Shares. At or prior to the extent Effective Time, the Company shall make all necessary arrangements with respect to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether Company Stock Plans to permit the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) assumption of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable unexercised Company Options by Parent pursuant to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)this Section.

Stock Options. As At the Effective Time, by virtue of the close First Step Merger and without any action on the part of business on February 13the holders of Company Options, 2003: each Company Option that is outstanding immediately prior to the Effective Time, whether or not then vested or exercisable, shall be assumed by Parent (the “Assumed Options”) and converted automatically at the Effective Time into an option denominated in shares of Parent Stock and which has other terms and conditions substantially identical to those of the related Company Option except that (i) three million ninety one thousand three hundred sixty nine each Assumed Option will be exercisable (3,091,369or will become exercisable in accordance with its terms) for that number of whole shares of NPS Common Parent Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant equal to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares product of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Company Stock subject that were issuable upon exercise of such Assumed Option immediately prior to each the Effective Time multiplied by the Option Exchange Ratio (as defined below), rounded down to the nearest whole number of shares of Parent Stock and (ii) the per share exercise price for the shares of Parent Stock issuable upon exercise of such NPS Option; (iv) Assumed Option will be equal to the quotient determined by dividing the exercise price per share of Company Stock at which such Assumed Option was exercisable immediately prior to the Effective Time by the Option Exchange Ratio, rounded up to the nearest whole cent; provided, however, that in no case shall the exchange of a Company Option be performed in a manner that is not in compliance with the adjustment requirements of Section 409A of the Code. The “Option Stock Amount” means the aggregate number of shares of Parent Stock issuable pursuant to this Section 2.6(a). The “Option Exchange Ratio” means (i)(A) 0.267008, multiplied by (B) the Elected Stock Percentage; plus (ii) (A) the quotient obtained by dividing $7.30 by the closing sale price for Parent Stock on the NASDAQ for the last trading day immediately prior to the Closing Date, multiplied by (B) the Elected Cash Percentage. The Company agrees that the assumption and adjustment of Company Options in accordance with this Section 2.6(a) shall preserve the compensation element of each such NPS Option; Company Option as of the Effective Time. Notwithstanding the foregoing, unless determined otherwise by Parent, each Company Option that is held by a person who is not an employee of, or a consultant to, the Company or any Subsidiary of the Company immediately prior to the Effective Time (vthe “Non-Assumed Options”) shall not be assumed by Parent pursuant to this Section 2.6 and shall, immediately prior to the Effective Time, be canceled and extinguished and the vested portion thereof shall automatically be converted into the right to receive an amount in cash, if any, equal to the product obtained by multiplying (i) the date aggregate number of shares of Company Stock that were issuable upon exercise or settlement of such Non-Assumed Options immediately prior to the Effective Time (for these purposes, after giving effect to any applicable vesting acceleration provisions) and (ii) $7.30, less any per share exercise price of such Non-Assumed Options. All Company Options held by non-employee members of the Board of Directors of the Company shall be Non-Assumed Options for purposes of this Agreement and converted into the right to receive cash pursuant to the immediately preceding sentences. The Company shall at least thirty (30) days prior to the Effective Time provide a notice to all holders of Assumed Options and Non-Assumed Options of the effect of the transaction on their options. The Company shall also provide notice that all holders of outstanding Company Options which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option Effective Time will be accelerated Non-Assumed Options have the opportunity to exercise their vested options on or before the termination date of the option and during a specified period prior to the Effective Time, and that upon a failure to so exercise a Non-Assumed Option, each Non-Assumed Option outstanding immediately prior to the Effective Time will be extinguished and converted into a right to receive cash in any way by accordance with this section. Parent shall take such actions as are necessary for the assumption and conversion of the Company Options pursuant to this Section 2.6, including the reservation, issuance and listing of Parent Stock as is necessary to effectuate the transactions contemplated by this AgreementSection 2.6. As soon as reasonably practicable after the Effective Time, and indicates the extent Parent shall deliver to each holder of any Company Option an appropriate notice setting forth such accelerationholder’s rights pursuant to such Company Option. Section 3.2(b) Parent shall prepare and file with the SEC a registration statement on Form S-8 with respect to the shares of Parent Stock issuable upon exercise of the NPS Disclosure Letter also contains a complete Assumed Options promptly (but in no event later than fifteen (15) Business Days) following the Effective Time and accurate description Parent shall exercise commercially reasonable efforts to maintain the effectiveness of such registration statement for so long as such Assumed Options remain outstanding. The Company and its counsel shall reasonably cooperate with and assist Parent in the vesting schedule generally applicable preparation of such registration statement prior to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)the Effective Time.

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) On the Effective Date, each ML Option which is then outstanding, whether or not exercisable, shall cease to represent a right to acquire shares of NPS ML Common Stock are subject and shall be converted automatically into an option to issuance pursuant to outstanding NPS Optionspurchase shares of Sovereign Common Stock and the corresponding number of Sovereign Stock Purchase Rights, and Sovereign shall assume each ML Option, in accordance with the terms of the applicable ML Stock Option Plan and stock option agreement by which it is evidenced, except that from and after the Effective Date, (i) Sovereign and its Board of Directors or a duly authorized committee thereof shall be substituted for ML and ML's Board of Directors or duly authorized committee thereof administering such ML Stock Option Plan, (ii) no each ML Option assumed by Sovereign may be exercised solely for shares of NPS Sovereign Common Stock are subject to issuance pursuant to outstanding optionsand Sovereign Stock Purchase Rights, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Sovereign Common Stock subject to each such NPS Option; ML Option shall be equal to the number of shares of ML Common Stock subject to such ML Option immediately prior to the Effective Date multiplied by the Applicable Exchange Ratio, provided that any fractional shares of Sovereign Common Stock resulting from such multiplication shall be rounded down to the nearest share, and (iv) the per share exercise price of under each such NPS Option; (v) ML Option shall be adjusted by dividing the date on which per share exercise price under each such NPS ML Option was granted; by the Applicable Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. Notwithstanding clauses (viiii) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(biv) of the NPS Disclosure Letter also contains a complete and accurate description preceding sentence, each ML Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the vesting schedule generally applicable to NPS OptionsIRC, and shall specifically identify each NPS Option with the regulations promulgated thereunder, so as not to constitute a vesting schedule that is different than such generally applicable vesting schedule (including a description modification, extension or renewal of each such different vesting schedulethe option within the meaning of Section 424(h) of the IRC. Sovereign and ML agree to take all necessary steps to effect the foregoing provisions of this Section 1.02(f).

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) The Company has reserved 1,066,824 shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares Stock Plans, of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights options with respect to NPS953,281 shares are outstanding as of the date of this Agreement. Section 3.2(b2.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information Schedule accurately sets forth, with respect to each NPS Option that is outstanding as of February 13, 2003the date of this Agreement: (i) the name of the optionee in respect holder of each such NPS OptionOption and whether such holder is an employee or non-employee; (ii) the particular plan pursuant 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 each such NPS Option was grantedis immediately exercisable; (iii) the number date on which such Option was granted and the term of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price vesting schedule for such Option and whether the vesting of each such NPS OptionOption shall be subject to any acceleration in connection with the Merger or any of the other transactions contemplated by this Agreement; (v) the date on which each exercise price per share of Common Stock purchasable under such NPS Option was grantedOption; and (vi) the extent to which each whether such NPS Option is vested and unvested an “incentive stock option” as defined in Section 422 of a recent practicable date; (vii) 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 NPS Option expires grant was made in compliance with the terms of the applicable compensation plan or arrangement of the Company and (viii) whether all other applicable Legal Requirements, the exercisability per share exercise price of each such NPS Option will be accelerated 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 any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b2.2(b) of the NPS Disclosure Letter also contains a complete and accurate description Schedule, each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the vesting schedule generally 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 NPS Optionssuch Options and all applicable Legal Requirements and, as of the Effective Time, no former holder of an Option will have any rights with respect to such Option other than the rights contemplated by Section 1.6(a). The Company has delivered to Parent accurate and shall specifically identify complete copies of the Stock Plans, each NPS form of agreement used thereunder and each Contract pursuant to which any Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)outstanding.

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine At the Effective Time, each outstanding option to purchase Shares (3,091,369a "Company Option") under the Stock Plan, 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, the same number of shares of NPS Parent Common Stock are subject as the holder of such Company Option would have been entitled to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than receive pursuant to the NPS Merger had such holder exercised such option in full immediately prior to the Effective Time and the Shares received in such exercise been deemed to be Stock Election Shares (without regard to any proration thereof) (rounded down to the nearest whole number), at a price per share (rounded up to the nearest whole cent) equal to (y) the aggregate exercise price for the Shares otherwise purchasable pursuant to such Company Option Plans, and divided by (iiiz) thirty eight thousand seven hundred twenty five (38,725) the number of full shares of NPS Parent Common Stock are reserved for future issuance under deemed purchasable pursuant to such Company Option in accordance with the NPS ESPP. All foregoing; provided, however, that in the case of any Company Option which is intended to be an "incentive stock option" (as defined in Section 422 of the Code), the option price, the number of shares of NPS Common Stock subject purchasable pursuant to issuance as aforesaid, upon issuance on such option and the terms and conditions specified of exercise of such option shall be determined in accordance with the instruments pursuant foregoing, subject to which they such adjustments as are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements necessary in order to satisfy the requirements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b424(a) of the NPS Disclosure Letter contains a complete and accurate list Code. At or prior to the Effective Time, the Company shall make all necessary arrangements to permit the assumption of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan unexercised Company Options by Parent pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Section.

Stock Options. As of (a) At or immediately prior to the close of business on February 13Effective Time, 2003: each option to purchase Shares (each, an “Option”) outstanding under any employee plan that provides for equity-based compensation (each, an “Option Plan”) that is (i) three million ninety one thousand three hundred sixty nine then outstanding, vested and exercisable (3,091,369including for such purpose any such Option that will vest and become exercisable at the Effective Time in accordance with its terms or in accordance with any applicable employment agreement or other Employee Plan) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS (collectively, the “Exercisable Options, ”) or (ii) no shares not an Exercisable Option and that is held by a non-employee director of NPS Common Stock are subject to issuance pursuant to outstanding optionsthe Company (collectively, rights together with the Exercisable Options, the “Cashout Options”) shall be canceled, and the Company or warrants to purchase NPS Common Stock issued other than pursuant a wholly-owned Subsidiary of the Company shall pay each holder of any such Option at or as soon as practicable after the Effective Time for each such Option an amount in cash determined by multiplying (x) the excess, if any, of the Offer Price over the applicable per Share exercise price of such Option by (y) the number of Shares such holder could have purchased had such holder exercised such Option in full immediately prior to the NPS Option PlansEffective Time; provided that such amounts payable with respect to Company 102 Options that are held by the 102 Trustee shall be paid to the 102 Trustee in accordance with the Israeli Options Tax Ruling, if obtained, and (iiithe Israeli Income Tax Ordinance. Section 3.05(a) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares Company Disclosure Schedule sets forth a true and complete list of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms each Option that will vest and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option become exercisable as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, assuming a Closing Date of July 31, 2011, including the holder thereof, the number of Shares subject to such Option, the grant date of such Option and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS per-Share Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)exercise price.

Stock Options. As At the Effective Time, each holder of a then outstanding option to purchase Shares under the close of business on February 13Company's 1985 Stock Option Plan and 1994 Long Term Incentive Plan (collec- tively, 2003: the "Stock Option Plan"), whether or not then exercisable (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are the "Option"), shall, in settlement thereof, represent the right to receive for each Share subject to issuance pursuant to outstanding NPS Options, such Option an amount (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant any applicable withholding tax) in cash equal to the NPS difference between the Offer Consideration and the per Share exercise price of such Option Plansto the extent such difference is a positive number (such amount being hereinafter referred to as, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock "Option Consideration"); provided, however, that with respect -------- ------- to any person subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b16(a) of the NPS Disclosure Letter contains a complete and accurate list Exchange Act, any such amount shall, at the written request of such Person, be paid as soon as practicable after the first date payment can be made without liability to such person under Section 16(b) of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name Exchange Act. Upon receipt of the optionee Option Consideration, the Option shall be canceled. The surrender of an Option to the Company in exchange for the Option Consideration shall be deemed a release of any and all rights the holder had or may have had in respect of each such NPS Option; (ii) . Prior to the particular plan pursuant Effective Time, the Company shall use its commercially reasonable best efforts to which each obtain all necessary consents or releases from holders of Options under the Stock Option Plans and take all such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject other lawful action as may be necessary to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent give effect to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this AgreementSection 3.5 (except for such action that may require the approval of the Company's stockholders). Except as otherwise agreed to by the parties, (i) all Stock Option Plans shall terminate as of the Effective Time 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 any Subsidiary thereof, shall be canceled as of the Effective Time, and indicates (ii) the extent of Company shall take all action necessary to ensure that following the Effective Time no participant in any such acceleration. Section 3.2(b) Stock Option Plan or other plans, programs or arrangements shall have any right thereunder to acquire equity securities of the NPS Disclosure Letter also contains a complete Company, the Surviving Corporation or any Subsidiary thereof and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than terminate all such generally applicable vesting schedule (including a description of each such different vesting schedule)plans.

Stock Options. As Prior to the Effective Time, the Company shall take all actions necessary to provide, effective as of the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Optionsfor the cancellation, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified set forth in this Section 1.08(a) and without any payment therefor except as otherwise provided in this Section 1.08(a), of all outstanding options to purchase Common Shares (each, a “Stock Option”) outstanding at the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessableEffective Time (whether or not then vested or exercisable). There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result As of the Mergers Effective Time, each Stock Option shall be cancelled (whether alone and to the extent formerly so vested or upon exercisable shall no longer be vested or exercisable) and shall entitle each holder thereof, in cancellation and settlement therefor, to receive a payment, if any, in cash from the occurrence of Company (less any additional or subsequent eventsapplicable withholding taxes). There are no outstanding or authorized stock appreciation, phantom stockas promptly as reasonably practicable following the Effective Time, profit participation or other similar rights with respect equal to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of amount, if any, by which the optionee in Merger Consideration exceeds the exercise price per share with respect of each to such NPS Option; Stock Options, multiplied by (ii) the particular plan total number of Common Shares then issuable upon the exercise of such Stock Options (whether or not then vested or exercisable). Each Stock Option, when cancelled pursuant to which each such NPS this Section 1.08(a), shall no longer represent the right to acquire Company Shares and shall represent the right to receive the cash consideration, if any, as set forth in this Section 1.08(a). Notwithstanding the foregoing, no Stock Option was granted; (iii) the number of shares of NPS Common Stock shall be subject to each such NPS Option; this Section 1.08(a), if, in accordance with its terms, upon consummation of the Merger, (ivi) the exercise price per Company Share of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Stock Option will be accelerated in any way greater than the Merger Consideration per Company Share and (ii) the holder of such Stock Option will be entitled to receive, upon exercise of such Stock Option, only the Merger Consideration multiplied by the transactions contemplated number of Company Shares subject to such Stock Option. For the avoidance of doubt, in the event that a Stock Option is forfeited by its terms prior to the Effective Time, the holder thereof shall not be entitled to any payment in respect of such Stock Option pursuant to this Agreement, and indicates the extent of any such acceleration. Section 3.2(b1.08(a) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)or otherwise.

Stock Options. As (a) Each grantee under any of the close of business on February 13, 2003: CHK Legacy Equity Plans (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, who will be a SSE Employee and (ii) no who holds as of the Distribution Date, one or more CHK Options, shall receive, effective as of the last to occur of the Distribution Date and the Registration Statement Effectiveness Date, as a replacement award in substitution for each such CHK Option (which shall be cancelled), an option to purchase a number of shares of NPS SSE Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant under the SSE Equity Plan (each a “Replacement SSE Option”) having a value (calculated using the SSE Share Price) equal to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares value of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS CHK Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in CHK Option (calculated using the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent eventsPre-Distribution CHK Share Price). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect The number of shares of SSE Common Stock subject to NPS. Section 3.2(b) a Replacement SSE Option shall be equal to the product of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS CHK Common Stock subject to each a CHK Option as of the Distribution Date multiplied by (ii) a fraction, the numerator of which is the Pre-Distribution CHK Share Price and the denominator of which is the SSE Share Price, with the resulting number being rounded down to the nearest whole share. Each such NPS Option; (iv) Replacement SSE Option shall have the same comparative ratio of the exercise price to the SSE Share Price as the exercise price of each such NPS Option; CHK Option to the Pre-Distribution CHK Share Price as provided under Code Section 424 and the applicable regulations thereunder. SSE shall be responsible for (vi) the date satisfaction of all tax reporting and withholding requirements in respect of the exercise of Replacement SSE Options issued in accordance with this Section 3.4(a) and (ii) remitting the appropriate tax or withholding amounts to the appropriate taxing authorities. Replacement SSE Options shall not be exercisable until the Registration Statement Effectiveness Date. Except as provided in the foregoing provisions of this Section 3.4(a), Replacement SSE Options granted under this Section 3.4(a) shall be granted on terms which each such NPS Option was granted; are in all material respects identical (viincluding with respect to vesting) to the extent terms of the CHK Options with respect to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)they replace.

Stock Options. As (a) At the Effective Time, each outstanding option, warrant or other right to purchase Shares (a "Company Stock Option" and collectively, "Company Stock Options") issued pursuant to the 1999 Stock Option Plan for Non-Employee Directors and Advisors, 1996 Stock Option Plan, as amended, 1989 Stock Option Plan, as amended, and 1996 Directors' Stock Option Plan, and all other agreements or arrangements other than the 1996 Employee Stock Purchase Plan, whether vested or unvested, shall be assumed by Parent and converted as of the close of business on February 13Effective Time into an option, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) warrant or right, as applicable, to purchase shares of NPS Parent Common Stock are subject to issuance in accordance with the terms of this Section 1.11. All plans or agreements described above pursuant to outstanding NPS Options, (ii) no shares of NPS Common which any Company Stock are subject to issuance pursuant to outstanding options, rights Option has been issued or warrants to purchase NPS Common Stock may be issued other than pursuant outstanding warrants or rights are referred to collectively as the NPS "Company Plans." Each Company Stock Option Plansso converted shall be deemed to constitute an option to acquire, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the same terms and conditions specified in the instruments pursuant as were applicable under such Company Stock Option, a number of shares of Parent Common Stock equal to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Parent Common Stock subject that the holder of such Company Stock Option would have been entitled to each receive pursuant to the Merger had such NPS holder exercised such Company Stock Option; (iv) , 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 immediately prior to the Effective Time divided by the Exchange Ratio; provided, however, that in the case of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent any option to which each Section 421 of the Code applies by reason of its qualification under Sections 422 through 424 of the Code, the option price, the number of shares purchasable pursuant to such NPS Option is vested option and unvested the terms and conditions of exercise of such option shall be adjusted as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated necessary in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. order to comply with Section 3.2(b424(a) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Code.

Stock Options. (a) As soon as practicable following the date of the close of business on February 13this Agreement, 2003: Target shall ensure that (i) three million ninety one thousand three hundred sixty nine each holder (3,091,369each, an "Optionee") of an outstanding Target Stock Option shall have the right to irrevocably elect, subject to satisfaction of the conditions set forth in Section 6.01(d), to surrender, immediately prior to the acceptance for payment of shares of NPS Target Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Offer, any outstanding and unexercised Target Stock Option Plansthen held by the Optionee in exchange for a cash payment equal to (x) the excess, and if any, of (iiiA) thirty eight thousand seven hundred twenty five (38,725) shares the price per share of NPS Target Common Stock are reserved for future issuance under to be paid pursuant to the NPS ESPP. All shares Offer over (B) the exercise price per share of NPS Target Common Stock subject to issuance as aforesaidsuch Target Stock Option, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers multiplied by (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iiiy) the number of shares of NPS Target Common Stock issuable pursuant to the unexercised portion of such Target Stock Option, less any tax withholding required by the Code or any provision of state or local law, payable not later than twenty days after the earlier of the satisfaction of the conditions set forth in Section 6.01(d) and five days after the Effective Time, (ii) each Optionee shall have the right to purchase, effective as of the consummation of the Merger, subject to the consummation of the Merger and in accordance with the terms of the relevant plan or document, all or any part of the shares of Target Common Stock subject to any Target Stock Option held by the Optionee, whether vested or unvested, and that each such NPS Option; share of Target Common Stock so purchased shall be converted, as of the Effective Time, in the right to required the Merger Consideration, less any tax withholding received by the Code or any provision of state or local law, and (iviii) the exercise price of each such NPS Option; Target Stock Option (v) the date on which each such NPS Option was granted; (vi) the extent with respect to which each such NPS Option is vested an Optionee has not exercised one of the rights set forth in this section) shall terminate and unvested expire as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Effective Time.

Stock Options. As (a) Except as provided below with respect to the Company's Employee Stock Purchase Plan, each option to purchase shares of Company Common Stock that is outstanding at the Effective Time (a "Company Option") shall, by virtue of the close Merger and without any action on the part of business the holder thereof, be assumed by Parent (and a registration statement on February 13, 2003: Form S-8 therefor shall be filed promptly after the Effective Time) in such manner that Parent (i) three million ninety one thousand three hundred sixty nine (3,091,369is a corporation "assuming a stock option in a transaction to which Section 424(a) shares applies" within the meaning of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, Section 424 of the Code and the regulations thereunder or (ii) no shares to the extent that Section 424 of NPS Common Stock are subject the Code does not apply to issuance pursuant any such Company Option, would be such a corporation were Section 424 of the Code applicable to outstanding optionssuch Company Option. From and after the Effective Time, rights or warrants all references to purchase NPS Common Stock issued the Company in the Company Options shall be deemed to refer to Parent (other than pursuant to for purposes of determining whether there has been a change in control of the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under Company). The Company Options assumed by Parent shall be exercisable upon the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the same terms and conditions specified as under the Company Options (including provisions thereof, if any, relating to the acceleration of vesting upon a change in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result control of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(bCompany) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: except that (i) such Company Options shall entitle the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant holder to which each such NPS Option was granted; (iii) purchase from Parent the number of shares of NPS Parent Common Stock (rounded to the nearest whole number of such shares) that equals the product of the Conversion Fraction multiplied by the number of shares of Company Common Stock subject to each such NPS Option; option immediately prior to the Effective Time, and (ivii) the option exercise price per share of each such NPS OptionParent Common Stock shall be an amount (rounded to the nearest full cent) equal to the option exercise price per share of Company Common Stock in effect immediately prior to the Effective Time divided by the Conversion Fraction; (v) provided, however, that in the date on which each such NPS case of any Company Option was granted; (vi) the extent to which each Section 421 of the Code applies by reason of its qualification under Section 422 of the Code ("incentive stock options"), the option price, the number of shares purchasable pursuant to such NPS Option is vested option and unvested as the terms and conditions of a recent practicable date; (vii) the date on which each exercise of such NPS Option expires and (viii) whether the exercisability of each such NPS Option will options shall be accelerated determined in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. order to comply with Section 3.2(b424(a) of the NPS Disclosure Letter also contains Code. As promptly as practicable after the Effective Time, Parent shall issue to each holder of a complete and accurate description Company Option a written instrument informing such holder of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than assumption by Parent of such generally applicable vesting schedule (including a description of each such different vesting schedule)Company Option.

Stock Options. (a) As soon as practicable following the date of this Agreement, Parent and Company (or, if appropriate, any committee of the close Board of business on February 13Directors of Company administering Company's Amended and Restated Stock Option Plan and 1996 Stock Option Plan (collectively, 2003: (ithe "Company Option Plans") three million ninety one thousand three hundred sixty nine (3,091,369) 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 NPS Company Common Stock are subject under the Company Option Plans (a "Company Stock Option"), whether vested or unvested, shall be adjusted as necessary to issuance pursuant provide that at the Effective Time, each Company Stock Option outstanding immediately prior to outstanding NPS Optionsthe Effective Time shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (ii) no 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), the same number of shares of NPS Parent Common Stock are subject as the holder of such Company Stock Option would have been entitled to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than receive pursuant to the NPS Merger had such holder exercised such Company Stock Option Plansin full immediately prior to the Effective Time (assuming for this purpose that such option were then exercisable), and at a price per share of Parent Common Stock equal to (iiiA) thirty eight thousand seven hundred twenty five (38,725) the aggregate exercise price for the shares of NPS Company Common Stock are reserved for future issuance under otherwise purchasable pursuant to such Company Stock option divided by (B) the NPS ESPP. All aggregate number of shares of NPS 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 issuance as aforesaidCompany 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, upon issuance on 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 specified 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 instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessablepreceding sentence. There are no commitments or agreements For purposes of any character to which NPS is bound obligating NPS to accelerate determining the vesting amount of any NPS Option as a result such payment the price of the Mergers (whether alone or upon Parent Common Stock shall be the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) average closing price per share of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Parent Common Stock subject on the NYSE for the five trading days immediately prior to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)exercise.

Stock Options. As of On the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than date Acquisition Sub purchases Shares pursuant to the NPS Option PlansOffer, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS each outstanding option to purchase Common Stock are reserved for future issuance (a "Stock Option") granted under the NPS ESPP. All shares 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 NPS Common 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 issuance as aforesaid, upon issuance on the terms and conditions specified in of the instruments Company Stock Option Plan pursuant to which they are issuablesuch Stock Option was issued. If and to the extent that a Stock Option shall not have been exercised at the Effective Time, would such Stock Option shall be duly authorized, validly issued, fully paid and nonassessableautomatically canceled. There are no commitments or agreements Each holder of any character a canceled Stock Option shall be entitled to which NPS is bound obligating NPS receive as soon as practicable after the first date payment can be made without liability to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. such person under Section 3.2(b16(b) of the NPS Disclosure Letter contains a complete and accurate list Exchange Act from the Company in consideration for such cancellation an amount in cash (less applicable withholding taxes) equal to the product of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock previously subject to each such NPS Option; Stock Option multiplied by (ivii) the excess, if any, of the Per Share Amount over the exercise price per share of each Common Stock previously subject to such NPS Option; Stock Option (vthe "Option Consideration") upon surrender of such Stock Option to the date on which each Company or an affidavit of loss in the form requested by Parent, together with such NPS Option was granted; (vi) additional documentation as may be reasonably required by Parent or the extent to which each such NPS Option is vested and unvested as Company. The surrender of a recent practicable date; (viiStock 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 date on which each holder had or may have had in respect of such NPS Stock Option. Prior to the purchase by Acquisition Sub of Shares pursuant to the Offer, the Company shall use its reasonable best efforts to obtain all necessary consents or releases from holders of Stock Options under the Company Stock Option expires Plan and (viii) whether the exercisability of each take all such NPS Option will other lawful action as may be accelerated in any way by necessary to give effect to the transactions contemplated by this AgreementSection 2.6(c). Except as otherwise agreed to by the parties, and indicates the extent 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 such acceleration. Section 3.2(b) right thereunder to acquire any equity securities of the NPS Disclosure Letter also contains a complete Company, the Surviving Corporation or any subsidiary thereof and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than terminate all such generally applicable vesting schedule (including a description of each such different vesting schedule)plans.

Stock Options. As (a) Each option to purchase shares of Company Common Stock that is outstanding at the Effective Time, whether or not exercisable and whether or not vested (a "Company Option"), shall, without any action on the part of the close of business on February 13Company or the holder thereof, 2003: be assumed by Parent in such manner that Parent (i) three million ninety one thousand three hundred sixty nine is a corporation "assuming a stock option in a transaction to which Section 424(a) applies" within the meaning of Section 424 of the Code and the regulations thereunder or (3,091,369ii) to the extent 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 Option. From and 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 NPS Parent Common Stock are (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 issuance pursuant such Company Option immediately prior to outstanding NPS Optionsthe Effective Time, (ii) no shares the option exercise price per share of NPS Parent Common Stock are subject shall be an amount (rounded up to issuance pursuant the nearest full cent) equal to outstanding options, rights or warrants to purchase NPS the option exercise price per share of Company Common Stock issued other than pursuant in effect immediately prior to the NPS Option PlansEffective Time divided by the Conversion Ratio, and (iii) thirty eight thousand seven hundred twenty five the Company Options shall vest to the extent required pursuant to the current terms of such Company Options or other agreements as described in Section 1.7 of the Company Disclosure Schedule (38,725) shares as defined below); provided that if such vesting of NPS Common Stock are reserved Company Options or other provisions with respect to the Company Options would jeopardize the Merger being accounted for future issuance under as a "pooling of interests," then the NPS ESPP. All shares of NPS Common Stock Company shall, subject to issuance as aforesaidParent's written consent not to be unreasonably withheld, upon issuance on use reasonable best efforts to prevent such vesting or effect of other provisions. Except to the terms and conditions specified in the instruments extent required pursuant to which they are issuablethe current terms of such Company Options or other agreements as described in Section 1.7 of the Company Disclosure Schedule, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of the Company shall not take any character to which NPS is bound obligating NPS action to accelerate the vesting of any NPS Option as a result 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 Mergers Securities Exchange Act of 1934, and the rules and regulations thereunder (whether alone or upon the occurrence of any additional or subsequent events"1934 Act"). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: specifically approve (i) the name assumption by Parent of the optionee in respect of each such NPS Option; Company Options and (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number issuance of shares of NPS Parent Common Stock in the Merger to directors, officers and stockholders of the Company subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) 16 of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)1934 Act.

Stock Options. As of (a) At or immediately prior to the close of business on February 13Effective Time, 2003: each outstanding Company Option (idefined below) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights which is vested or warrants to purchase NPS Common Stock issued other than which pursuant to the NPS Option Plansterms of the relevant Stock Plan (defined below) become vested by virtue of the Offer or the Merger shall be canceled, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements each holder of any character to which NPS is bound obligating NPS to accelerate such option shall be paid by the vesting of any NPS Option as a result of Company promptly after the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to Effective Time for each NPS Option outstanding as of February 13, 2003: such option an amount determined by multiplying (i) the name excess, if any, of $29.25 per Share over the optionee in respect applicable exercise price of each such NPS Option; option by (ii) the particular plan pursuant number of Shares such holder could have purchased had such holder exercised such option in full immediately prior to which each the Effective Time (as if such NPS Company Option was grantedexercisable in full); subject to the limitations set forth in an amendment to certain option agreements (iiitrue and complete copies of which have been provided to Parent) with respect to the Company Options issued in 1999. The Company shall take such action or, if required, shall amend each of the Company's Stock Plans that do not provide for the vesting of unvested Company Options by virtue of the Offer or the Merger so that, at the Effective Time, each of the then outstanding unvested Company Options shall by virtue of the Merger, and without any further action on the part of any holder thereof, be assumed by Parent and converted into an option to purchase that number of shares of NPS common stock, par value $.10 per share ("PARENT COMMON STOCK"), of Parent determined by multiplying the number of Shares subject to such Company Option at the Effective Time by the quotient obtained by dividing (x) $29.25 by (y) the average closing price of Parent Common Stock subject on the New York Stock Exchange Composite Tape for the 30 consecutive trading days immediately prior to each the Effective Time (such NPS Option; quotient, the "CONVERSION NUMBER"), at an exercise price per share of Parent Common Stock equal to the quotient obtained by dividing (ivx) the exercise price per Share of each such NPS Option; Company Option immediately prior to the Effective Time by (vy) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule).the

Stock Options. As At the first regularly scheduled meeting of the close Board following the date upon which Employer closes an equity financing, in a single transaction or series of business on February 13related transactions, 2003: of at least $15,000,000 (ia “Financing”), Employer shall grant Employee a stock option under RXi Pharmaceuticals Corporation’s 2007 Incentive Plan (the “Plan”) three million ninety one thousand three hundred sixty nine (3,091,369) to purchase a number of shares of NPS Common Stock are subject Employer’s common stock equal to issuance pursuant to outstanding NPS Options, (ii) no shares 3/70th of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject Employer’s common stock held by CytRx immediately prior to the Financing (the “Option”). The Option shall vest and become exercisable in 36 equal monthly installments beginning on the one-month anniversary of the date of grant, in each case, that Employee remains in the continuous employ of Employer through such NPS Option; anniversary date. The Option shall (iva) the be exercisable at an exercise price equal to the fair market value at the time of each granting as determined by Employer, (b) have a term of ten years, and (c) be on such NPS other terms as shall be determined by Employer’s Board of Directors (or the Compensation Committee of the Board) and set forth in a customary form of stock option agreement under the Plan evidencing the Option; . Notwithstanding anything to the contrary in Section 6.2 or other provisions of this Agreement or of the stock option agreement evidencing the Option, in the event that either (va) a Covered Transaction as defined in the Plan occurs or (b) CytRx votes its shares of capital stock of Employer to elect individuals who are (i) employees, officers or directors of CytRx, (ii) employees, officers or directors of any entity that has a contractual business relationship with CytRx, or (iii) employees, officers, directors of any entity that has a contractual business relationship with any officer or director of CytRx (collectively, “Affiliates”) to constitute a majority of the Employer’s Board of Directors, the Option shall thereupon vest in full and become exercisable as to all of the shares covered thereby in accordance with the terms of the Plan. Furthermore, in the event that the Employee is terminated without Cause or resigns for Good Reason, the shares that would have vested during the Severance Period (as defined in Section 6.2 below) shall vest and become exercisable as of the date on which each of such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)termination.

Stock Options. As of At the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) each Company Stock Award that is a stock option to purchase shares of NPS Company Common Stock are (each a “Company Stock Option”) that is outstanding immediately prior to the Effective Time and is held by a Continuing Service Provider, whether or not then vested or exercisable (each, an “Assumed Option”) shall be assumed by Parent and converted into an option to acquire a number of shares of Parent Class A Common Stock, as provided herein. Each such Assumed Option shall be subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the same terms and conditions specified in as applied to the instruments pursuant Company Stock Option immediately prior to which they are issuablethe Effective Time, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate including the vesting of any NPS Option as a result of the Mergers schedule applicable thereto, except that (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iiiA) the number of shares of NPS Parent Class A Common Stock subject to each such NPS Option; Assumed Option shall be equal to the product obtained by multiplying (ivx) the number of shares of Company Common Stock subject to such Company Stock Option as of immediately prior to the Effective Time by (y) the Option Exchange Ratio (with the resulting number rounded down to the nearest whole share of Parent Class A Common Stock), and (B) the per share exercise price of each such NPS Option; Assumed Option shall be equal to the quotient obtained by dividing (vx) the date on per share exercise price at which each such NPS Assumed Option was granted; exercisable immediately prior to the Effective Time by (viy) the Option Exchange Ratio (with the resulting price per share rounded up to the nearest whole cent). It is the intention of the parties that each Assumed Option that qualified as a United States-based incentive stock option (as defined in Section 422 of the Code) shall continue to so qualify, to the maximum extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) permissible, following the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this AgreementEffective Time, and indicates further, that the extent assumption of any such acceleration. the Assumed Options shall be effected in a manner that satisfies the requirements of Section 3.2(b409A and 424(a) of the NPS Disclosure Letter also contains Code and the Treasury Regulations promulgated thereunder, and this Section 2.7(d)(i) will be construed consistent with this intent. Each Company Stock Option that is outstanding immediately prior to the Effective Time and is held by a complete Person that is not a Continuing Service Provider shall not be assumed by Parent and accurate description by virtue of the vesting schedule generally applicable to NPS OptionsMerger and without any further action on the part of Parent, Merger Sub One, Merger Sub Two, the Company or the holder thereof, shall be cancelled and shall specifically identify have no further effect following the Effective Time. The Company shall take all actions reasonably necessary to cause each NPS Company Stock Option with held by a vesting schedule Person that is different than such generally applicable vesting schedule (including not a description Continuing Employee to be cancelled and terminated as of each such different vesting schedule)the Effective Time, either pursuant to its terms or pursuant to an agreement with the holder thereof.

Stock Options. As Company shall take all action necessary so that each outstanding Company Stock Option, whether or not it is then vested or exercisable, shall be canceled immediately prior to the Effective Time, and shall thereafter represent (whether or not previously vested) only the right to receive from the Surviving Corporation, at the Effective Time or as soon as practicable thereafter, in consideration for the option's cancellation, an amount in cash equal to the product of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Company Common Stock subject to each such NPS Option; issuable upon exercise of the option multiplied by (ivii) the excess, if any, of the Common Stock Merger Consideration over the exercise price per share payable under the option, (with the amount payable subject to reduction for required withholding of each such NPS Option; (v) taxes). Promptly following the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as execution of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, Company shall mail to each person who is a holder of an outstanding Company Stock Option (whether or not then vested or exercisable) a letter in a form acceptable to Parent describing the treatment of and indicates payment for Company Stock Options pursuant to this Section 2.5(i) and providing instructions to use to obtain payment for the extent holder's Company Stock Options under this Agreement. These instructions shall require, inter alia, that as a condition of any such acceleration. Section 3.2(b) payment, the holder shall be required to deliver a release, in a form acceptable to Parent, by which the holder effectively relinquishes all rights in respect of the NPS Disclosure Letter also contains a complete holder's Company Stock Options upon payment in accordance with this Section 2.5(i). The Surviving Corporation shall cause the Paying Agent, at the Effective Time or as soon as reasonably practicable thereafter, to deliver to such holder the amount of cash provided for in the first sentence of this Section 2.5(i). Company shall take all actions necessary to cause all stock option, stock grant and accurate description stock purchase plans, and any other plan, program or arrangement with respect to equity securities of Company or any Subsidiary, to be terminated effective as of the vesting schedule generally applicable Effective Time and to NPS Optionsensure that no Person shall have any rights thereunder to acquire equity securities of Company, and shall specifically identify each NPS Option with a vesting schedule that is different than any Subsidiary, Parent or the Surviving Corporation after such generally applicable vesting schedule (including a description of each such different vesting schedule)time.

Stock Options. As BioCryst hereby agrees that it will grant a stock option to the Employee on December 31 of each year during the term of this Agreement. beginning with the year 1997, to purchase at least 25,000 shares of Common Stock of BioCryst, par value $0.01 per share (the "Common Stock"), from the authorized and unissued stock or treasury stock of BioCryst, based on the performance of the close Employee. The Board of business on February 13Directors of BioCryst shall determine, 2003: in its sole discretion, based upon the performance of the Employee and the results of operations of BioCryst for the immediately preceding twelve (i12) three million ninety one thousand three hundred sixty nine (3,091,369) months, the number of shares which may be purchased pursuant to each such option, provided the number of shares shall not in any case be less than 25,000 In addition, BioCryst shall also grant to the Employee an option to purchase 100,000 shares of NPS BioCryst Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect each of the following: (a) submission by BioCryst to NPS. Section 3.2(bthe Food and Drug Administration (the "FDA") of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: any new drug application; (ib) the name of the optionee in respect final approval of each such NPS Option; (ii) new drug application by the particular plan pursuant to which FDA. The exercise price per share for each such NPS Option was granted; (iii) the number share of shares of NPS BioCryst Common Stock subject to each such NPS Option; (iv) option shall be the exercise price of each such NPS Option; (v) fair market value thereof on the date on such additional option is granted. The parties intend for the options granted pursuant to this Agreement (the "Options") to qualify as "incentive stock options," as that term is defined in Section 422 of the Internal Revenue Code of 1986, as amended ("Section 422"). The parties understand that the portion of any Option, together with the portion of any other incentive stock option granted by BioCryst and its parent and subsidiary corporations, if any, which each may become exercisable in any year in excess of an aggregate of $100,000 fair market value, determined as of the date such NPS Option or other option, as the case may be, was granted, may not be treated as an incentive stock option under Section 422. The Options may be exercised and the Common Stock may be purchased by the Employee as a result of such exercise only within the periods and to the extent hereinafter set forth: (c) Each Option shall be 25% exercisable one year after the date it was granted, and the remaining seventy-five percent (75%) shall vest and become exercisable at the rate of 1/48th per month, commencing with the thirteenth (13th) month after the date such Option was granted; (vi) , and continuing to vest for the extent to which each such NPS Option is succeeding months until fully vested and unvested as exercisable. Notwithstanding the foregoing, in the event of a recent practicable date; Change in Control or Structure, as defined below, or as set forth in subparagraphs (viid) or (e) below, the date on which each such NPS Option expires and (viii) whether the exercisability entire amount of each such NPS Option will be accelerated shall become immediately exercisable. (d) If the Employee suffers a period of permanent disability, as defined in any way by paragraph 4(b) below, the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) entire amount of the NPS Disclosure Letter also contains a complete Option may be exercised at any time after termination for such disability and accurate description before the earlier of twenty-four (24) months or the expiration date of the vesting schedule generally applicable Option. (e) In the event of the death of the Employee, the executor or administrator of the estate of the Employee, or other reliable transferee, shall have the right to NPS Optionsexercise each Option, and in its entirety, within the earlier of twenty-four (24) months after the Employee's death or before the original expiration of the Option. Except as provided in this subparagraph (e), the Employee shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)not have the right to transfer any Option.

Stock Options. As Options to purchase Ordinary Shares shall be granted from time to time under such arrangements, contracts or plans as approved by the Board of Directors (including the Sung Director). Each recipient of an option to purchase Ordinary Shares under the Company’s stock option plan (the “Plan”) shall enter into an option agreement with the Company. Unless otherwise expressly approved by the Board of Directors, including the Sungy Director, Ordinary Shares purchased upon exercise of options to purchase Ordinary Shares of the close Company issued after the Closing to employees of business on February 13the Company under the Plan or otherwise, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are shall be subject to issuance pursuant standard restrictions including but not limited to outstanding NPS Optionsright of first refusal upon transfer and market stand-off, (ii) no shares and upon exercise of NPS Common Stock are such options, each optionee shall, if required by the Company, sign an Adoption Agreement to adopt this Agreement and the Right of First Refusal and Co-Sale Agreement entered into by and among the Group Companies, the Founders’ BVI Holding Entity, the Investor and the Founders dated as of even date herewith. Furthermore, unless otherwise expressly approved by the Board of Directors, including the Sungy Director, options to purchase Ordinary Shares of the Company issued to employees of the Company under the Plan or otherwise, shall also be subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to four (4) year vesting provisions as follows: twenty-five percent (25%) of the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance such options shall vest on the terms first anniversary of the issuance of such options and conditions specified in one forty-eighth (1/48th) of the instruments pursuant shares subject to which they are issuablesuch options shall vest monthly over the next three (3) years. Unless otherwise expressly approved by the Board of Directors, would including the Sungy Director, there shall be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements acceleration of any character to which NPS is bound obligating NPS to accelerate the vesting of shares subject to options granted under the Plan. The Company shall have a repurchase option on any NPS Option as a result unvested shares at the lower of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise original purchase price of each such NPS Option; (v) shares paid by such optionee and the date on which each fair market value of such NPS Option was granted; (vi) shares at the extent time the Company exercises its right to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way repurchase. The Company shall exercise this repurchase option unless otherwise approved by the transactions contemplated by this AgreementBoard of Directors, and indicates including the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Sungy Director.

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety At the Effective Time, all issued and outstanding stock options (collectively, the “Southwest Options”) issued by Southwest, whether under the Southwest 2004 Stock Incentive Plan or not under any plan, whether vested or unvested, will, by virtue of the Merger and without any further action on the part of Southwest, Acquisition Co., Parent or the holder thereof, be assumed by the Parent in such manner that the Parent (i) is a corporation “assuming a stock option in a transaction to which Section 424(a) applied” within the meaning of Section 424 of the Code, or (ii) to the extent that Section 424 of the Code does not apply to any such Southwest Options, would be such a corporation were Section 424 of the Code applicable to such Southwest Options. From and after the Effective Time, all references to Southwest in the Southwest Options will be deemed to refer to the Parent (other than for purposes of determining whether there has been a change in control of Southwest). The Southwest Options assumed by the Parent (collectively, the “Substitute Options”) will be exercisable upon the same terms and conditions as under the Southwest Options (including provisions thereof, if any, relating to the acceleration of vesting upon a change in control of Parent) except that (i) such Southwest Options will entitle the holder to purchase from the Parent one thousand three hundred sixty nine (3,091,3691) share of Parent Common Stock (rounded to the nearest whole number of such shares) for every two (2) shares of NPS Southwest Common Stock that are subject issuable upon exercise of the Southwest Options as in effect immediately prior to issuance pursuant to outstanding NPS Optionsthe Effective Time, and (ii) no shares the option exercise price per share of NPS Parent Common Stock are subject shall be an amount (rounded to issuance the nearest full cent) equal to the option exercise price per share of Southwest Common Stock in effect immediately prior to the Effective Time multiplied by two (2); provided, however, that in the case of any Southwest Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code (“incentive stock options”), the option price, the number of shares purchasable pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, such option and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified of exercise of such options shall be determined in the instruments pursuant order to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights comply with respect to NPS. Section 3.2(b424(a) of the NPS Disclosure Letter contains Code. As promptly as practicable after the Effective Time, the Parent will issue to each holder of a complete and accurate list Southwest Option a written instrument informing such holder of the following information with respect to each NPS Option outstanding as assumption by Parent of February 13, 2003: (i) the name of the optionee in respect of each such NPS Southwest Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule).

Stock Options. As (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock 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 same ------------- 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 close Company, each optionee shall be deemed, solely for the purposes of business on February 13such Parent Option, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Optionsbe an employee or director, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding optionsas the case may be, rights or warrants to purchase NPS Common Stock issued other than pursuant to for the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect entire term of each such NPS Parent Option; (ii) ), as were applicable under such Company Option, the particular plan pursuant number of whole shares of Parent Common Stock equal to which each such NPS Option was granted; (iii) the number of shares of NPS Company Common Stock subject that were issuable upon exercise of such Company Option immediately prior to each 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 NPS Option; (iv) Parent Option shall be equal to the exercise price per share of each Company Common Stock at which such NPS Option; (v) the date on which each such NPS Company Option was granted; exercisable immediately prior to the Effective Time divided by the Exchange Ratio (vi) calculated, if the extent to which each such NPS Option Election is vested made, as set forth above, and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way 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 transactions terms of such Company Option or as is contemplated by this AgreementSection 2.2(a)), and indicates regardless of whether such circumstances are to occur before or after the extent Effective Time, or otherwise amend the terms of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS outstanding Company Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule).

Stock Options. As of the close of business on February 13, 2003: (ia) three million ninety one thousand three hundred sixty nine (3,091,369) Each outstanding option to purchase shares of NPS MediaOne Common Stock are subject 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 issuance pursuant provide that, at the Effective Time, each MediaOne Stock Option outstanding immediately prior to outstanding NPS Optionsthe Effective Time shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such MediaOne Stock Option (ii) no including terms regarding vesting), the same number of shares of NPS Comcast Common Stock are subject as the holder of such MediaOne Stock Option would have been entitled to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than receive pursuant to the NPS Merger had such holder exercised such MediaOne Stock Option Plansin 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 "Adjusted Option"); provided that any fractional share of Comcast Common Stock resulting from an aggregation of all the shares of a holder subject to MediaOne Stock Option shall be rounded up to the nearest whole share, and (iii) thirty eight thousand seven hundred twenty five (38,725) provided further that, for any MediaOne 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 of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject purchasable pursuant to issuance as aforesaid, upon issuance on such option and the terms and conditions specified of exercise of such option shall be determined in the instruments pursuant order to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result comply with Section 424 of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Code.

Stock Options. As Company shall take all action necessary so that each outstanding Company Stock Option, whether or not it is then vested or exercisable, shall be canceled immediately prior to the Effective Time, and shall thereafter represent (whether or not previously vested) only the right to receive from the Surviving Corporation, at the Effective Time or as soon as practicable thereafter, in consideration for the option's cancellation, an amount in cash equal to the product of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Company Common Stock subject to each such NPS Option; issuable upon exercise of the option multiplied by (ivii) the excess, if any, of the Common Stock Merger Consideration over the exercise price per share payable under the option, (with the amount payable subject to reduction for required withholding of each such NPS Option; (v) taxes). Promptly following the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as execution of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, Company shall mail to each person who is a holder of an outstanding Company Stock Option (whether or not then vested or exercisable) a letter in a form acceptable to Parent describing the treatment of and indicates payment for Company Stock Options pursuant to this Section 2.5(i) and providing instructions to use to obtain payment for the extent holder's Company Stock Options under this Agreement. These instructions shall require, inter alia, that as a condition of any such acceleration. Section 3.2(b) payment, the holder shall be required to deliver a release, in a form acceptable to Parent, by which the holder effectively relinquishes all rights in respect of the NPS Disclosure Letter also contains a complete holder's Company Stock Options upon payment in accordance with this Section 2.5(i). The Surviving Corporation shall cause the Paying Agent, at the Effective Time or as soon as reasonably practicable thereafter, to deliver to such holder the amount of cash provided for in the first sentence of this Section 2.5(i). Company shall take all actions necessary to cause all stock option, stock grant and accurate description stock purchase plans, and any other plan, program or arrangement with respect to equity securities of Company or any Subsidiary, to be terminated effective as of the vesting schedule generally applicable Effective Time and to NPS Optionsensure that no Person shall have any rights thereunder to acquire equity securities of Company, and shall specifically identify each NPS Option with a vesting schedule that is different than any Subsidiary, Parent or the Surviving Corporation after such generally applicable vesting schedule (including a description of each such different vesting schedule).time. Article 3

Stock Options. As Prior to the Effective Time, the Company's Board of the close of business on February 13Directors (or, 2003: if appropriate, any committee thereof) shall adopt appropriate resolutions and take all other actions necessary to (i) three million ninety one thousand three hundred sixty nine provide for the cancellation or exercise, effective at the Effective Time, of all the outstanding stock options or similar rights (3,091,369the "Options") shares heretofore granted under the Equity Incentive Plan of NPS Common Omega Holdings, Inc. (the "Stock are subject to issuance pursuant to outstanding NPS OptionsOption Plan"), without any payment therefor except as otherwise provided in this Section 4.3, and (ii) terminate the Stock Option Plan as of the Effective Time. Each Option, to the extent unexercised as of the Effective Time, shall thereafter no shares of NPS Common Stock are longer be exercisable but shall entitle each holder thereof, in cancellation and settlement therefor, to a payment in cash by the Company (subject to issuance any applicable withholding taxes), at the Effective Time, equal to the product of (i) the total number of Company Common Shares as to which that Option remains unexercised and (ii) the excess, if any, of (A) the Merger Price over (B) the exercise price per Company Common Share subject to such Option (such amounts payable hereunder being referred to as the "Option Payments"). At the Effective Time, Parent or Merger Sub shall deposit, or cause to be deposited, with the Escrow and Paying Agent the aggregate Option Payments due pursuant to outstanding options, rights or warrants this Section 4.3 (net of the aggregate principal amount of the Management Notes plus accrued interest thereon to purchase NPS Common Stock issued other than the Effective Time held by holders of Options and not otherwise deducted from the Merger Price pursuant to Section 4.2). Upon surrender of the NPS certificate for an Option Plansby the holder of such Option to the Escrow and Paying Agent, the Escrow and (iii) thirty eight thousand seven hundred twenty five (38,725) shares Paying Agent shall pay to such Option holder, on behalf of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock Company and subject to issuance any applicable withholding taxes, the Option Payments due under this Section 4.3 with respect to such Option. Notwithstanding the foregoing, (i) the Escrow and Paying Agent shall not pay to the Option holder that portion of the Option Payments represented by the Indemnity Escrow and the Reimbursement Fund until such time as aforesaid, upon issuance on such amounts are distributable pursuant to the terms and conditions specified in of the instruments Indemnity Escrow Agreement, and (ii) the amount to be paid pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements this Section 4.3 to any obligor on a Management Note in respect of any character the Options held by such obligor shall (solely to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option extent such obligor's Merger Price was not reduced as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan Management Note pursuant to which each such NPS Option was granted; (iiiSection 4.2) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way reduced by the transactions contemplated by this Agreement, principal amount of such Management Note plus accrued interest thereon to the Effective Time and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and Management Note shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)be deemed cancelled thereafter.

Stock Options. As The Merger Agreement provides that, as soon as practicable following the date of the close Merger Agreement, the Board (or, if appropriate, any committee administering the Company Stock Plans (as defined below)) shall adopt such resolutions or take such other actions as are required to adjust the terms of business on February 13, 2003: all outstanding Company Stock Options and all outstanding Company SARs (as defined below) to provide that (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares each outstanding Company Stock Option may be exercised, whether or not such Company Stock Option is vested, immediately prior to the acceptance for payment of NPS Common Stock are Shares pursuant to the Offer, contingent on and subject to issuance pursuant to outstanding NPS Optionsthe consummation of the Offer, PROVIDED that the Shares issued upon such exercise are tendered into the Offer and not withdrawn and (ii) no shares each Company Stock Option and Company SAR outstanding that is not exercised prior to the acceptance for payment of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than Shares pursuant to the NPS Option PlansOffer shall be canceled effective immediately prior to the acceptance for payment of Shares pursuant to the Offer with the holder thereof becoming entitled to receive an amount of cash equal to the product of (x) the excess, and if any, of (iiiA) thirty eight thousand seven hundred twenty five the Per Share Merger Consideration over (38,725B) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock exercise price per Share subject to issuance as aforesaidsuch Company Stock Option or Company SAR, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers multiplied by (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iiiy) the number of shares Shares issuable pursuant to the unexercised portion of NPS Common such Company Stock Option or Company SAR; PROVIDED, HOWEVER, that no cash payment will be made with respect to any Company SAR that is related to a Company Stock Option in respect of which such a cash payment is made. All amounts payable pursuant to this paragraph will be subject to each any required withholding of taxes or proof of eligibility of exemption therefrom and will be paid at or as soon as practicable following the Effective Time, but in any event within one business day following the Effective Time, without interest. The Company will use its best efforts to obtain all consents of the holders of the Company Stock Options if such NPS Option; consents are determined to be necessary to effectuate the foregoing as mutually agreed by Parent and the Company. The cancelation of a Company Stock Option in exchange for the cash payment described in the preceding paragraph will be deemed a release of any and all rights the holder of such Company Stock Option had or may have had in respect thereof, and any necessary consents from all such holders shall so provide. Notwithstanding anything to the contrary contained in the Merger Agreement, payment shall, at Parent's request, be withheld in respect of any Company Stock Option until all necessary consents are obtained. As soon as practicable following the date of the Merger Agreement, the Board (ivor, if appropriate, any committee administering the Company Stock Plans) will take or cause to be taken such actions as are required to cause (x) the exercise price Company Stock Plans to terminate as of each such NPS Option; the Effective Time and (vy) the date on which each such NPS Option was granted; (vi) provisions in any other Company benefit plan providing for the extent issuance, transfer or grant of any capital stock of the Company or any interest in respect of any capital stock of the Company to which each such NPS Option is vested and unvested be deleted as of the Effective Time. The Company will ensure that following the Effective Time no holder of a recent practicable date; (vii) the date on which each such NPS Company Stock Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated or Company SAR or any participant in any way by the transactions contemplated by this Agreement, and indicates the extent of Company Stock Plan or other Company benefit plan will have any such acceleration. Section 3.2(b) right thereunder to acquire any capital stock of the NPS Disclosure Letter also contains a complete and accurate description of Company or the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Surviving Corporation.

Stock Options. Prior to the purchase of shares of Common Stock pursuant to the Offer, the Board of Directors of the Company (or, if appropriate, any committee administering the Stock Option Plans) shall adopt such resolutions or take such other actions as are necessary to adjust the terms of all outstanding stock options to purchase Common Stock ("Options") heretofore granted to employees and directors under any stock option plan, program or arrangement of the Company (all such stock option plans, employee stock purchase plans, programs and arrangements shall be collectively referred to as the "Stock Option Plans") to provide for the cancellation of such Options as set forth in this Section 2.07. As of the close date of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) the acquisition of shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Offer, each Option Plansthen outstanding, and whether or not then fully exercisable, shall be canceled in exchange for a payment from the Company (iiisubject to any applicable withholding taxes) thirty eight thousand seven hundred twenty five equal to the product of (38,725x) the total number of shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaidsuch Option and (y) the excess of the consideration paid in the Offer over the exercise price per share of Common Stock subject to such Option, upon issuance payable in cash on the terms and conditions specified date of acquisition of the shares of Common Stock pursuant to the Offer. The Purchaser shall make available to the Company on the date of payment for the shares of Common Stock pursuant to the Offer, in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements form of any character to which NPS is bound obligating NPS to accelerate a loan payable on the vesting earlier of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name Effective Time, and (ii) May 31, 1996, bearing interest per annum at the prime rate of the optionee Firstar Bank Milwaukee, N.A., cash (except for cash payments to be made pursuant to the penultimate sentence of this Section 2.07) in an aggregate amount necessary to make the payments pursuant to the preceding sentence. Except as provided herein, or as otherwise agreed to by the parties (i) the Stock Option Plans shall terminate as of the Effective Time and the provisions in any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of each such NPS Option; the capital stock of the Company or any subsidiary, shall be deleted as of the Effective Time, and (ii) the particular plan Company shall ensure that following the Effective Time no holder of an Option or any participant in any Stock Option Plan or other plans, programs or arrangements shall have any right thereunder to acquire equity securities of the Company, the Surviving Corporation or any subsidiary thereof. Notwithstanding any provision of this Section 2.07 to the contrary, any Option granted to an officer of the Company listed on Schedule 2.07 within six months and one day of the date such Option would otherwise be canceled pursuant to which each such NPS Option was granted; (iii) this Section 2.07 shall be canceled and the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) payments provided for in this Section 2.07 shall be made six months and one day following the date of such grant. At the Effective Time, pursuant to an escrow agreement to be entered into by the parties hereto, the Purchaser shall deposit or cause to be deposited with an escrow agent reasonably acceptable to the Company, to be selected by the Purchaser, cash in an aggregate amount necessary to make the payments pursuant to the preceding sentence. Except as may be set forth on which each such NPS Option was granted; (viSchedule 2.07(b), or as contemplated by Section 7.01(a) hereof, no consent of any stockholder of the extent to which each such NPS Option Company is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will or may be accelerated required in any way by connection with the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)2.07.

Stock Options. As (a) At the Effective Time, each of the close then outstanding Company Options shall by virtue of business the Merger, and without any further action on February 13the part of any holder thereof, 2003: be assumed by Parent and converted into an option to subscribe for that number of shares of Parent Stock (a "Parent Option") obtained by multiplying the number of shares of Company Common Stock underlying each such Company Option by the Exchange Ratio. If the foregoing calculation results in a Parent Option being exercisable for a fraction of a share of Parent Stock, then the number of shares of Parent Stock subject to such option shall be rounded down to the nearest whole number of shares. The exercise price of each Parent Option shall be equal to the exercise price of the Company Option from which such Parent Option was converted divided by the Exchange Ratio, rounded to the nearest whole cent. Except as otherwise set forth in this Section 1.4, the term and vesting schedule, status as an "incentive stock option" under Section 422 of the Code, if applicable, and all other terms and conditions of Company Options will, to the extent permitted by law and otherwise reasonably practicable, be unchanged. An optionholder's continuous employment with the Company shall be credited as employment with Parent for purposes of vesting of the Parent Options. Other than Company Options which shall become vested and exercisable pursuant to acceleration provisions not entered into in contemplation of the Merger, no Company Options shall become vested or exercisable solely as a result of the Merger. The Company will take, or cause to be taken, all actions which are necessary, proper or advisable under the Stock Plans to make effective the transactions contemplated by this Section 1.4. Item 1.4(a) of the Company Disclosure Letter (as hereinafter defined) sets forth the name of each holder of Company Options, the exercise price of such holder's Company Options, and the number of shares of Company Common Stock underlying such holder's Company Options which are (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Optionscurrently vested, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to will vest upon the NPS Option PlansClosing, and (iii) thirty eight thousand seven hundred twenty five will be unvested immediately following the Closing, and for the Company Options described in clause (38,725) shares iii), the remaining vesting periods and percentages for such options. The assumption by Parent of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares Company Options and their conversion into Parent Options by virtue of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments Merger is an obligation of Parent pursuant to which they are issuable, would be duly authorized, validly issued, fully paid the Merger and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule).

Stock Options. As At the Effective Time, each PAS Option then outstanding shall, by virtue of the close Merger and without any further action on the part of business on February 13PAS or the holder of any such PAS Option, 2003: be exercisable upon the same terms and conditions as under the applicable PAS stock option plan and the applicable option agreement issued thereunder, except that (i) three million ninety one thousand three hundred sixty nine each such assumed PAS Option (3,091,369a "PAS Rollover Option") shall be exercisable for that whole number of shares of NPS USSC Common Stock are (rounded to the nearest whole share) into which the number of shares of PAS Common Stock subject to issuance pursuant such PAS Rollover Option immediately prior to outstanding NPS Optionsthe Effective Time would be converted under this Article II, (ii) no shares the option price per share of NPS USSC Common Stock are shall be an amount equal to the option price per share of PAS Common stock subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant such PAS Rollover Option divided by the Exchange Ratio (the option price per share being rounded to the NPS Option Plansnearest full cent), and (iii) thirty eight thousand seven hundred twenty five (38,725each PAS Rollover Option referred to on Schedule 2.05(f)(1) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaidshall, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers Merger, be vested to the extent of 50% of the shares of USSC Common Stock for which such option shall be exercisable, (whether alone iv) each PAS Rollover Option referred to on Schedule 2.05(f)(2) shall, as a result of the Merger, be vested to the extent of 60% of the shares of USSC Common stock for which such option shall be exercisable, (v) each PAS Rollover Option referred to on Schedule 2.05(f)(3) shall, as a result of the Merger, be vested to the extent of 75% of the shares of USSC Common Stock for which such option shall be exercisable, (vi) each PAS Rollover Option referred to on Schedule 2.05(f)(4) shall, as a result of the Merger, be vested to the extent of 100% of the shares of USSC Common Stock for which such option shall be exercisable, (vii) any PAS Rollover Option referred to on Schedule 2.05(f)(1), 2.05(f)(2) or upon 2.05(f)(3) held by a PAS employee whose employment is terminated without cause after the occurrence Effective Time and prior to the second anniversary of any additional the Effective Time shall become fully vested on the date of such termination, and (viii) except as stated in clause (vii), all PAS Rollover Options referred to on Schedule 2.05(f)(1), 2.05(f)(2) and 2,05(f)(3), shall, to the extent not vested (pursuant to the terms thereof or subsequent eventspursuant to the provisions of this Section 2.05(f). There ) as of the Effective Time, vest in equal monthly installments over the 24 month period following the Effective Time, PAS represents and warrants that the remainder of the PAS Options (i.e., those not referred to on Schedule 2.05(f)(1), (2), (3), or (4)) are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect referred to NPS. Section 3.2(bon Schedule 2.05(f)(5) and will not be affected by the transactions contemplated hereby except as provided in clauses (i) and (ii) of the NPS Disclosure Letter contains a complete and accurate list first sentence of this Section 2.05(f). No payment shall be made for fractional interests, rather, the aggregate number of shares of USSC Common Stock to be issued under any PAS Rollover Option shall be rounded to the nearest whole number. In the event any PAS Rollover Options shall expire without having been exercised on or prior to the second anniversary of the following information with respect to each NPS Option outstanding as Effective Time, USSC shall calculate the value of February 13, 2003: such expired PAS Rollover Options (i) which value shall be determined based upon the name excess of the optionee in respect then current fair market value for shares of each USSC Common Stock, as determined by reference to the average of the closing prices of a share of USSC Common Stock, as reported by THE WALL STREET JOURNAL under the New York Stock Exchange composite transactions for the seven (7) trading days ending on one (1) business day prior to such NPS Option; (ii) second anniversary date, over the particular plan pursuant to which each such NPS Option was granted; (iii) exercise price, multiplied by the number of shares of NPS USSC Common Stock for which such lapsed PAS Rollover Options would have been exercisable) and distribute the value thereof, in cash, pro rata to the holders of PAS Capital Stock as of the Effective Time and the holders of PAS Rollover Options as of the Effective Time (excluding the holder or holders of lapsed PAS Rollover Options). USSC shall either include the shares of USSC Common Stock subject to each the PAS Rollover Options in the Form S-3 to be filed pursuant to Section 6.01 hereof, or as promptly as reasonably practicable following the Effective Time, file a Form S-8 registration statement with the Securities and Exchange Commission registering the issuance of such NPS Option; (iv) the shares upon exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS PAS Rollover Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule).

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine On the Effective Date, each option to acquire Main Street Common Stock which is then outstanding (3,091,369) "Main Street Option"), whether or not exercisable, shall cease to represent a right to acquire shares of NPS Main Street Common Stock are subject and shall be converted automatically into an option to issuance pursuant to outstanding NPS Optionspurchase shares of Sovereign Common Stock and the corresponding number of Sovereign Stock Purchase Rights, and Sovereign shall assume each Main Street Option, in accordance with the terms of the applicable Main Street Stock Option Plan and/or stock option agreement by which it is evidenced, except that from and after the Effective Date, (i) Sovereign and its Board of Directors or a duly authorized committee thereof shall be substituted for Main Street and Main Street's Board of Directors or duly authorized committee thereof administering such Main Street Stock Option Plan, (ii) no each Main Street Option assumed by Sovereign may be exercised solely for shares of NPS Sovereign Common Stock are subject to issuance pursuant to outstanding optionsand Sovereign Stock Purchase Rights, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Sovereign Common Stock subject to each such NPS Option; Main Street Option shall be equal to the number of shares of Main Street Common Stock subject to such Main Street Option immediately prior to the Effective Date multiplied by the Common Stock Exchange Ratio, provided that any fractional shares of Sovereign Common Stock resulting from such multiplication shall be rounded down to the nearest share, and (iv) the per share exercise price of under each such NPS Option; (v) Main Street Option shall be adjusted by dividing the date on which per share exercise price under each such NPS Main Street Option was granted; by the Common Stock Exchange Ratio, provided that such exercise price shall be rounded down to the nearest cent. Notwithstanding clauses (viiii) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(biv) of the NPS Disclosure Letter also contains a complete and accurate description preceding sentence, each Main Street Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the vesting schedule generally applicable to NPS OptionsIRC, and shall specifically identify each NPS Option with the regulations promulgated thereunder, so as not to constitute a vesting schedule that is different than such generally applicable vesting schedule (including a description modification, extension or renewal of each such different vesting schedulethe option within the meaning of Section 424(h) of the IRC. Sovereign and Main Street agree to take all necessary steps to effect the foregoing provisions of this Section 1.02(g).

Stock Options. As (a) At the Effective Time, all rights with respect to FEI Common Stock under FEI Options then outstanding shall be converted into and become rights with respect to Veeco Shares, and Veeco shall assume each such FEI Option in accordance with the terms (as in effect as of the close date of business on February 13this Merger Agreement) of the stock option plan or other arrangement under which it was issued and the terms of the stock option agreement by which it is evidenced. From and after the Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Optionseach FEI Option assumed by Veeco may be exercised by the holder thereof solely for Veeco Shares, (ii) no shares the number of NPS Common Stock are Veeco Shares subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant each such FEI Option shall be equal to the NPS Option Plans, and product of (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iiiA) the number of shares of NPS FEI Common Stock subject to such FEI Option immediately prior to the Effective Time multiplied by (B) the Exchange Ratio, rounding to the nearest whole share, (iii) the per share exercise price under each such NPS Option; FEI Option shall be adjusted by dividing (x) the per share exercise price under such FEI Option by (y) the Exchange Ratio and rounding to the nearest cent and (iv) any restriction on the exercise price or transfer of each any such NPS Option; (v) FEI Option shall continue in full force and effect in accordance with its terms and the term, exercisability, vesting schedule and other provisions of or relating to such FEI Option shall otherwise remain unchanged. Veeco shall file with the SEC, no later than the date on which each such NPS Option was granted; (vi) the extent Merger becomes effective, a registration statement on Form S-8 relating to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated Veeco Shares issuable with respect to FEI Options assumed by Veeco in any way by the transactions contemplated by accordance with this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule5.05(a).

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 close Company (or, if appropriate, any committee administering the Company's 1989 Non-Qualified Stock Option Plan (the "NQSO Plan") or 1996 Incentive Stock Option Plan (the "ISO Plan," and together with the NQSO Plan, the "Company Option Plans") shall adopt such resolutions or take such other actions as may be required to adjust the terms of business on February 13, 2003: all outstanding Company Options (ias defined in Section 3.03) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Company Option PlansPlans and related agreements, to provide that at the Effective Time, each Company Option outstanding (whether or not vested and (iiiexercisable) thirty eight thousand seven hundred twenty five (38,725) immediately prior to the Effective Time shall at the Effective Time cease to represent a right to acquire shares of NPS Company Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS and shall be converted automatically into an option (a "Continuing Option") to acquire Parent Common Stock subject to issuance in an amount and at an exercise price determined as aforesaid, upon issuance provided in the immediately following sentence (and on substantially the same terms and conditions specified in as were applicable under such Company Option Plan and the instruments pursuant agreements evidencing grants thereunder), subject to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent eventsSection 1.02(b). There are no At the Effective Time, if the holder of a Company Option which is then outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights and unexercised has not timely elected (with respect to NPS. Section 3.2(bCompany Options granted under the NQSO Plan) of the NPS Disclosure Letter contains a complete and accurate list of the following information or has not timely requested (with respect to each NPS 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 outstanding as described in subsection (b) of February 13this Section 1.02, 2003: (i) then such Company Option shall, in accordance with the name provisions of the optionee in respect of each such NPS Option; NQSO Plan or the ISO Plan, whichever is applicable, become a Continuing Option to acquire (ii) the particular plan pursuant to which each such NPS Option was granted; (iiix) the number of shares of NPS Parent Common Stock equal to the product of (i) the number of shares of Company Common Stock subject to each such NPS Option; Company Option immediately prior to the Effective Time multiplied by (ivii) the Merger Consideration (a partial share shall be rounded down to the next lower whole share), with (y) an exercise price equal to the quotient of (i) the original exercise price per share (the "Original Exercise Price") of Company Common Stock subject to such Company 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 rounded to the next higher whole cent). In the case of each Company Options intended to be incentive stock options (as defined in Section 422 of the Code), the exercise price, number of shares of Parent Common Stock subject to such NPS Option; (v) Continuing Option and terms and conditions or exercise of such Continuing Option shall be determined in order to comply with the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as requirements of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b424(a) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Code.

Stock Options. As of (a) After the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) each ------------- outstanding option to purchase shares of NPS Concentric Common Stock are subject granted under any Concentric stock option or compensation plans or arrangements (a "CONCENTRIC STOCK OPTION"), whether or not exercisable or vested, shall be adjusted as necessary to issuance pursuant provide that, at the Effective Time, each Concentric Stock Option outstanding immediately prior to outstanding NPS Optionsthe 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 (ii) no including terms regarding vesting), the same number of shares of NPS Newco Common Stock are subject as the holder of such Concentric Stock Option would have been entitled to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than receive pursuant to the NPS Mergers had such holder exercised such Concentric Stock Option Plansin 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 (iii) thirty eight thousand seven hundred twenty five (38,725) provided further that, for any Concentric 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 of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject purchasable pursuant to issuance as aforesaid, upon issuance on such option and the terms and conditions specified of exercise of such option shall be determined in the instruments pursuant order to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result comply with Section 424 of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Code.

Stock Options. As of (a) At the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS each outstanding option to purchase Drilex Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than that has been granted pursuant to the NPS Drilex Stock Plan ("Drilex Stock Option") shall be treated as set forth in this Section 5.10. Drilex shall not grant any stock appreciation rights or limited stock appreciation rights and shall not permit cash payments to holders of Drilex Stock Options in lieu of the treatment thereof as provided in this Section 5.10. (b) The portion, if any, of each Drilex Stock Option Plansthat is exercisable as of the Effective Time in accordance with the terms thereof shall be assumed by Bakex Xxxhxx. Xx so assumed, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject such option shall be deemed to issuance as aforesaidconstitute an option to acquire, upon issuance on the same terms and conditions specified in the instruments pursuant as were applicable under such Drilex Stock Option, a number of shares of Bakex Xxxhxx Xxxmon Stock equal to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Drilex Common Stock purchasable pursuant to such exercisable portion of such Drilex Stock Option multiplied by the Exchange Ratio, at a price per share equal to the per-share exercise price for the shares of Drilex Common Stock purchasable pursuant to such Drilex Stock Option divided by the Exchange Ratio; 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 422-424 of the Code, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code; and provided further, that the number of shares of Bakex Xxxhxx Xxxmon Stock that may be purchased upon exercise of such Drilex Stock Option shall not include any fractional share and, upon exercise of such Drilex Stock Option, a cash payment shall be made for any fractional share based upon the closing price of a share of Bakex Xxxhxx Xxxmon Stock on the NYSE on the last trading day of the calendar month immediately preceding the date of exercise. After the Effective Time, except as provided above in this Section 5.10(b), each assumed option shall be exercisable upon the same terms and conditions as were applicable to the related Drilex Stock Option immediately prior to the Effective Time. (c) Drilex shall take all reasonable action as may be required such that the portion, if any, of each Drilex Stock Option that is not exercisable as of the Effective Time (an "Unexercisable Option") shall be canceled in exchange for the number of shares of Bakex Xxxhxx Xxxmon Stock, decreased to the nearest whole share, having an aggregate market value at the Effective Time (based on the Average Closing Price) equal to the number of shares of Drilex Common Stock subject to each such NPS Option; (iv) Unexercisable Option multiplied by the excess, if any, of the Drilex Value over the per-share exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) thereof. To the extent the terms of an Unexercisable Option allow for withholding to which each satisfy tax obligations, such NPS Option is vested and unvested as of a recent practicable date; (vii) rights shall apply to the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated consideration provided for by this Agreement, and indicates the extent Section 5.10(c). (d) Bakex Xxxhxx xxxll take all corporate action necessary to reserve for issuance a sufficient number of any such acceleration. Section 3.2(b) shares of Bakex Xxxhxx Xxxmon Stock for delivery upon exercise of the NPS Disclosure Letter also contains Drilex Stock Options assumed in accordance with this Section 5.10. As soon as practicable after the Effective Time, Bakex Xxxhxx xxxll file with the SEC a complete registration statement on Form S-8 (or any successor form) or another appropriate form with respect to the shares of Bakex Xxxhxx Xxxmon Stock subject to the Drilex Stock Options and accurate description shall use its best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule).prospectus or prospectuses contained therein) for so long as Drilex Stock Options remain outstanding. 28 35 5.11

Stock Options. As of the close of business on February 13, 2003: With respect to each outstanding (ia) three million ninety one thousand three hundred sixty nine (3,091,369) option to purchase shares of NPS Target Common Stock are subject to issuance granted by Target pursuant to outstanding NPS Target's 1996 Stock Option Plan and Directors Stock Option Plan (collectively, the "Stock Option Plans") (collectively, the "Options, ") (iiwhether or not then exercisable) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant immediately prior to the NPS Effective Time, Target shall (a) cancel immediately prior to the Effective Time each Option Plansthat it has the right to cancel, and (iiib) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) Options that it does not have the right to cancel, use its commercially reasonable efforts to obtain the consent of the NPS Disclosure Letter contains a complete holder of such Option to its cancellation and, subject to such consent, cancel such Option immediately prior to the Effective Time. In consideration for the cancellation of such Option, Target agrees to and accurate list shall pay to the holder of each canceled Option, at the following information with respect Effective Time (whether or not such Option was exercisable immediately prior to each NPS Option outstanding as its cancellation), an amount in cash equal to the product of February 13, 2003: (i) the name excess, if any, of the optionee in respect of each Per Share Amount over the per-share exercise price for such NPS Option; , and (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Target Common Stock previously subject to each such NPS Option; . Each Option which is not canceled as described above shall continue to have, and be subject to, the same terms and conditions set forth in the stock option plans and agreements pursuant to which such Options were issued as in effect immediately prior to the Effective Time, except that such Options shall be exercisable for an amount in cash equal to the product of (ivi) the excess, if any, of the Per Share Amount over the per-share exercise price of each for such NPS Option; , multiplied by (vii) the date on which each number of shares of Target Common Stock previously subject to such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Option.

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine Except as provided in Sections 5.18(b) and (3,091,369c), immediately prior to the Effective Time each outstanding Company Option other than Assumed Options (each, a “Terminated Option”) shares under the Option Plans shall terminate. The Company shall take all necessary actions (including providing all required notices and obtaining any required consents) to ensure that all outstanding Terminated Options, including any Exchange Options which are not Assumed Options, are terminated immediately prior to the Effective Time. In the case of NPS Common Stock are subject any holder of a Terminated Option, the parties shall take steps to issuance enable the holder thereof to exercise the option as of the Effective Time (including any portion thereof that becomes exercisable in connection with the Merger) on a basis that enables the holder effectively to participate in receiving the Merger Consideration by allowing the holder to pay such holder’s exercise price in full or in part through delivering an exercise notice to the Company prior to the Closing Date which provides for an offset to the portion of the Merger Consideration that would otherwise be payable to such holder pursuant to outstanding NPS Options, Section 1.6(b) had such holder delivered a check for the full exercise price of such Terminated Option (ii) no shares net of NPS Common Stock are subject such holder’s Pro Rata Escrow Portion). Each holder of a Terminated Option who exercises or is deemed to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS exercise such holder’s Terminated Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant manner described above shall be entitled at the Effective Time to which they are issuable, receive the same amount of Merger Consideration that would otherwise be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character payable to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result holder of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the full number of shares of NPS Company Common Stock subject to each which such NPS holder would have been entitled had such holder delivered a check for the full exercise price of such Terminated Option; (iv) . Any amount still owed by any such holder for the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than option after such generally applicable vesting schedule offset (including a description such holder’s Pro Rata Escrow Portion) must be paid to the Company prior to the Effective Time. The distributions of each such different vesting schedule)cash to be distributed to Company Optionholders who become Company Stockholders pursuant to this Section 5.18(a)(i) or Section 5.18(b)(ii) shall be reduced pursuant to Article VII.

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine Effective as of the Effective Time, the Company shall take all necessary action, to (3,091,369A) shares of NPS Common terminate the Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, (B) provide that each outstanding option to purchase shares of Company Common Stock granted under the Stock Option Plans (a “Stock Option”) that is outstanding and unexercised as of immediately prior to the Effective Time, whether or not vested or exercisable, shall become fully vested and exercisable as of the Effective Time and (iiiC) thirty eight thousand seven hundred twenty five (38,725) shares cancel, in accordance with the terms of NPS the Plans, as of the Effective Time, each Stock Option that is outstanding and unexercised at the Effective Time. Each holder of a Stock Option that is outstanding and unexercised at the Effective Time and that has an exercise price per share of Common Stock are reserved that is less than the Per Share Consideration shall be entitled (subject to the provisions of this Section 1.7(b)) to be paid by the Surviving Corporation at the Effective Time or as soon thereafter as the Company’s payroll service provider can arrange the payment, in exchange for future issuance under the NPS ESPP. All shares delivery of NPS an agreement in substantially the form attached hereto as Exhibit E-3 (and “Option Letter”) and cancellation of such Stock Option, an amount in cash (subject to any applicable withholding taxes) with respect to each share of Common Stock subject to issuance the Stock Option as aforesaid, upon issuance set forth on the terms and conditions specified in Payment Spreadsheet (which shall be equal to the instruments pursuant to which they are issuableexcess, would be duly authorizedif any, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon Per Share Consideration over the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the applicable per share exercise price of each such NPS Option; Stock Option (vthe “Option Payment”)). Any such payment shall be subject to all applicable federal, state and local tax withholding requirements. The Surviving Corporation shall pay or cause to be paid the aggregate amount set forth in the Payment Spreadsheet (less applicable withholding taxes and amounts which will be held in escrow in accordance with Section 1.8(b)) to the date on which each such NPS holders of Stock Options with funds provided by Parent at the Effective Time. At the Effective Time, any unvested shares of Common Stock awarded to employees, directors or consultants pursuant to any of the Stock Option was granted; (vi) Plans or other arrangements that are outstanding immediately prior to the extent to which each such NPS Option is Effective Time shall become fully vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires Effective Time and (viii) whether converted into the exercisability of each such NPS Option will be accelerated amounts described in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule1.7(b).

Stock Options. As of At the close of business on February 13Closing, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common each Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13immediately prior to the Closing will, 2003: (i) the name by virtue of the optionee Closing and without further action on the part of the holder thereof, be cancelled and each such outstanding Stock Option will be converted into the right to receive, subject to the conditions set forth herein, a portion of the Final Merger Cash Consideration (the “Optionholder Cash Consideration”), Share Consideration (the “Optionholder Share Consideration”) and Earnout Consideration, if any (the “Optionholder Earnout Consideration”, and together with the Optionholder Cash Consideration, and Optionholder Share Consideration, the “Optionholder Consideration”), in each case as calculated and as set forth on the Distribution Waterfall. The Optionholder Cash Consideration shall be promptly paid to each Company Optionholder by the Company in accordance with and subject to the provisions of Section 2.7 or 2.10, as applicable, promptly following the Closing for amounts payable under Section 2.7 and promptly following the date any such amounts become payable under Section 2.10, (and in any case by the next normal payroll date of the Company following the date such portion of the Optionholder Cash Consideration becomes payable pursuant to this Section 2.6(d)) through the Company’s payroll systems (other than with respect to the Optionholder Consideration in respect of each non-employee service providers). The Optionholder Consideration shall be paid to such NPS Option; (ii) Company Optionholder following receipt by the particular plan Company of a duly executed Option Cancellation Agreement, in substantially the form attached hereto as Exhibit E, and the Company shall be entitled to deduct and withhold from the consideration otherwise payable or deliverable to any Company Optionholder pursuant to this Section 2.6(d) such amounts as it is required to deduct and withhold with respect to the making of such payment under any provision of federal, state, local or foreign tax law. Any amounts required to be withheld with respect to the Optionholder Share Consideration shall reduce the amount of Optionholder Cash Consideration that would otherwise be payable to the Optionholder. If the Company so withholds such amounts, such amounts shall be treated for all purposes of this Agreement as having been paid to the Company Optionholders in respect of which each the Company made such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested deduction and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)withholding.

Stock Options. As of (a) At the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to each outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants option to purchase NPS Common Stock Shares (each "COMPANY STOCK OPTION" and, collectively, "COMPANY STOCK OPTIONS") issued other than pursuant to the NPS Company's 1995 Stock Plan, 2001 Incentive Stock Plan, 2001 Employee Stock Purchase Plan, 2002 Nonstatutory Stock Option PlansPlan, and (iii) thirty eight thousand seven hundred twenty five (38,725) Altius 1999 Plan or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options to purchase shares of NPS Parent Common Stock are reserved for future issuance under the NPS ESPPin accordance with this Section 1.11. All shares of NPS Common plans or agreements described above pursuant to which any Company Stock subject Option has been issued or may be issued are referred to issuance collectively as aforesaidthe "COMPANY PLANS." At the Effective Time, upon issuance each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions specified in the instruments pursuant (including but not limited to which they are issuablevesting schedule) as were applicable to such Company Stock Option, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements a number of any character shares of Parent Common Stock equal to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Parent Common Stock subject that the holder of such Company Stock Option would have been entitled to each receive pursuant to the Merger had such NPS Option; holder exercised such option in full immediately prior to the Effective Time at a price per share equal to (ivx) the aggregate exercise price of each for the Shares otherwise purchasable pursuant to such NPS Option; Company Stock Option divided by (vy) the date on which each such NPS Option was granted; product of (vii) the extent number of Shares otherwise purchasable pursuant to such Company Stock Option multiplied by (ii) the Exchange Ratio, rounded down to the nearest cent; provided, however, that in the case of any option to which each such NPS Option is vested and unvested as Section 421 of a recent practicable date; the Code applies by reason of its qualification under Section 422 of the Code (vii"INCENTIVE STOCK OPTIONS" or "ISOS") the date on which each option price, the number of shares purchasable pursuant to such NPS Option expires option and (viii) whether the exercisability terms and conditions of each exercise of such NPS Option will option shall be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. determined so as to comply with Section 3.2(b424(a) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Code.

Stock Options. As Prior to the Effective Time, the Board of Directors of the close of business on February 13Company (the "Company Board") (or, 2003: (iif appropriate, any committee thereof) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS shall take all actions necessary and appropriate to provide that, at the Effective Time, each unexpired and unexercised option or similar rights to purchase Company Common Stock are (the "Company Options"), under any stock option plan of the Company, including the 1999 Stock Option and Grant Plan, the 1996 Stock Option and Incentive Plan, and the 1996 Equity Acquisition Plan (the "Company Stock Option Plans"), whether or not then exercisable or vested, shall be cancelled and, in exchange therefor, each former holder of any such cancelled Company Option shall receive, in consideration of the cancellation of such Company Option and in full settlement therefor, a payment in cash (subject to issuance pursuant any applicable withholding or other taxes required by applicable Law to outstanding NPS Options, (iibe withheld) no shares of NPS an amount for each share of Company Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant with respect to which they are issuablethe Company Option would have been exercisable at the Effective Time (including, would be duly authorizedwithout limitation, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of any acceleration of vesting under the Mergers Company Stock Option Plans and any agreements issued thereunder due to the transactions contemplated hereby) (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation"Vested Option Share") equal to the excess, phantom stockif any, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) Merger Consideration over the exercise price of each the Company Option to acquire the respective Vested Option Share (such NPS Option; (v) amounts payable hereunder being referred to as the date on which each "Option Payment"). From and after the Effective Time, any such NPS cancelled Company Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will shall no longer be accelerated in any way exercisable by the transactions contemplated by this Agreementformer holder thereof, but shall only entitle such holder to receive the Option Payment, and indicates the extent Company will use its reasonable best efforts to obtain all necessary consents to ensure that former holders of any such accelerationCompany Options will have no rights other than the right to receive the Option Payment. Section 3.2(b) of After the NPS Disclosure Letter also contains a complete Effective Time, all Company Stock Option Plans shall be terminated and accurate description of the vesting schedule generally applicable to NPS Options, and no further Company Options shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)be granted thereunder.

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS The Company has reserved 2,578,420 Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved Shares for future issuance under the NPS ESPP. All shares of NPS Common Company’s Stock subject to issuance Plan, as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they Options to purchase an aggregate of 1,330,352 Common Shares are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option outstanding as a result of the Mergers (whether alone or upon date of this Agreement and Options to purchase an aggregate of 1,248,068 Common Shares remain available for future grants as of the occurrence of any additional or subsequent events)date hereof. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section Part 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information Schedule accurately sets forth, with respect to each NPS Option that is outstanding as of February 13, 2003the date of this Agreement: (i) the name of the optionee in respect holder of each such NPS Option; (ii) the particular plan pursuant to which each country of residence of the holder of such NPS Option was grantedOption; (iii) the total number of shares of NPS Common Stock Shares that are subject to each such NPS OptionOption and the number of Common Shares with respect to which such Option outstanding; (iv) the exercise price date on which such Option was granted and the term of each such NPS Option; (v) the date on vesting schedule for such Option and the status of such Option as fully vested, partially vested or unvested; (vi) the exercise price per Common Share purchasable under such Option; (vii) the Stock Plan under which each such NPS Option was granted; (viviii) the extent to which each whether such NPS Option is vested intended to qualify as an “incentive stock option” as defined in Section 422 of the Code; and unvested as (ix) whether such Option is subject to Section 409A of a recent practicable date; (vii) the Code. Each grant of an Option was duly authorized no later than the date on which each the grant of such NPS Option expires and was by its terms to be effective (viii) whether the exercisability “Grant Date”). The per share exercise price of each such NPS Option will be accelerated was equal to or greater than the fair market value of a Common Share on the applicable Grant Date, as determined in any way accordance with Section 409A of the Code. Each grant of an Option has been authorized by all necessary corporate action, including, as applicable, approval by the transactions contemplated by this Agreement, and indicates the extent board of any such acceleration. Section 3.2(b) directors of the NPS Disclosure Letter also contains Company (or a complete duly constituted and accurate description authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents. Each award agreement governing the grant of an Option was duly executed and delivered by each party thereto and is in full force and effect. Each grant of an Option was made under a Stock Plan and otherwise in accordance with the terms of the vesting schedule generally Stock Plan pursuant to which such Option was granted and all applicable Legal Requirements. The Company has Made Available to Purchaser accurate and complete copies of each Stock Plan, each form of agreement used thereunder and each Contract pursuant to which any Option is outstanding. The treatment of Options in accordance with Section 1.2 is permitted under each Stock Plan, all Contracts applicable to NPS Options, such Options and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)all Legal Requirements.

Stock Options. As of the close time the Purchaser initially accepts for ------------- payment and pays for the Shares pursuant to Section 1.1 (the AInitial Payment Time@), each outstanding stock option (an "Option" and, collectively, the "Options") granted under the Command Systems, Inc. 1997 Employee, Director and Consultant Stock Plan, as amended and restated, and those certain options set forth on Schedule 2.1(d) hereto (collectively, the "Option Plans"), whether or not then vested or exercisable, shall be cancelled and converted into the right to receive from the Company an amount of business on February 13, 2003: cash equal to the product of (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Company Common Stock subject to each such NPS Option; Option and (ivii) the excess, if any, of the Merger Consideration over the exercise price per share of Company Common Stock of each Option (the aggregate amount being referred to herein as the "Option Consideration"). Prior to the Initial Payment Time, the Company shall take all steps necessary to give written notice to each holder of an Option that all Options shall be canceled effective as of the Initial Payment Time and the Company shall pay such NPS Option; (vholder, promptly following the Initial Payment Time, the Option Consideration for all Options held by such holder. The Company's Board of Directors or any committee thereof responsible for the administration of the Option Plans shall take any and all action necessary to effectuate the matters described in this Section 2.1(d) on or before the date on which 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 NPS Option was granted; (viOption. Any amounts payable pursuant to this Section 2.1(d) the extent shall be subject to which each such NPS Option is vested and unvested as any required withholding of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, taxes and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)be paid without interest.

Stock Options. As Fraser shall be granted stock in the amount of 250,000 shares of restricted Company Common Stock in the first calendar year. If, at any time prior to the issuance of said shares there shall be any alteration in the capital stock of the close Company, other than an increase in the authorized or issued capital, the said issuance shall attach to an appropriate number of business on February 13the shares or securities of the Company, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares which shall have, been created by anysuch alteration. In addition, Fraser and Cathy Masamitsu, Fraser's assxxxxxx, xxxxx xe xxxxxxx a stock option of NPS restricted Company Common Stock in an amount to be determined by the Board of Directors of ValCom at the end of each calendar year. Fraser warrants and represents that the shares are subject to issuance pursuant to outstanding NPS Optionsbeing acquired solely for its own account and not with a view to, (ii) no or for resale in connection with, any distribution of common shares within the meaning of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) Securities Act. Fraser agrees that the shares may not be sold in absence of NPS Common Stock are reserved for future issuance registration unless such sale is exempt from registration under the NPS ESPPAct and any applicable state securities laws. All The certificate for the shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of shall bear the following information with respect to each NPS Option outstanding as of February 13restrictive legend: "THE SHARES REPRESENTED BY THE CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 ("THE ACT") AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this AgreementSOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY."

Stock Options. As of At the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information Company's obligations with respect to each NPS Option outstanding as Option, whether vested or unvested, shall, by virtue of February 13this Agreement and without any further action of the Company, 2003: Parent or the 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 corporation "assuming a stock option in a transaction to which Section 424(a) applies" within the name meaning of Section 424 of the optionee in respect of each such NPS Option; Code or (ii) to the particular plan pursuant extent that Section 424 of the Code does not apply to such Option, would be such a corporation were Section 424 of the Code applicable to such Option; and, if not so otherwise elected, 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 each 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 NPS Option was granted; (iii) will be exercisable for that number of shares of Parent Common Stock equal to the product of the number of shares of NPS Company Common Stock that were purchasable under such Option immediately prior to the Effective Time multiplied by 1.0, subject to each adjustment in the manner provided for in Section 2.06(e), rounded up to the nearest whole number of shares of Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such NPS Option; (iv) assumed Option will be equal to the quotient determined by dividing the exercise price per share of each Company Common Stock at which such NPS Option; (v) the date on which each such NPS Option was granted; (vi) exercisable immediately prior to the extent Effective Time by 1.0, subject to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) adjustment in the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated manner provided for in any way by the transactions contemplated by this AgreementSection 2.06(e), and indicates rounding the extent of any such accelerationresulting exercise price up to the nearest whole cent. Parent shall use its best efforts to ensure, that Options intended to qualify as incentive stock options under Section 3.2(b) 422 of the NPS Disclosure Letter also contains a complete and accurate description of Code prior to the vesting schedule generally applicable Effective Time continue to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)so qualify after the Effective Time.

Stock Options. As All options to purchase stock in the Company that ------------- are held by Consultant as of the close date of business this Agreement and that are not vested shall vest on February 13the date of this Agreement. All unexercised options held by Consultant shall expire in accordance with the applicable plan or agreement governing such options. Consultant shall be entitled to receive additional options to acquire stock of the Company during the Consulting Period in an amount to be determined by the Board of Directors on the recommendation of the Chairman, 2003: but shall receive at least options to purchase a number of shares of the Company equal to 90 per cent of the average number of shares provided in options granted to the Chairman, Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Executive Vice President. The calculation of such shares shall be equitably adjusted for unusual circumstances including, without limitation, (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares any initial extraordinary grant to a newly hired officer to fill a vacancy in any of NPS Common Stock are subject those positions shall be excluded from the calculation, but subsequent grants in the ordinary course to issuance pursuant to outstanding NPS Optionssuch new officer shall be included, and (ii) no shares of NPS Common Stock if any such office is not filled and option grants are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights not made with respect to NPS. Section 3.2(b) such position, appropriate adjustments shall be made to reflect that circumstance in determining the average number of options granted, the NPS Disclosure Letter contains intent being that, over the term of this Agreement, Consultant shall receive options to purchase a complete and accurate list number of the following information with respect to each NPS Option outstanding as shares not less than 90 percent of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares in options granted to the top five officers of NPS Common Stock subject the Company. Any such options granted during the Consulting Period shall be at prices (including any favorable repricing), and with vesting provisions and other terms (to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent permitted under applicable law) substantially equivalent (but no less favorable) to which each such NPS Option is vested and unvested as those granted to the other executive officers of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates Company. To the extent that other compensation programs for the executives listed above are instituted in lieu of any stock options, Consultant shall participate in those programs such acceleration. Section 3.2(b) that the change in the form of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable compensation to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that such executives is different than such generally applicable vesting schedule (including a description of each such different vesting schedulenot detrimental to his rights under this Paragraph 3(c).

Stock Options. (a) As soon as practicable following the date of this Agreement, Parent and Company (or, if appropriate, any committee of the close Board of business on February 13Directors of Company administering Company's Amended and Restated Stock Option Plan and 1996 Stock Option Plan (collectively, 2003: (ithe "COMPANY OPTION PLANS") three million ninety one thousand three hundred sixty nine (3,091,369) 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 NPS Company Common Stock are subject under the Company Option Plans (a "COMPANY STOCK OPTION"), whether vested or unvested, shall be adjusted as necessary to issuance pursuant provide that at the Effective Time, each Company Stock Option outstanding immediately prior to outstanding NPS Optionsthe Effective Time shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option (ii) no 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), the same number of shares of NPS Parent Common Stock are subject as the holder of such Company Stock Option would have been entitled to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than receive pursuant to the NPS Merger had such holder exercised such Company Stock Option Plansin full immediately prior to the Effective Time (assuming for this purpose that such option were then exercisable), and at a price per share of Parent Common Stock equal to (iiiA) thirty eight thousand seven hundred twenty five (38,725) the aggregate exercise price for the shares of NPS Company Common Stock are reserved for future issuance under otherwise purchasable pursuant to such Company Stock option divided by (B) the NPS ESPP. All aggregate number of shares of NPS 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 issuance as aforesaidCompany 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, upon issuance on 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 specified 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 instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessablepreceding sentence. There are no commitments or agreements For purposes of any character to which NPS is bound obligating NPS to accelerate determining the vesting amount of any NPS Option as a result such payment the price of the Mergers (whether alone or upon Parent Common Stock shall be the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) average closing price per share of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Parent Common Stock subject on the NYSE for the five trading days immediately prior to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)exercise.

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine On the Effective Date, each option to acquire Peoples Common Stock which is then outstanding (3,091,369) "Peoples Option"), whether or not exercisable, shall cease to represent a right to acquire shares of NPS Peoples Common Stock are subject and shall be converted automatically into an option to issuance pursuant to outstanding NPS Optionspurchase shares of Sovereign Common Stock and the corresponding number of Sovereign Stock Purchase Rights, and Sovereign shall assume each Peoples Option, in accordance with the terms of the applicable Peoples Stock Option Plan and stock option agreement by which it is evidenced, except that from and after the Effective Date, (i) Sovereign and its Board of Directors or a duly authorized committee thereof shall be substituted for Peoples and Peoples' Board of Directors or duly authorized committee thereof administering such Peoples Stock Option Plan, (ii) no each Peoples Option assumed by Sovereign may be exercised solely for shares of NPS Sovereign Common Stock are subject to issuance pursuant to outstanding optionsand Sovereign Stock Purchase Rights, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Sovereign Common Stock subject to each such NPS Option; Peoples Option shall be equal to the number of shares of Peoples Common Stock subject to such Peoples Option immediately prior to the Effective Date multiplied by the Applicable Exchange Ratio, provided that any fractional shares of Sovereign Common Stock resulting from such multiplication shall be rounded down to the nearest share, and (iv) the per share exercise price of under each such NPS Option; (v) Peoples Option shall be adjusted by dividing the date on which per share exercise price under each such NPS Peoples Option was granted; by the Applicable Exchange Ratio, provided that such exercise price shall be rounded down to the nearest cent. Notwithstanding clauses (viiii) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(biv) of the NPS Disclosure Letter also contains a complete and accurate description preceding sentence, each Peoples Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the vesting schedule generally applicable to NPS OptionsIRC, and shall specifically identify each NPS Option with the regulations promulgated thereunder, so as not to constitute a vesting schedule that is different than such generally applicable vesting schedule (including a description modification, extension or renewal of each such different vesting schedulethe option within the meaning of Section 424(h) of the IRC. Sovereign and Peoples agree to take all necessary steps to effect the foregoing provisions of this Section 1.02(f).

Stock Options. As All options (the "Stock Options") to acquire Common Shares outstanding immediately prior to the Effective Time under any stock option or similar plan or agreement of the close Company (such stock option or similar plans or agreements being collectively referred to herein as the "Stock Plans"), whether or not then exercisable, shall (by all necessary and appropriate action which shall be taken by the Board of business on February 13, 2003: Directors of the Company or such appropriate committee or committees thereof) be canceled at the Effective Time and (i) three million ninety one thousand three hundred sixty nine Purchaser shall use commercially reasonable efforts so that each holder of a Stock Option shall at the Effective Time, but in any event not more than two business days after the Effective Time, receive from the Surviving Corporation (3,091,369) shares of NPS and if necessary Purchaser will provide funds to the Surviving Corporation so that it is able to make such payment), for each Common Stock are Share subject to issuance pursuant a Stock Option, an amount in cash equal to outstanding NPS Optionsthe excess, if any, of the Merger Consideration over the per share exercise price of such Stock Option, without interest, in full settlement of the Company's (and the Surviving Corporation's) obligations under each such Stock Option, or (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under extent that the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements per share exercise price of any character Stock Option equals or exceeds the Merger Consideration, at the Effective Time such Stock Option shall be canceled and the holder of such Stock Option shall not receive or be entitled to which NPS is bound obligating NPS receive any consideration from Purchaser, Merger Sub or the Surviving Corporation in respect of such Stock Option. The Company shall deliver to accelerate the vesting of any NPS Option as Purchaser a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as holders of February 13Stock Options, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) indicating the number of shares Stock Options held by each holder of NPS Common Stock Options and the exercise price, expiration date and exerciseability of such Stock Options, at least ten days prior to the Closing Date. Notwithstanding the foregoing, the amounts payable pursuant to this Section 1.4 shall be subject to each such NPS Option; (iv) all applicable withholding taxes. The Company shall use commercially reasonable efforts to approve the exercise price disposition of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) Stock Options in accordance with the foregoing to the extent necessary to which each exempt such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) dispositions under Rule 16b-3 of the NPS Disclosure Letter also contains a complete and accurate description Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"). The term Stock Options shall not include the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)LFSRI Warrant.

Stock Options. (a) As of the close of business on February 13Effective Time, 2003: each option to purchase Company Shares (ian "Option") three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance issued pursuant to outstanding NPS Optionsgrants under the Employee Incentive Stock Option Plan, the Amended and Restated Employee Incentive Stock Option Plan, and the 1992 Stock Option Plan (iitogether, the "Stock Option Plans"), and each warrant issued to purchase Company Shares issued in November, 1994 and January, 1995 in connection with debt financings of the Company (the "Warrants") no shares (whether vested or unvested prior to the Merger) shall become immediately vested and exercisable in full. The transmittal materials described in Section 1.04(a) above shall include a means for allowing the holders of NPS Common Stock are subject the Options and Warrants to issuance exercise such Option and Warrants in accordance with their original terms (including, to the extent applicable, payment of the exercise price either in cash or through the surrender (or deemed surrender, as applicable) of Company Shares already owned by the holder of the Options or Warrants, or any combination of the foregoing). To the extent that holders of the Options or Warrants elect to exercise such Options or Warrants pursuant to the mechanism provided in the letter of transmittal, they thereby shall become entitled to receive the Merger Consideration in lieu of Company Shares which would have been issuable upon exercise of the Options and Warrants prior to the Merger, with the same effect as if such Options or Warrants had been exercised immediately prior to the Effective Time and such Public Shares tendered in accordance with Section 1.04(a) hereof. Any Options or Warrants not exercised in accordance with this Section 1.05 within six (6) months of the Effective Time, as well as any outstanding options, rights options or warrants to purchase NPS Common Stock issued acquire Company Shares other than pursuant to the NPS Option PlansOptions or Warrants, shall be deemed null and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved void and shall not be exercisable or exchangeable in any manner for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance Merger Consideration and, except as aforesaidotherwise expressly provided in this Section 1.05, upon issuance on from and after the terms and conditions specified in Effective Time, neither the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments Buyer nor the Surviving Corporation shall have any obligation or agreements liability of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights kind with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)securities.

Stock Options. As Prior to the Effective Time, Xxxxx shall use its commercially reasonable efforts to provide that each option to purchase Xxxxx Shares granted under Xxxxx’x 1997 Employee, Director and Consultant Stock Option Plan and its 2005 Stock Plan (in each case, a “Xxxxx Option”) outstanding at the Effective Time which is vested (in each case, a “Vested Xxxxx Option”) shall entitle each holder thereof to receive a payment in cash from the Surviving Corporation, upon the Effective Time, equal to the product of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares the number of NPS Common Stock are Xxxxx Shares previously subject to issuance pursuant to outstanding NPS Options, such Vested Xxxxx Option and (ii) no shares the excess, if any, of NPS Common Stock are the Merger Consideration over the exercise price per Xxxxx Share previously subject to issuance pursuant such Vested Xxxxx Option. All applicable withholding taxes attributable to outstanding optionsthe payments made hereunder shall be deducted from the amounts payable hereunder; provided, rights or warrants however, that with respect to any person subject to Section 16 of the Exchange Act, any such amount shall be paid as soon as practicable after the first date payment can be made without liability to such person under Section 16(b) of the Exchange Act. Xxxxx shall, upon the request of any holder of Vested Xxxxx Options, permit such holder to execute and deliver to Xxxxx, prior to the expiration of the Offer, an agreement substantially in the form of Annex B (an “Option Election”) under which such holder would agree, contingent upon the purchase NPS Common Stock issued other than of Xxxxx Shares by Acquisition Subsidiary pursuant to the NPS Option PlansOffer, to cause, immediately prior to the expiration of the Offer, such Vested Xxxxx Options to be exercised and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option Xxxxx Shares issued as a result of that exercise to be tendered in the Mergers Offer. Xxxxx and Acquisition Subsidiary shall reflect on their books and records the transactions effected pursuant to the Option Elections. At the Effective Time, (A) each Xxxxx Option (whether alone vested or upon not) outstanding immediately prior to the occurrence Effective Time with an exercise price per share that is less than the applicable Merger Consideration for the class of any additional or subsequent events). There are no outstanding or authorized stock appreciationXxxxx Shares into which such Xxxxx Option is exercisable shall be cancelled by Xxxxx in exchange for the right to receive, phantom stockwithout interest, profit participation or other similar rights with respect a cash amount equal to NPS. Section 3.2(b) the product of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i1) the name excess, if any, of the optionee in respect of each (x) such NPS Option; Merger Consideration, over (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (ivy) the exercise price per share of each such NPS OptionXxxxx Option multiplied by (2) the total number of Xxxxx Shares subject to such Xxxxx Option (such product, as applied to Xxxxx Options referred to as “Option Consideration”); (vB) each Xxxxx Option (whether vested or not) outstanding as of the Effective Time with an exercise price per share that is equal to or greater than the applicable Merger Consideration for the class of Xxxxx Shares into which such Xxxxx Option is exercisable shall be terminated, without any consideration therefor; and (C) the Board of Directors of Xxxxx shall take any actions necessary to effect the transactions anticipated by this Section 2.5(e) under its 1997 Employee, Director and Consultant Stock Option Plan and its 2005 Stock Plan and all Xxxxx Option agreements and any other plan or arrangement of Xxxxx (whether written or oral, formal or informal). As soon as practicable following the date on which hereof, Xxxxx shall deliver or cause to be delivered to each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as holder of a recent practicable date; (vii) the date on which each such NPS Xxxxx Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way certifications, notices or other communications required by the terms of such Xxxxx Option or any agreement entered into with respect thereto to be delivered to such holder prior to the Effective Time and the other transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule).

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as The Company shall adopt a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized new stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular option ------------- plan pursuant to which each 5 million shares of Common Stock, or such NPS Option was granted; (iii) the greater number of shares of NPS Common Stock subject as shall be determined by the board of directors of the Company, shall be reserved for issuance pursuant to each options or other awards granted pursuant to such NPS Option; (iv) plan. Of the total number of shares of Common Stock reserved for issuance pursuant to such plan, the board of directors of the Company shall grant to Persons who are members of the management of the Company as of the date of this Agreement options relating to 1.5 million shares of Common Stock, having an exercise price equal to the Conversion Price of each Common Stock set forth in the Convertible Subordinated Debt and having such NPS Option; vesting schedule and term to expiration (vwhich shall not exceed 10 years) as shall be determined by the Compensation Committee of the board of directors of the Company as constituted as of the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, which Committee shall also determine the allocation of such options among such Persons. The foregoing determinations by such Committee so constituted shall be binding upon the Company and indicates the extent its Board of any such acceleration. Section 3.2(b) Directors notwithstanding that adoption and implementation of the NPS Disclosure Letter also contains new stock option plan referred to in this Section 5.9 may occur at a complete and accurate description later date as of which the composition of the vesting schedule generally applicable Compensation Committee of the board of directors of the Company has changed. In the event the Company is unable for any reason to NPS Optionsadopt or implement a new stock option plan as contemplated in this Section 5.9, the Company shall promptly make such alternative arrangements, including, without limitation, adoption and implementation of one or more phantom stock or other compensation plans, as it shall specifically identify reasonably determine to be appropriate to provide comparable incentive compensation opportunities to the Persons referred to in this Section 5.9. The provisions of this Section 5.9 are intended to confer upon the Persons designated by the existing Compensation Committee of the Company's Board of Directors the right to receive the compensation opportunities hereinabove described and to be enforceable by each NPS Option with a vesting schedule that is different than of such generally applicable vesting schedule (including a description of each such different vesting schedule)Persons.

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS OptionsAt the Effective Time, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding optionsexcept as set forth in ‎Section 1.08(c)(ii), rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized each stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee option in respect of shares of HTLF Common Stock granted under the HTLF Stock Plan (each such NPS stock option, a “HTLF Option; ” and, collectively with the HTLF RSU Awards and the HTLF PSU Awards, the “HTLF Equity Awards”) that is outstanding immediately prior to the Effective Time, by virtue of the Merger and without any required action on the part of HTLF or any holder of such HTLF Option, shall be assumed by UMB and shall be converted into a stock option (iieach, an “Assumed Option” and, together with the Assumed RSU Awards and the Assumed PSU Awards, “Assumed Equity Awards”) that (x) is exercisable for (subject to achievement of the particular plan pursuant applicable time-based vesting conditions) a number of shares of UMB Common Stock equal to which each such NPS Option was granted; (iii) the number of shares of NPS HTLF Common Stock subject underlying the HTLF Option immediately prior to each such NPS Option; the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole share and (ivy) has an exercise price per share of UMB Common Stock equal to the exercise price of each such NPS Option; (v) applicable to the date on which each such NPS underlying HTLF Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way divided by the transactions contemplated by this AgreementExchange Ratio, and indicates rounded up to the extent of any such accelerationnearest cent. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable Each Assumed Option shall continue to NPS Optionshave, and shall specifically identify each NPS be subject to, the same terms and conditions as applied to the corresponding HTLF Option with a vesting schedule that is different than such generally applicable vesting schedule immediately prior to the Effective Time (including the requirement to perform continued services to satisfy applicable time-based vesting conditions, subject to any accelerated vesting on a description Qualified Termination of each such different vesting schedulethe holder’s employment following the Mergers). The assumption of HTLF Options pursuant to this Section 1.08(c) shall be effected in a manner that satisfies the requirements of Section 409A of the Code and this Section 1.08(c) will be construed with this intent.

Stock Options. As (a) Employee shall be granted an option to purchase 50,000 shares of common stock of Holdings (the "Option") in accordance with the Stock Option Agreement attached hereto as Exhibit A. The Option shall have an exercise price equal to $5.75 which is equal to the fair market value of the close common stock of business Holdings on February 13the date hereof. The Option shall be subject to and conditional upon the Option receiving (i) the approval of the Compensation Committee of the Board of Directors of Holdings and (ii)the affirmative vote of a majority of all outstanding shares of Holdings at the next annual meeting of the stockholders of Holdings of the Long Term Incentive Plan ("Stockholder Approval") and the Option shall be null and void if such approval or Stockholder Approval is not obtained. The Option shall be exercisable (A) in installments, 2003as follows: (i) three million ninety one thousand three hundred sixty nine (3,091,369) 25,000 shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Optionscommon stock may be purchased on the first anniversary hereof and, (ii) no 25,000 shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to common stock may be purchased on the NPS Option Plans, second anniversary hereof; and (iiiB) thirty eight thousand seven hundred twenty five (38,725) shares in full upon a "Change of NPS Common Stock are reserved for future issuance under the NPS ESPPControl", as defined below. All shares of NPS Common Stock subject A "Change in Control" shall be deemed to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003have occurred if: (i) any person (as defined in Section 3(a)(9) under the name Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than the Company or Holdings, becomes the Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act; provided, that a Person shall be deemed to be the Beneficial Owner of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, options or otherwise, without regard to the 60 day period referred to in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Holdings, the Company or any Significant Subsidiary (as defined below) representing 50% or more of the optionee in respect combined voting power of each Holdings', the Company's or such NPS Optionsubsidiary's then outstanding securities; (ii) during any period of two years, individuals who at the particular plan pursuant beginning of such period constitute the Board of Holdings cease for any reason to which each such NPS Option was grantedconstitute at least a majority of the Board of either Holdings; (iii) the number consummation of shares a merger or consolidation of NPS Common Stock subject Holdings, the Company or any subsidiary owning directly or indirectly all or substantially all of the consolidated assets of the Company ( a "Significant Subsidiary") with any other entity, other than a merger or consolidation which would result in the voting securities of the Holdings, the Company or a Significant Subsidiary outstanding immediately prior thereto continuing to each represent more than 50% of the combined voting power of the surviving or resulting entity outstanding immediately after such NPS Optionmerger or consolidation; (iv) the exercise price shareholders of each such NPS Optionthe Company approve a plan or agreement for the sale or disposition of all or substantially all of the consolidated assets of the Company in which case the Board shall determine the effective date of the Change of Control resulting therefrom; (v) any other event occurs which the date on which each such NPS Option was granted; Board determines, in its discretion, would materially alter, the structure of the Company or its ownership and (vi) Xxxxxx Xxxxxxxx ceases to be the extent to which each such NPS Option is vested and unvested as Chief Executive Officer of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Holdings and/or TSI.

Stock Options. As of (a) At the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common each In the Money Vested Stock are subject to issuance pursuant to Option outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant immediately prior to the NPS Effective Time, including Vested Stock Options outstanding and issued under the Stock Option PlansPlan (the “Employee Options”), and not exercised, shall be cancelled, extinguished and terminated and converted into and become a right following the Closing Date to receive an amount of cash, without interest thereon and less any required withholding taxes, equal to (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (ix) the name Per Share Consideration minus (y) the exercise or conversion or exchange price per share of the optionee such Vested Stock Option (such amount payable in respect of each such NPS Option; (ii) any share of Company Common Stock into which a Vested Stock Option is convertible or exercisable, the particular plan pursuant to which each such NPS “Option was granted; (iii) Consideration”), multiplied by the number of shares of NPS Company Common Stock into which such Vested Stock Option is convertible or exercisable or exchangeable immediately prior to the Effective Time. Notwithstanding the foregoing, as soon as practicable after the Effective Time, and subject to and in accordance with the provisions of Article IX, Parent or the Company (as applicable) shall pay to the Escrow Agent, for deposit into the Escrow Fund (in respect of the aggregate Escrow Amount) and the Equityholders’ Representative Expense Fund, as applicable, on behalf of each holder of In the Money Vested Stock Options in respect of each share of Company Common Stock underlying such Vested Stock Options as of immediately prior to the Effective Time, (i) a portion of the Per Share Consideration otherwise payable in respect of such Company Common Stock underlying such Vested Stock Options to such Optionholder by virtue of the Merger equal to the Escrow Per Share Amount for each such NPS Option; share and (ivii) the Equityholders’ Representative Per Share Expense Amount, which in each case shall be held by the Escrow Agent as nominee for the holders of In the Money Vested Stock Options converted pursuant to this Section 3.3(a). In the event that, at the Effective Time, the exercise price of each any Stock Option (whether vested or unvested) is equal to or greater than the Per Share Consideration reduced by both the Escrow Per Share Amount and the Equityholders’ Representative Per Share Expense Amount, such NPS Option; (v) Stock Option shall be cancelled and terminated without payment therefor and have no further force or effect. Immediately prior to the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested Effective Time, all Unvested Stock Options shall be cancelled and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires terminated without payment therefor and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)have no further force or effect.

Stock Options. As Immediately prior to the Effective Time, each outstanding option to purchase Common Stock (a "Stock Option") granted under the Company's 1997 Equity Incentive Plan or the Stock Option Plan for Non- Employee Directors or pursuant to any other employee stock option plan or agreement entered into by the Company with any employee of the close Company or any subsidiary thereof and listed on Section 2.11(c) of business on February 13the Company Disclosure Schedule (the "Company Stock Option Plans"), 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are whether or not then exercisable, shall become exercisable, subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in of the instruments Company Stock Option Plan pursuant to which they are issuablesuch Stock Option was issued. If and to the extent that a Stock Option shall not have been exercised at the Effective Time, would such Stock Option shall be duly authorized, validly issued, fully paid and nonassessableautomatically canceled. There are no commitments or agreements Each holder of any character a canceled Stock Option shall be entitled to which NPS is bound obligating NPS receive as soon as practicable after the first date payment can be made without liability to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. such person under Section 3.2(b16(b) of the NPS Disclosure Letter contains a complete Securities Exchange Act of 1934, as amended, and accurate list the rules and regulations promulgated thereunder (the "Exchange Act") from the Company in consideration for such cancellation an amount in cash (less applicable withholding taxes) equal to the product of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock previously subject to each such NPS Option; Stock Option multiplied by (ivii) the excess, if any, of the equivalent cash value of the Merger Consideration at the Effective Time ($1.50 plus 0.5 multiplied by the Average Trading Price for the 10-Day Period) over the exercise price per share of each Common Stock previously subject to such NPS Option; Stock Option (vthe "Option Consideration ") upon surrender of such Stock Option to the date on which each Company or an affidavit of loss in the form requested by Parent, together with such NPS Option was granted; (vi) additional documentation as may be reasonably required by Parent or the extent to which each such NPS Option is vested and unvested as Company. The surrender of a recent practicable date; (viiStock Option in exchange for the Option Consideration in accordance with the terms of this Section 1.6(c) shall be deemed a release of any and all rights the date on which each holder had or may have had in respect of such NPS Stock Option. Prior to the Effective Time, the Company shall use its reasonable best efforts to obtain all necessary consents or releases from holders of Stock Options under the Company Stock Option expires Plans and (viii) whether the exercisability of each take all such NPS Option will other lawful action as may be accelerated in any way by necessary to give effect to the transactions contemplated by this AgreementSection 1.6(c). Except as otherwise agreed to by the parties, (i) the provisions in the Company Stock Option Plans with respect to the right to issue or grant additional options or rights to acquire Common Stock shall terminate as of the Effective Time 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 indicates (ii) the extent of Company shall use its reasonable best efforts to assure that following the Effective Time no participant in the Stock Option Plans or other plans, programs or arrangements shall have any such acceleration. Section 3.2(b) right thereunder to acquire any equity securities of the NPS Disclosure Letter also contains a complete Company, the Surviving Corporation or any subsidiary thereof and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than terminate all such generally applicable vesting schedule (including a description of each such different vesting schedule)plans.

Stock Options. As (a) Prior to the Effective Time, the Board of Directors of the close Company (or, if appropriate, any committee thereof) will adopt appropriate resolutions and use its best efforts to take all other actions necessary to provide for the cancellation, effective at the Effective Time, of business on February 13all the outstanding stock options to purchase Company Common Stock (the "Options") granted under the Company's 1991 Stock Option Plan, 2003: as amended (the "Option Plan"). The Company will use its best efforts to ensure that each such Option, whether or not then vested or exercisable, will at the Effective Time no longer be exercisable for the purchase of shares of Company Common Stock. Each holder of an Option which is vested at the Effective Time, however, in cancellation and settlement thereof, shall have the right to receive from the Surviving Corporation a cash payment (less any applicable withholding taxes) in the aggregate amount equal to the product of (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Company Common Stock into which such Option would have been exercisable at the Effective Time if such Option had not been cancelled and (ii) the excess, if any, of the Merger Consideration over the exercise price per share for the shares of Company Common Stock subject to each such NPS Option; Option as expressly stated in the applicable stock option agreement or other agreement, without any interest thereon (iv) the "Option Consideration"). The Company will take such other actions as are necessary to fully advise holders of Options of their rights under this Agreement and the Options, to facilitate their timely exercise price of each such NPS Option; (v) rights and to effectuate the date on which each such NPS provisions of this Section 1.11. Prior to the Effective Time, the Acquiror and the Company will establish a procedure to effect the surrender of Options in exchange for the Option was granted; (vi) the extent Consideration to which each such NPS Option is vested and unvested as the holder of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS an Option will be accelerated entitled under this Section 1.11, and, upon surrender of such Option, the Surviving Corporation will pay to the holder thereof in cash the amount of the Option Consideration, if any, to which such holder will be entitled thereunder. Other than as expressly set forth in this Section 1.11, no holder of an Option will have from and after the Effective Time any way by other rights in respect thereof other than to receive payment for his or her Options equal to the transactions contemplated by this AgreementOption Consideration, and indicates the extent of any such acceleration. Section 3.2(b) Company will take all necessary actions to terminate effective as of the NPS Disclosure Letter also contains a complete Effective Time the Company's stock option plans, agreements and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)similar arrangements.

Stock Options. As Each employee stock option to purchase Old Shares granted under any employee stock option or compensation plan or arrangement of the close Company outstanding immediately prior to the Effective Time (an "Option") shall remain outstanding upon and following consummation of business on February 13the Recapitalization, 2003: and each such Option, whether or not then vested or exercisable immediately prior to the Effective Time, shall (i) three million ninety one thousand three hundred sixty nine if provided by the terms thereof (3,091,369or if accelerated in accordance with the relevant plan) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, become fully vested and exercisable at the Effective Time and (ii) no shares of NPS Common Stock are subject after the Effective Time represent the right to issuance pursuant receive, until the expiration thereof and in accordance with its terms, in exchange for the aggregate exercise price for such Option, without interest, the Recapitalization Consideration with respect to outstanding options, rights or warrants each Old Share that such holder would have been entitled to purchase NPS Common Stock issued other than pursuant receive had such holder exercised such Option in full immediately prior to the NPS Effective Time. The Recapitalization Consideration issuable upon exercise of an Option Plansshall be issued in the same proportion as holders of Old Shares would be entitled to receive their Recapitalization Consideration, but for fractional interests, among cash and New Shares and, if applicable, principal amount of Series A and Series B Debentures and Depositary Shares representing interests in the $25 liquidation preference of Public Preferred Stock, except that (i) if the Underwriting Alternative has not been consummated for any reason at of prior to the Effective Time with respect to the Depositary Shares, the Series A Debentures or the Series B Debentures, as the case may be, the total amount of each of Series A and Series B Debentures and Depositary Shares representing interests in the $25 liquidation preference of the Public Preferred Stock to be issued upon exercise of each such Option shall be rounded upwards to the nearest integral multiple of $100, $100 and $25, respectively (collectively, the "Option Adjustment"), and the amount of cash payable shall be reduced by a corresponding amount so that the holder does not receive fractional Depositary Shares, fractional Series A Debentures or fractional Series B Debentures (iiiprovided, however, if upon exercise of an Option the amount of cash to be received is less than the Option Adjustment, the total amount of each of Series A and Series B Debentures and Depositary Shares representing interests in the $25 liquidation preference of Public Preferred Stock shall be rounded downwards to the nearest integral multiple of $100, $100 and $25, respectively, and the amount of cash payable shall be increased by a corresponding amount so that the holder does not receive fractional Depositary Shares, fractional Series A Debentures or fractional Series B Debentures) thirty eight thousand seven hundred twenty five and (38,725ii) shares whether or not the Underwriting Alternative has been consummated at or prior to the Effective Time the total amount of NPS Common Stock are reserved for future issuance under New Shares issuable to each Option holder in respect of all Options held by such holder shall be rounded upwards to the NPS ESPPnearest whole New Share. All shares of NPS Common Stock subject Except as specifically provided in this Section 1.7, the Company shall not make any other adjustments to issuance as aforesaid, upon issuance on the terms and conditions specified in of the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option Options as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) issuance of the NPS Disclosure Letter contains a complete and accurate list ESOP Preferred Stocks or the terms of the following information with respect to each NPS Option outstanding as of February 13ESOP Preferred Stocks (including, 2003: (i) without limitation, the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested dividend and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting scheduleconversion rights thereof).

Stock Options. As of (a) At the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to each outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants option to purchase NPS Common Stock Shares (each "COMPANY STOCK OPTION" and, collectively, "COMPANY STOCK OPTIONS") issued other than pursuant to the NPS Company's 1995 Stock Plan, 2001 Incentive Stock Plan, 2001 Employee Stock Purchase Plan, 2002 Nonstatutory Stock Option PlansPlan, and (iii) thirty eight thousand seven hundred twenty five (38,725) Altius 1999 Plan or other agreement or arrangement, whether vested or unvested, shall be converted as of the Effective Time into options to purchase shares of NPS Parent Common Stock are reserved for future issuance under the NPS ESPPin accordance with this Section 1.11. All shares of NPS Common plans or agreements described above pursuant to which any Company Stock subject Option has been issued or may be issued are referred to issuance collectively as aforesaidthe "COMPANY PLANS." At the Effective Time, upon issuance each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions specified in the instruments pursuant (including but not limited to which they are issuablevesting schedule) as were applicable to such Company Stock Option, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements a number of any character shares of Parent Common Stock equal to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Parent Common Stock subject that the holder of such Company Stock Option would have been entitled to each receive pursuant to the Merger had such NPS Option; holder exercised such option in full immediately prior to the Effective Time at a price per share equal to (ivx) the aggregate exercise price of each for the Shares otherwise purchasable pursuant to such NPS Option; Company Stock Option divided by (vy) the date on which each such NPS Option was granted; product of (vii) the extent number of Shares otherwise purchasable pursuant to such Company Stock Option multiplied by (ii) the Exchange Ratio, rounded down to the nearest cent; provided, however, that in the case of any option to which each such NPS Option is vested and unvested as Section 421 of a recent practicable date; the Code applies by reason of its qualification under Section 422 of the Code (vii"INCENTIVE STOCK OPTIONS" or "ISOs") the date on which each option price, the number of shares purchasable pursuant to such NPS Option expires option and (viii) whether the exercisability terms and conditions of each exercise of such NPS Option will option shall be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. determined so as to comply with Section 3.2(b424(a) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Code.

Stock Options. As Prior to the Effective Time, Xxxxx shall use its commercially reasonable efforts to provide that each option to purchase Xxxxx Shares granted under Xxxxx’x 1997 Employee, Director and Consultant Stock Option Plan and its 2005 Stock Plan (in each case, a “Xxxxx Option”) outstanding at the Effective Time which is vested (in each case, a “Vested Xxxxx Option”) shall entitle each holder thereof to receive a payment in cash from the Surviving Corporation, upon the Effective Time, equal to the product of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares the number of NPS Common Stock are Xxxxx Shares previously subject to issuance pursuant to outstanding NPS Options, such Vested Xxxxx Option and (ii) no shares the excess, if any, of NPS Common Stock are the Merger Consideration over the exercise price per Xxxxx Share previously subject to issuance pursuant such Vested Xxxxx Option. All applicable withholding taxes attributable to outstanding optionsthe payments made hereunder shall be deducted from the amounts payable hereunder; provided, rights or warrants however, that with respect to any person subject to Section 16 of the Exchange Act, any such amount shall be paid as soon as practicable after the first date payment can be made without liability to such person under Section 16(b) of the Exchange Act. Xxxxx shall, upon the request of any holder of Vested Xxxxx Options, permit such holder to execute and deliver to Xxxxx, prior to the expiration of the Offer, an agreement substantially in the form of Annex B (an “Option Election”) under which such holder would agree, Agreement and Plan of Merger contingent upon the purchase NPS Common Stock issued other than of Xxxxx Shares by Acquisition Subsidiary pursuant to the NPS Option PlansOffer, to cause, immediately prior to the expiration of the Offer, such Vested Xxxxx Options to be exercised and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option Xxxxx Shares issued as a result of that exercise to be tendered in the Mergers Offer. Xxxxx and Acquisition Subsidiary shall reflect on their books and records the transactions effected pursuant to the Option Elections. At the Effective Time, (A) each Xxxxx Option (whether alone vested or upon not) outstanding immediately prior to the occurrence Effective Time with an exercise price per share that is less than the applicable Merger Consideration for the class of any additional or subsequent events). There are no outstanding or authorized stock appreciationXxxxx Shares into which such Xxxxx Option is exercisable shall be cancelled by Xxxxx in exchange for the right to receive, phantom stockwithout interest, profit participation or other similar rights with respect a cash amount equal to NPS. Section 3.2(b) the product of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i1) the name excess, if any, of the optionee in respect of each (x) such NPS Option; Merger Consideration, over (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (ivy) the exercise price per share of each such NPS OptionXxxxx Option multiplied by (2) the total number of Xxxxx Shares subject to such Xxxxx Option (such product, as applied to Xxxxx Options referred to as “Option Consideration”); (vB) each Xxxxx Option (whether vested or not) outstanding as of the Effective Time with an exercise price per share that is equal to or greater than the applicable Merger Consideration for the class of Xxxxx Shares into which such Xxxxx Option is exercisable shall be terminated, without any consideration therefor; and (C) the Board of Directors of Xxxxx shall take any actions necessary to effect the transactions anticipated by this Section 2.5(e) under its 1997 Employee, Director and Consultant Stock Option Plan and its 2005 Stock Plan and all Xxxxx Option agreements and any other plan or arrangement of Xxxxx (whether written or oral, formal or informal). As soon as practicable following the date on which hereof, Xxxxx shall deliver or cause to be delivered to each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as holder of a recent practicable date; (vii) the date on which each such NPS Xxxxx Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way certifications, notices or other communications required by the terms of such Xxxxx Option or any agreement entered into with respect thereto to be delivered to such holder prior to the Effective Time and the other transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule).

Stock Options. As of (a) At the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to each outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants option to purchase NPS Common IPIX Shares (an "IPIX Stock Option" or collectively, "IPIX Stock Options") issued other than pursuant to the NPS 1997 Equity Compensation Plan, whether vested or unvested, and all other outstanding options to purchase IPIX Shares that are listed in Section 1.09 of the Disclosure Schedule shall be assumed by bamboo (all of such plans or agreements pursuant to which any IPIX Stock Option has been issued or may be issued are referred to collectively as the "IPIX Stock Option Plans"). Each IPIX Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such IPIX Stock Option, the same number of bamboo Shares (iiirounded up to the nearest whole share) thirty eight thousand seven hundred twenty five 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 (38,725rounded 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 option price, the number of shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject purchasable pursuant to issuance as aforesaid, upon issuance on such option and the terms and conditions specified of exercise of such option shall be determined in the instruments pursuant order to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights comply with respect to NPS. Section 3.2(bsection 424(a) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Code.

Stock Options. As (a) Subject to the next sentence, the Company will, on the basis described in Section 3.04(b), take all requisite action so as to cause at or immediately prior to the Effective Time each stock option to purchase Common Shares (each, an "OPTION") outstanding under any employee stock option or compensation plan or arrangement of the close Company, whether or not vested or exercisable, shall be canceled, and the Company shall, subject to Section 3.09, pay each holder of business on February 13, 2003: any such option at or promptly after the Effective Time for each such option an amount in cash determined by multiplying (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares the excess, if any, of NPS the Common Stock are subject to issuance pursuant to outstanding NPS Options, Merger Consideration over the applicable per share exercise price of such option by (ii) no shares the number of NPS Common Stock are subject to issuance pursuant to outstanding Shares such holder could have purchased (assuming full vesting of all options, rights or warrants to purchase NPS Common Stock issued other than pursuant ) had such holder exercised such option in full immediately prior to the NPS Option PlansEffective Time. Notwithstanding the foregoing, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under with respect to the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements unvested portion of any character to which NPS is bound obligating NPS to Option that either (i) does not accelerate the vesting of any NPS Option in accordance with its terms as a result of the Mergers transactions contemplated by this Agreement or (whether alone or upon ii) accelerates in accordance with its terms as a result of the occurrence transactions contemplated by this Agreement but the holder of any additional or subsequent eventssuch Option has waived such acceleration pursuant to an agreement described in Section 7.15(ii), such acceleration and cancellation and payment, to the extent that the acceleration and/or the cancellation and payment pursuant to this Section 3.04(a) would constitute a "parachute payment" pursuant to Section 280G of the Code, shall be made only if the requisite approval of the stockholders of the Company contemplated in Section 7.15 (the "STOCKHOLDER APPROVAL") is obtained. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights In the event that the Stockholder Approval is not obtained with respect to NPS. such unvested portion of an Option, the Company will not take any action to cause such unvested portion of an Option to be cancelled in exchange for the cash payment set forth in this Section 3.2(b3.04(a) and the Company will not take any action to cause the vesting of the NPS Disclosure Letter contains a complete and accurate list of the following information such Option to accelerate in connection with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, . Such Option shall remain outstanding following the Closing Date in accordance with its terms and indicates the extent conditions (other than any provision that provides for accelerated vesting as a result of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting scheduletransactions contemplated by this Agreement).

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 close Company or any of business on February 13its Subsidiaries, 2003: each as amended (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common the "Stock are subject to issuance pursuant to outstanding NPS OptionsOption Plans"), (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant shall become fully exercisable and vested immediately prior to the NPS 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 (iii1) thirty eight thousand seven hundred twenty five 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, (38,725A) shares an amount in cash equal to (x) the cash payable to the holder of NPS one share of Company Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character Section 3.2 assuming all Options had been exercised prior to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers Effective Time minus (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (iy) the name exercise price per share of such Option (the optionee in respect of each such NPS Option; "Exercise Difference"), plus (iiB) the particular plan pursuant to which each such NPS Option was granted; (iii) the certificates representing that number of shares of NPS Buyer Class A Common Stock subject which the holder of one share of Company Common Stock would have the right to each such NPS Option; 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, plus (ivC) Warrants in an amount issued to the holder of one share of Company Common Stock pursuant to Section 3.5, plus (D) the exercise price right to receive the Contingent Additional Consideration that may be payable to the holder of each 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 NPS Option; 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 deducted from the amounts payable under clause (vA) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as above or by payment of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way cash by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(bOption holder if amounts payable under clause (A) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)are insufficient.

Stock Options. (a) As soon as practicable following the date of this Agreement, the close Board of business on February 13Directors of AVEMCO (or, 2003if appropriate, any committee administering the AVEMCO Stock Option Plans) shall adopt such resolutions or take such other actions as may be required to effect the following with respect to all options to purchase shares of AVEMCO Common Stock granted under the AVEMCO Stock Option Plans or otherwise ("Options") not exercised prior to the Closing Date: (i) three million ninety one thousand three hundred sixty nine (3,091,369) adjust the terms of all such Options to purchase shares of NPS AVEMCO Common Stock are subject to issuance pursuant provide that, at the Effective Time, each Option outstanding immediately prior to outstanding NPS Optionsthe Effective Time shall be deemed to constitute an option to acquire, (ii) no on substantially the same terms and conditions, as were applicable to such Option under the terms of such Option and the applicable AVEMCO Stock Option Plans, the same number of shares of NPS HCCH Common Stock are subject (rounded down to issuance pursuant the nearest whole share) as the holder of such Option would have been entitled to outstanding options, rights or warrants to purchase NPS Common Stock issued other than receive pursuant to the NPS Merger had such holder exercised such Option Plansin full immediately prior to the Effective Time, and at a price per share equal to (iiiy) thirty eight thousand seven hundred twenty five (38,725) the aggregate exercise price for the shares of NPS AVEMCO Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments otherwise purchasable pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS such Option as a result of the Mergers divided by (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iiiz) the number of shares of NPS HCCH Common Stock deemed purchasable pursuant to such Option; provided, however, that (i) no certificate or scrip representing fractional shares of HCCH Common Stock shall be issued in respect of any Option as adjusted pursuant to this Section 2.5 and (ii) any such fractional share will not entitle the owner thereof to vote or to any rights of a shareholder of HCCH; provided, further, that in the case of any option to which Section 421 of the Code applies by reason of its qualification under any of Section 422 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 option shall be determined in order to comply with Section 424(a) of the Code; and (ii) make such other changes to the AVEMCO Stock Option Plans as it deems appropriate to give effect to the Merger (subject to each the approval of HCCH, which shall not be unreasonably withheld). (b) Any provisions in the AVEMCO Stock Option Plans providing for the issuance, transfer or grant of any capital stock of AVEMCO or any interest in respect of any capital stock of AVEMCO shall be deleted as of the Effective Time, and AVEMCO shall use commercially reasonable efforts to ensure that following the Effective Time no holder of an Option or any participant in any AVEMCO Stock Option Plan shall have any right thereunder to acquire any capital stock of AVEMCO, HCCH or the Surviving Corporation, except as contemplated in this Section 2.5. 7 13 (c) As soon as practicable after the Effective Time, HCCH shall deliver to the holders of Options appropriate notices setting forth such NPS Option; holder's rights pursuant to the respective AVEMCO Stock Option Plans and the agreements evidencing the grants of such Options shall continue in effect on substantially the same terms and conditions (ivsubject to the adjustments required by this Section 2.5 after giving effect to the Merger). Except as otherwise provided in this Section 2.5, HCCH shall comply with the terms of the AVEMCO Stock Option Plans and ensure, to the extent required by, and subject to the provisions of such AVEMCO Stock Option Plans, that the Options which qualified as incentive stock options prior to the Effective Time continue to qualify as incentive stock options after the Effective Time. (d) HCCH agrees to use commercially reasonable efforts to take such actions as are necessary for the conversion of the Options in accordance with this Section 2.5, including: (i) the exercise price reservation, issuance and listing of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent HCCH Common Stock as is necessary to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by effectuate the transactions contemplated by Section 2.5; (ii) entering into such agreements as are necessary to assume such Options; and (iii) the filing of a registration statement or statements pursuant to Section 8.6 hereof, to facilitate the public sale of stock issuable upon the exercise of such Options. (e) A holder of an Option adjusted in accordance with this AgreementSection 2.5 may exercise such adjusted Option in whole or in part in accordance with its terms by delivering a properly executed notice of exercise to HCCH, together with the consideration therefor and indicates the extent of any such accelerationfederal withholding tax amount, if any, required in accordance with the related AVEMCO Stock Option Plans. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule).ARTICLE III THE SURVIVING CORPORATION SECTION 3.1

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 close Company (a “Company Stock Option”), whether or not exercisable or vested, shall be adjusted as necessary to provide that, at the Effective Time, each Company Stock Option outstanding immediately prior to the Effective Time shall be deemed to constitute a fully vested option (each, an “Adjusted Option”) to acquire, on the same terms and conditions, other than vesting, as were applicable under such Company Stock Option, the number of business on February 13, 2003: shares of Parent Stock equal to the product of (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Company Stock subject to each such NPS Option; Company Stock Option immediately prior to the Effective Time multiplied by (ivii) the Stock Option Exchange Ratio. 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 each Company Stock subject to such NPS Option; Company Stock Option immediately prior to the Effective Time divided by (vB) the date on which Stock Option Exchange Ratio; provided that the exercise price otherwise determined shall be increased to the extent, if any, required to ensure that the In The Money Amount of the 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, the exercise price of, and number of shares subject to, (i) each such NPS Adjusted Option was granted; shall be determined as necessary to comply with Section 409A of the Code, and (viii) (x) any fractional share of Parent Stock resulting from an aggregation of all the extent shares of a holder subject to any Company Stock Option shall be rounded down to the nearest whole share and (y) for any Company Stock Option to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) 421 of the NPS Disclosure Letter also contains a complete and accurate description Code applies by reason of its qualification under any of Sections 422 through 424 of the vesting schedule generally applicable Code, the option price, the number of shares purchasable pursuant to NPS Options, such option and the terms and conditions of exercise of such option shall specifically identify each NPS Option be determined in order to comply with a vesting schedule that is different than such generally applicable vesting schedule (including a description Section 424 of each such different vesting schedule)the Code.

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine On the Effective Date, each option to acquire First Home Common Stock which is then outstanding (3,091,369) "First Home Option"), whether or not exercisable, shall cease to represent a right to acquire shares of NPS First Home Common Stock are subject and shall be converted automatically into an option to issuance pursuant to outstanding NPS Optionspurchase shares of Sovereign Common Stock and the corresponding number of Sovereign Stock Purchase Rights, and Sovereign shall assume each First Home Option, in accordance with the terms of the applicable First Home Stock Option Plan and stock option agreement by which it is evidenced, except that from and after the Effective Date, (i) Sovereign and its Board of Directors or a duly authorized committee thereof shall be substituted for First Home and First Home's Board of Directors or duly authorized committee thereof administering such First Home Stock Option Plan, (ii) no each First Home Option assumed by Sovereign may be exercised solely for shares of NPS Sovereign Common Stock are subject to issuance pursuant to outstanding optionsand Sovereign Stock Purchase Rights, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Sovereign Common Stock subject to each such NPS Option; First Home Option shall be equal to the number of shares of First Home Common Stock subject to such First Home Option immediately prior to the Effective Date multiplied by the Applicable Exchange Ratio, provided that any fractional shares of Sovereign Common Stock resulting from such multiplication shall be rounded down to the nearest share, and (iv) the per share exercise price of under each such NPS Option; (v) First Home Option shall be adjusted by dividing the date on which per share exercise price under each such NPS First Home Option was granted; by the Applicable Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. Notwithstanding clauses (viiii) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(biv) of the NPS Disclosure Letter also contains a complete and accurate description preceding sentence, each First Home Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the vesting schedule generally applicable to NPS OptionsIRC, and shall specifically identify each NPS Option with the regulations promulgated thereunder, so as not to constitute a vesting schedule that is different than such generally applicable vesting schedule (including a description modification, extension or renewal of each such different vesting schedulethe option within the meaning of Section 424(h) of the IRC. Sovereign and First Home agree to take all necessary steps to effect the foregoing provisions of this Section 1.02(f).. A-7

Stock Options. As 2.3.1 Subject to satisfaction of the close requirements set forth in Code Section 280G(b)(5)(A)(ii), including the shareholder approval requirements set forth at Code Sections 280G(b)(5)(A)(ii)(II) and 280G(b)(5)(B), and the applicable regulations thereunder, in a manner sufficient to assure that receipt by the optionees identified on Schedule 2.3(a) of business the Buyer Shares identified on February 13such Schedule and further described in the following sentence will, 2003: pursuant to Code Section 280G(b)(5)(A), not be treated as a parachute payment, Company shall take all actions (iincluding, if appropriate amending individual option agreements and obtaining optionee consents) three million ninety one thousand three hundred sixty nine (3,091,369) shares that are necessary such that each vested and unvested Company Option which is outstanding at the Effective Time shall, by virtue of NPS Common Stock are the Merger, be cancelled immediately following the Effective Time in exchange for that number of Buyer Shares set forth opposite each such option holder’s name on Schedule 2.3(a). All of such Buyer Shares upon issuance shall be subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, forfeiture and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance shall vest on the terms summarized in Schedule 2.3(a). Such restricted Buyer Shares will be issued to the grantees solely in consideration of the cancellation of the Company Options held by such grantees and conditions specified in as compensation for services rendered by them; and none of such restricted Buyer Shares will be issued for any of the instruments Company’s Series A preferred stock, Class B Common Stock, Class C Common Stock, Class D Common Stock, Class E Common Stock or Class F Common Stock being changed and converted to Buyer Shares pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessableSection 2.1.1. There are no commitments or agreements of any character The Company shall make reasonable efforts to which NPS is bound obligating NPS comply with requirements under Code Section 280G(b)(5)(A)(ii) so as to accelerate assure that receipt by the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(boptionees identified on Schedule 2.3(a) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13Buyer Shares described on such Schedule will, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each Code Section 280G(b)(5)(A), not be treated as a parachute payment; and none of such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject optionees shall have a right to each receive such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this AgreementBuyer Shares, and indicates the extent of nor shall any such acceleration. shares be awarded to either of them, unless the requirements of Code Section 3.2(b280G(b)(5)(A)(ii), including the shareholder approval requirements set forth at Code Sections 280G(b)(5)(A)(ii)(II) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options280G(b)(5)(B), and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)are satisfied.

Stock Options. As Effective as of the close date hereof (the “Award Date”), the Corporation has granted XXXXX ten (10) year non-qualified options for the purchase of business up to 200,000 shares of the Corporation’s common stock, par value $0.01 per share (the “Common Stock”) under the Corporation’s 2006 Stock Incentive Plan (“Plan”) at an exercise price of $5.11 per share, which represents the closing stock price of the Corporation’s Common Stock on February 13the trading date immediately prior to the Award Date (the “Stock Option Grant”). The terms of the Stock Option Grant, 2003including the vesting schedule, shall be as set forth in a separate option agreement executed by and between the parties. Such option agreement shall provide, among other things, that the options shall vest pro rata on a quarterly basis (commencing 90 days from the date hereof) over a period of four years, subject to acceleration as provided herein. Any subsequent stock option grants will be determined annually by the Board (and any committee of the Board delegated authority over employee compensation matters). The Corporation hereby represents and warrants to XXXXX that the shares of Common Stock issuable upon exercise of the options referred to herein are covered by an existing effective registration statement of the Corporation on Form S-8 (a “Form S-8”). Notwithstanding anything to the contrary contained in the foregoing, if at any time such shares of Common Stock issuable upon exercise of the options referred to herein are not covered by an existing effective Form S-8, (a) the Corporation agrees that if, at any time, and from time to time, it shall authorize the filing of a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), in connection with the proposed offer of any of its securities by it or any of its stockholders, the Corporation shall: (i1) three million ninety one thousand three hundred sixty nine (3,091,369) promptly notify XXXXX that such registration statement to cover all such shares of NPS Common Stock are subject issuable upon exercise of the options referred to issuance pursuant to outstanding NPS Optionsherein will be included in such registration statement at XXXXX’x request, (ii2) no cause such registration statement to cover all such shares of NPS Common Stock are subject issuable upon exercises of the options referred to issuance pursuant herein for which XXXXX requests inclusion, (3) use best efforts to outstanding options, rights or warrants cause such registration statement to purchase NPS Common Stock issued other than pursuant to the NPS Option Plansbecome effective as soon as practicable, and (iii4) thirty eight thousand seven hundred twenty five (38,725) take all other reasonable action necessary under any federal or state law or regulation of any governmental authority to permit all such shares of NPS Common Stock are reserved issuable upon exercise of the options referred to herein to be sold or otherwise disposed of, and will maintain such compliance with each such federal and state law and regulation of any governmental authority for future issuance the period necessary for XXXXX to promptly effect the proposed sale or other disposition; and (b) XXXXX may make a written request that the Corporation effect a registration under the NPS ESPP. All Securities Act covering such shares of NPS Common Stock subject issuable upon exercise of the options referred to issuance herein and the Corporation shall (1) use best efforts to cause such registration statement to become effective as aforesaidsoon as practicable, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments (2) take all other reasonable action necessary under any federal or agreements state law or regulation of any character governmental authority to which NPS is bound obligating NPS permit all such shares of Common Stock issuable upon exercise of the options referred to accelerate the vesting herein to be sold or otherwise disposed of, and will maintain such compliance with each such federal and state law and regulation of any NPS Option as a result of governmental authority for the Mergers (whether alone or upon period necessary for XXXXX to promptly effect the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation proposed sale or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)disposition.

Stock Options. As (a) Except as provided in Section 3.4(c) below, the Company shall take all actions (including, but not limited to, obtaining any and all consents from employees to the matters contemplated by this Section 3.4) necessary to provide that all outstanding options and other rights to acquire shares ("Stock Options") granted under any stock option or deferred compensation plan, program or similar arrangement or any employment agreement of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding Company or any Subsidiaries other than options, rights or warrants to purchase NPS Common Stock issued other if any, of A&S, each as amended (the "Option Plans"), shall become fully exercisable and vested on the date (the "Vesting Date") which shall be set by the Company and which, in any event, shall be not less than pursuant thirty (30) days prior to the NPS Option PlansEffective Time, whether or not otherwise exercisable and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPPvested. All shares Stock Options which are outstanding immediately prior to the Effective Time shall be cancelled as of NPS the Effective Time and the holders thereof shall be entitled to receive from the Company, for each share of Company Common Stock subject to issuance as aforesaidsuch Stock Option, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) an amount in cash equal to the name difference between the Cash Consideration and the exercise price per share of such Stock Option, which amount shall be payable at the optionee Effective Time, plus (ii) 0.25 shares of A&S Common Stock (and in the case of fractional shares, the Fractional Share Payment), which shall be held by the Depositary pending delivery after the Effective Time. All applicable withholding taxes attributable to the payments made hereunder or to distributions contemplated hereby shall be deducted from the amounts payable under clauses (i) and (ii) above and all such taxes attributable to the exercise of Stock Options on or after the Vesting Date shall be withheld from the proceeds received in the Merger, in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Company Common Stock subject to each issuable on such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)exercise.

Stock Options. As Subject of approval by the close Holdings Board, Executive shall be granted an option (the “Option”) to purchase a total of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) 1,725,000 shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares common stock of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than Holdings pursuant to the NPS Educate, Inc. 2003 Omnibus Stock Incentive Plan (the “Plan”), with a per share exercise price equal to $2.97. The Option Plansshall vest as to 1/36 of the shares subject to the Option at the end of each full month following the date of grant. In the event of a “Change of Control” of the Company, the Option shall vest in full and become and remain immediately exercisable at such time as will permit him to exercise the Option in connection with the Change of Control and, if not therein exercised, shall remain outstanding and exercisable for the longer of two (iii2) thirty eight thousand seven hundred twenty five years (38,725six (6) shares months in the event the Change of NPS Common Stock are reserved for future issuance Control occurs at any time following any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the NPS ESPPSecurities Act of 1933, as amended, (“IPO”)) or the duration provided in the Plan, but in no event shall such Option be exercisable following the expiration date. All shares of NPS Common Stock Except as otherwise provided, the Option shall be subject to issuance as aforesaid, upon issuance on the terms and conditions specified of the Plan and the form of option agreement approved by the Board. The Executive may immediately or in the instruments pursuant future transfer or direct the Company to which they are issuableprovide directly, would the Executive’s vested and unvested Option to Sterling Partners I, L.P. (the “Options Transferee”). In the event the Executive elects to transfer or direct the Company to provide directly, the Executive’s vested and unvested Option to the Options Transferee, the Executive agrees that the Company shall be duly authorized, validly issued, fully paid and nonassessable. There are under no commitments or agreements of any character obligation to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights registration obligations with respect to NPS. Section 3.2(b) the shares issuable upon exercise of the NPS Disclosure Letter contains a complete Option by the Options Transferee. The parties agree that the compensation described in this Section 3.5 may actually be provided through options or restricted stock as the parties may mutually agree and accurate list of that all references throughout this Agreement to “options” will be deemed to refer to the following information eventual compensation arrangement under this section, and that any references to share numbers or exercise prices with respect to each NPS Option outstanding as of February 13, 2003: (i) options shall not apply to the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant restricted stock unless specifically agreed to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)both parties.

Stock Options. As All options and warrants (individually, a "Frontier ------------- -------- Option" and collectively, the "Frontier Options") outstanding at the Effective ------ ---------------- Time to purchase securities of Frontier under any stock option plans or agreements adopted by Frontier or otherwise (the "Frontier Stock Option Plans") --------------------------- shall remain outstanding following the Effective Time. At the Effective Time, such Frontier Options, by virtue of the close Merger and without any further action on the part of business on February 13Frontier or the holder of such Frontier Options, 2003: shall be assumed by West Pac in such manner that West Pac (ia) three million ninety one thousand three hundred sixty nine is a corporation (3,091,369or a parent or a subsidiary corporation of such corporation) "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code; or (b) to the extent that Section 424 of the Code does not apply to any such Frontier Options, would be such a corporation (or a parent or a subsidiary corporation of such corporation) were Section 424 applicable to such option. Each Frontier Option assumed by West Pac shall be exercisable upon the same terms and conditions as under the applicable Frontier Stock Option Plan and the applicable option agreement issued thereunder, except that (x) the unexercised portion of each such Frontier Option shall be exercisable for that whole number of shares of NPS West Pac Common Stock are subject (rounded to issuance pursuant the nearest whole share, with 0.5 rounded upward) equal to outstanding NPS Options, (ii) no the number of shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Frontier Common Stock subject to issuance the unexercised portion of such Frontier Option multiplied by the Exchange Ratio; and (y) the option exercise price per share of West Pac Common Stock shall be an amount equal to the option exercise price per share of Frontier Common Stock subject to such Frontier Option in effect at the Effective Time divided by the Exchange Ratio (the option price per share, as aforesaidso determined, upon issuance on being rounded to the nearest full cent, with $0.005 rounded upward). No payment shall be made for fractional interests. The term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Code, if applicable, and all of the other terms and conditions specified in of the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments Frontier Options shall otherwise remain unchanged unless modified by or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers transaction contemplated by this Agreement. As soon as practicable after the Effective Time, West Pac shall deliver to the holders of Frontier Options appropriate notices setting forth such holders' rights pursuant to such Company Options, as amended by this Section 1.5, as well as notice of West Pac's assumption of Frontier's obligations with respect thereto (whether alone or upon the occurrence which occurs by virtue of any additional or subsequent eventsthis Agreement). There are no outstanding or authorized stock appreciationWest Pac shall take all corporate actions necessary to reserve for issuance such number of shares of West Pac Common Stock as will be necessary to satisfy exercises in full of all Frontier Options after the Effective Time. Within forty-five (45) days after the Effective Time, phantom stockWest Pac shall register the shares of West Pac Common Stock issuable upon exercise of such Frontier Options with the Securities and Exchange Commission on Form S-8 and, profit participation or other similar rights with respect to NPS. Section 3.2(b) for a period running until the earlier of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) ten (10) years after the name of the optionee in respect of each such NPS OptionEffective Time; or (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number exercise of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) all of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Frontier Options, and shall specifically identify each NPS Option with maintain the effectiveness of such Form S-8 Registration Statement unless the Surviving Corporation is acquired after the Effective Time by any Person that does not have a vesting schedule that is different than such generally applicable vesting schedule (including a description class of each such different vesting schedule)securities registered under the Exchange Act.

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 close Company or any of business on February 13its Subsidiaries, 2003: each as amended (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common the "Stock are subject to issuance pursuant to outstanding NPS OptionsOption Plans"), (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant shall become fully exercisable and vested immediately prior to the NPS 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 (iii1) thirty eight thousand seven hundred twenty five 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, (38,725A) shares an amount in cash equal to (x) the cash payable to the holder of NPS one share of Company Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character Section 3.2 assuming all Options had been exercised prior to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers Effective Time minus (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (iy) the name exercise price per share of such Option (the optionee in respect of each such NPS Option; "Exercise Difference"), plus (iiB) the particular plan pursuant to which each such NPS Option was granted; (iii) the certificates representing that number of shares of NPS Buyer Class A Common Stock subject which the holder of one share of Company Common Stock would have the right to each such NPS Option; 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, plus (ivC) Warrants in an amount issued to the holder of one share of Company Common Stock pursuant to Section 3.5, plus (D) the exercise price right to receive the Contingent Additional Consideration that may be payable to the holder of each 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 NPS Option; 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 deducted from the amounts payable under clause (vA) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as above or by payment of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way cash by the transactions contemplated by this Agreement, and indicates Option holder if amounts payable under clause (A) are insufficient. (b) The Stock Option Plans shall terminate immediately prior to the extent of any such accelerationEffective Time. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)3.8.

Stock Options. As of the close of business on February 13, 2003: (ia) three million ninety one thousand three hundred sixty nine (3,091,369) Each outstanding option to purchase shares of NPS MediaOne Common Stock are subject 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 issuance pursuant provide that, at the Effective Time, each MediaOne Stock Option outstanding immediately prior to outstanding NPS Optionsthe Effective Time shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such MediaOne Stock Option (ii) no including terms regarding vesting), the same number of shares of NPS Comcast Common Stock are subject as the holder of such MediaOne Stock Option would have been entitled to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than receive pursuant to the NPS Merger had such holder exercised such MediaOne Stock Option Plansin 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 "ADJUSTED OPTION"); provided that any fractional share of Comcast Common Stock resulting from an aggregation of all the shares of a holder subject to MediaOne Stock Option shall be rounded up to the nearest whole share, and (iii) thirty eight thousand seven hundred twenty five (38,725) provided further that, for any MediaOne 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 of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject purchasable pursuant to issuance as aforesaid, upon issuance on such option and the terms and conditions specified of exercise of such option shall be determined in the instruments pursuant order to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result comply with Section 424 of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Code.

Stock Options. As of Prior to the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject OPTA shall use its commercially reasonable efforts to issuance pursuant to provide that each outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants option to purchase NPS Common OPTA Shares (in each case, a “OPTA Option”) granted under OPTA’s 1992 Employee, Director and Consultant Stock issued other than pursuant Option Plan and its 1991 Non-Employee Stock Option Plan (together, the “Stock Option Plans”), whether or not then vested or exercisable, shall be exercisable for and entitle each holder thereof to, a payment in cash from the Surviving Corporation, upon exercise, equal to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares product of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name number of the optionee in respect of each OPTA Shares previously subject to such NPS Option; OPTA Option and (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) excess, if any, of the number of shares of NPS Common Stock subject to each such NPS Option; (iv) Merger Consideration over the exercise price per OPTA Share previously subject to such OPTA Option (such product, the “Net Gains”). All applicable withholding taxes attributable to the payments made hereunder shall be deducted from the amounts payable hereunder; provided, however, that with respect to any person subject to Section 16 of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this AgreementExchange Act, and indicates the extent of any such acceleration. amount shall be paid as soon as practicable after the first date payment can be made without liability to such person under Section 3.2(b16(b) of the NPS Disclosure Letter also contains a complete Exchange Act. Immediately prior to the Effective Time, ACQUIROR shall provide or cause to be provided to OPTA the funds necessary to pay the aggregate amount of Net Gains attributable to all OPTA Options that OPTA becomes obligated to pay pursuant to this Section 2.5(e). OPTA shall make all payments of Net Gains required by this Section 2.5(e) immediately prior to the Effective Time, although it shall deduct and accurate description withhold from the amounts otherwise payable pursuant to this Section 2.5(e) such amounts as it is required to deduct and withhold with respect to the making of such payments under the Internal Revenue Code of 1986 (the “Code”) or any other applicable state, local or federal tax law or tax laws of foreign jurisdictions. To the extent that amounts are so withheld by OPTA, the withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the vesting schedule generally applicable OPTA Option in respect of which such withholding was made by OPTA. The Surviving Corporation will promptly comply with all tax laws requiring it to NPS Optionsforward such withheld taxes and/or pay its own taxes to the responsible Governmental Entity, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description as well as reporting the amount of each such different vesting scheduleincome resulting from the payments made pursuant to this Section 2.5(e).

Stock Options. As All options and warrants (individually, a "FRONTIER OPTION" and collectively, the "FRONTIER OPTIONS") outstanding at the Effective Time to purchase securities of Frontier under any stock option plans or agreements adopted by Frontier or otherwise (the "FRONTIER STOCK OPTION PLANS") shall remain outstanding following the Effective Time. At the Effective Time, such Frontier Options, by virtue of the close Merger and without any further action on the part of business on February 13Frontier or the holder of such Frontier Options, 2003: shall be assumed by West Pac in such manner that West Pac (ia) three million ninety one thousand three hundred sixty nine is a corporation (3,091,369or a parent or a subsidiary corporation of such corporation) "assuming a stock option in a transaction to which Section 424(a) applied" within the meaning of Section 424 of the Code; or (b) to the extent that Section 424 of the Code does not apply to any such Frontier Options, would be such a corporation (or a parent or a subsidiary corporation of such corporation) were Section 424 applicable to such option. Each Frontier Option assumed by West Pac shall be exercisable upon the same terms and conditions as under the applicable Frontier Stock Option Plan and the applicable option agreement issued thereunder, except that (x) the unexercised portion of each such Frontier Option shall be exercisable for that whole number of shares of NPS West Pac Common Stock are subject (rounded to issuance pursuant the nearest whole share, with 0.5 rounded upward) equal to outstanding NPS Options, (ii) no the number of shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Frontier Common Stock subject to issuance the unexercised portion of such Frontier Option multiplied by the Exchange Ratio; and (y) the option exercise price per share of West Pac Common Stock shall be an amount equal to the option exercise price per share of Frontier Common Stock subject to such Frontier Option in effect at the Effective Time divided by the Exchange Ratio (the option price per share, as aforesaidso determined, upon issuance on being rounded to the nearest full cent, with $0.005 rounded upward). No payment shall be made for fractional interests. The term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Code, if applicable, and all of the other terms and conditions specified in of the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments Frontier Options shall otherwise remain unchanged unless modified by or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers transaction contemplated by this Agreement. As soon as practicable after the Effective Time, West Pac shall deliver to the holders of Frontier Options appropriate notices setting forth such holders' rights pursuant to such Company Options, as amended by this Section 1.5, as well as notice of West Pac's assumption of Frontier's obligations with respect thereto (whether alone or upon the occurrence which occurs by virtue of any additional or subsequent eventsthis Agreement). There are no outstanding or authorized stock appreciationWest Pac shall take all corporate actions necessary to reserve for issuance such number of shares of West Pac Common Stock as will be necessary to satisfy exercises in full of all Frontier Options after the Effective Time. Within forty-five (45) days after the Effective Time, phantom stockWest Pac shall register the shares of West Pac Common Stock issuable upon exercise of such Frontier Options with the Securities and Exchange Commission on Form S-8 and, profit participation or other similar rights with respect to NPS. Section 3.2(b) for a period running until the earlier of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) ten (10) years after the name of the optionee in respect of each such NPS OptionEffective Time; or (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number exercise of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) all of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Frontier Options, and shall specifically identify each NPS Option with maintain the effectiveness of such Form S-8 Registration Statement unless the Surviving Corporation is acquired after the Effective Time by any Person that does not have a vesting schedule that is different than such generally applicable vesting schedule (including a description class of each such different vesting schedule)securities registered under the Exchange Act.

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 close Company or any of business on February 13its Subsidiaries, 2003: each as amended (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common the "Stock are subject to issuance pursuant to outstanding NPS OptionsOption Plans"), (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant shall become fully exercisable and vested immediately prior to the NPS 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 (iii1) thirty eight thousand seven hundred twenty five 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, (38,725A) shares an amount in cash equal to (x) the cash payable to the holder of NPS one share of Company Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character Section 3.2 assuming all Options had been exercised prior to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers Effective Time minus (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (iy) the name exercise price per share of such Option (the optionee in respect of each such NPS Option; "Exercise Difference"), plus (iiB) the particular plan pursuant to which each such NPS Option was granted; (iii) the certificates representing that number of shares of NPS Buyer Class A Common Stock subject which the holder of one share of Company Common Stock would have the right to each such NPS Option; 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, plus (ivC) Warrants in an amount issued to the holder of one share of Company Common Stock pursuant to Section 3.5, plus (D) the exercise price right to receive the Contingent Additional Consideration that may be payable to the holder of each 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 NPS Option; 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 deducted from the amounts payable under clause (vA) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as above or by payment of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way cash by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(bOption holder if amounts payable under clause (A) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)are insufficient.

Stock Options. As Section 2.5.1 Prior to the Effective Time, the Board of Directors of the close of business on February 13Company (the “Company Board”) (or, 2003: (iif appropriate, any committee thereof) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS shall adopt appropriate resolutions and take all other actions necessary and appropriate to provide that each unexpired and unexercised option or similar right to purchase Company Common Stock are (the “Company Options”), under the Company’s Omnibus Stock Option and Award Plan, as amended, and the Company’s Equity Compensation Plan (the “Company Stock Option Plans”), that is vested and exercisable as of the Effective Time (the “Vested Company Options”), shall be cancelled effective as of immediately after the Effective Time, and, in exchange therefor, each former holder of any such cancelled Vested Company Option shall be entitled to receive from Parent as soon as reasonably practicable following the Closing Date, in consideration of the cancellation of such Vested Company Option and in settlement therefor, an amount in cash (without interest and subject to issuance pursuant any applicable withholding or other taxes required by applicable Law to outstanding NPS Options, (iibe withheld) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant equal to the NPS Option Plans, and product of (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (iA) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the total number of shares of NPS Company Common Stock previously subject to each such NPS Option; Vested Company Option and (ivB) the excess, if any, of the Common Per Share Price over the exercise price per share of each Company Common Stock previously subject to such NPS OptionVested Company Option (such amounts payable hereunder being referred to as the “Option Payment”); provided, however, that Parent shall deliver to the Escrow Agent on behalf and in the name of such holder (v1) an amount in cash representing the date on which each Option Pro Rata Share of the Indemnification Escrow Amount such NPS Option was granted; (vi) holder has the extent right to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires receive and (viii2) whether an amount in cash representing the exercisability Option Pro Rata Share of each the Adjustment Escrow Amount such NPS holder has the right to receive. Immediately after the Effective Time, any such cancelled Vested Company Option will shall no longer be accelerated in any way exercisable by the transactions contemplated by this Agreementformer holder thereof, but shall only entitle such holder to the payment of the Option Payment, and indicates the extent Company will use its reasonable best efforts to obtain all necessary consents to ensure that former holders of any such acceleration. Section 3.2(b) of Vested Company Options will have no rights other than the NPS Disclosure Letter also contains a complete and accurate description of right to receive the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Payment.

Stock Options. As (a) Neither Parent nor Merger Sub shall assume any Company Options in connection with the Merger. Not later than five (5) business days prior to the scheduled or anticipated Closing Date, the Company shall send a notice (the “Option Termination Letter”) to all holders of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Company Options, which notice shall notify such holders that (iiw) no shares Parent and the Merger Sub will not be assuming any Company Options following the Effective Time or substituting new options therefor, (x) that all outstanding Unvested Company Options shall become vested and fully exercisable as of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant and effective immediately prior to the NPS Effective Time, (y) that each Company Option Planswith an exercise price per share that is less than the Per Share Merger Consideration that is not exercised prior to the Effective Time will be cancelled and the holder of each such unexercised Company Option will be paid the Options Payout Amount (as defined below), if any, in the manner set forth in this Section 1.6(a), and (iiiz) thirty eight thousand seven hundred twenty five (38,725) shares that each Company Option with an exercise price per share that is equal to or greater than the Per Share Merger Consideration shall be canceled at the Effective Time without payment of NPS Common Stock are reserved for future issuance under the NPS ESPPany consideration therefor. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on Upon the terms and subject to the conditions specified set forth in this Agreement, at the instruments pursuant to which they are issuableEffective Time, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS each Company Option as a result of the Mergers (whether alone vested or upon unvested) with an exercise price per share that is less than the occurrence of any additional or subsequent events). There are no Per Share Merger Consideration that is outstanding or authorized stock appreciationand unexercised immediately prior to the Effective Time, phantom stockshall be canceled at the Effective Time and the holder thereof, profit participation or other similar rights with respect subject to NPS. Section 3.2(b) of the NPS Disclosure Letter contains Sections 1.9, 1.10 and 1.11, shall be entitled to receive, a complete and accurate list of the following information with respect cash payment in an amount, if any, equal to each NPS Option outstanding as of February 13, 2003: (i) the name aggregate number of shares of Company Common Stock issuable upon the optionee in respect exercise of each such NPS Option; Company Option immediately prior to the Effective Time, multiplied by (ii) the particular plan pursuant to amount, if any, by which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) Per Share Merger Consideration exceeds the exercise price per share of each such NPS Option; Company Option (vit being understood and agreed that such exercise price shall not actually be paid to the Company by the holder thereof) (the date on which each such NPS Option was granted; (vi“Options Payout Amount”). The right of any holder of Company Options to receive the Options Payout Amount pursuant to this Section 1.6(a) shall be subject to and reduced by the amount of any withholding that is required under applicable Law. To the extent that such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to which the person to whom such amounts would otherwise have been paid. Notwithstanding the foregoing, each such NPS Company Option with an exercise price per share that is vested and unvested as of a recent practicable date; (vii) equal to or greater than the date on which each such NPS Option expires and (viii) whether Per Share Merger Consideration shall, at the exercisability of each such NPS Option will Effective Time, be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent canceled without payment of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)consideration therefor.

Stock Options. As The Employee shall participate in any long-term equity ------------- incentive program of the close Company or the Bank and shall be eligible for the grant of business stock options, restricted stock, and other awards thereunder or under any similar plan adopted by the Company. On the date of the closing of the stock offering for the initial capitalization of the Bank, or as soon thereafter as an appropriate stock option plan is adopted by the Board, the Company shall grant to Employee an option to purchase a number of shares of Common Stock equal to three percent (3%) of the number of shares sold in the offering. The award agreement for the stock option shall provide for an exercise price per share equal to the price per share of stock sold in the stock offering for the initial capitalization of the Bank, and shall also provide that one-third of the total number of shares under the option award shall vest and become exercisable on February 13each of the first, 2003second and third anniversaries of the Opening Date, subject to accelerated vesting of all options upon a "Change in Control" as defined below. In addition, the award agreement will provide that the Employee's option shall be qualified as an incentive stock option under the Internal Revenue Code of 1986, as amended (the "Code") to the extent the option otherwise qualifies for such treatment under the Code. For purposes of such option vesting, the term "Change in Control" shall mean that any of the following events shall have occurred: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Optionsa person, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding optionspartnership, rights joint venture, corporation or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plansentity, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements two or more of any character to which NPS is bound obligating NPS to accelerate of the vesting of any NPS Option foregoing acting as a result group (or a "person" within the meaning of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b13(d)(3) of the NPS Disclosure Letter contains Securities Exchange Act of 1934, as amended (the "1934 Act"), other than the Company, a complete and accurate list majority-owned subsidiary of the following information with respect to each NPS Option outstanding as of February 13Company, 2003: an employee benefit plan (ior related trust) the name of the optionee Company or such subsidiary, become(s) after the effective date of the stock option plan the "beneficial owner" (as defined in respect Rule 13(d)(3) under the 0000 Xxx) of each such NPS Option35% or more of the then outstanding voting stock of the Company; (ii) during any period of two consecutive years, individuals who at the particular plan pursuant beginning of such period constitute the Board of Directors of the Company (together with any new director whose election by the Board or whose nomination for election by the Company's shareholders, was approved by the vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to which each such NPS Option was grantedconstitute a majority of the directors then in office; (iii) the number shareholders of shares the Company approve (A) a plan of NPS Common Stock subject complete liquidation of the Company; or (B) an agreement for the sale or disposition of all or substantially all of the Company's assets (other than to each a subsidiary of the Company); or (C) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least sixty percent (60%) of the combined voting power of the voting securities of the Company (or such NPS Optionsurviving entity) outstanding immediately after such merger, consolidation or reorganization; or (iv) a notice of an application is filed with the exercise price Office of each such NPS Option; Comptroller of the Currency (vthe "OCC") or the date on which each such NPS Option was granted; Federal Reserve Board or any other bank or thrift regulatory approval (vior notice of no disapproval) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way granted by the transactions contemplated by this AgreementFederal Reserve, and indicates the extent of OCC, the Federal Deposit Insurance Corporation, or any such acceleration. Section 3.2(b) other regulatory authority for permission to acquire control of the NPS Disclosure Letter also contains a complete and accurate description Company or any of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)its banking subsidiaries.

Stock Options. As All options (the “Stock Options”) to acquire Common Shares outstanding immediately prior to the Effective Time under any stock option or similar plan or agreement of the close Company (such stock option or similar plans or agreements being collectively referred to herein as the “Stock Plans”), whether or not then exercisable, shall (by all necessary and appropriate action which shall be taken by the Board of business on February 13, 2003: Directors of the Company or such appropriate committee or committees thereof) be canceled at the Effective Time and (i) three million ninety one thousand three hundred sixty nine Purchaser shall use commercially reasonable efforts so that each holder of a Stock Option shall at the Effective Time, but in any event not more than two business days after the Effective Time, receive from the Surviving Corporation (3,091,369) shares of NPS and if necessary Purchaser will provide funds to the Surviving Corporation so that it is able to make such payment), for each Common Stock are Share subject to issuance pursuant a Stock Option, an amount in cash equal to outstanding NPS Optionsthe excess, if any, of the Merger Consideration over the per share exercise price of such Stock Option, without interest, in full settlement of the Company’s (and the Surviving Corporation’s) obligations under each such Stock Option, or (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under extent that the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements per share exercise price of any character Stock Option equals or exceeds the Merger Consideration, at the Effective Time such Stock Option shall be canceled and the holder of such Stock Option shall not receive or be entitled to which NPS is bound obligating NPS receive any consideration from Purchaser, Merger Sub or the Surviving Corporation in respect of such Stock Option. The Company shall deliver to accelerate the vesting of any NPS Option as Purchaser a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as holders of February 13Stock Options, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) indicating the number of shares Stock Options held by each holder of NPS Common Stock Options and the exercise price, expiration date and exerciseability of such Stock Options, at least ten days prior to the Closing Date. Notwithstanding the foregoing, the amounts payable pursuant to this Section 1.4 shall be subject to each such NPS Option; (iv) all applicable withholding taxes. The Company shall use commercially reasonable efforts to approve the exercise price disposition of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) Stock Options in accordance with the foregoing to the extent necessary to which each exempt such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) dispositions under Rule 16b-3 of the NPS Disclosure Letter also contains a complete and accurate description Securities Exchange Act of 1934 (the vesting schedule generally applicable to NPS Options, and “Exchange Act”). The term Stock Options shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)not include the LFSRI Warrant.

Stock Options. As At the Effective Time of the close Merger, each outstanding option to purchase Company Common Stock (each, a "Company Stock Option"), whether or not granted under the Company Option Plan, whether or not vested, shall by virtue of business the Merger be assumed by Parent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options immediately prior to the Effective Time of the Merger (including, without limitation, any repurchase rights or vesting provisions and provisions regarding the acceleration of vesting on February 13certain transactions), 2003: except that (i) three million ninety one thousand three hundred sixty nine each Company Stock Option will be exercisable (3,091,369or will become exercisable in accordance with its terms) for that number of whole shares of NPS Parent Common Stock are subject equal to issuance pursuant the product of the number of Company Shares that were issuable upon exercise of such Company Stock Option immediately prior to outstanding NPS Optionsthe Effective Time of the Merger multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock if the said product is equal to or less than the fraction of one-half (.5) of one Parent Common Stock or rounded up to the nearest whole number of shares of Parent Common Stock if the said product is greater than the fraction of one-half (.5) of one Parent Common Stock, and (ii) no the per share exercise price for the shares of NPS Parent Common Stock are issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per Company Share at which such Company Stock Option was exercisable immediately prior to the Effective Time of the Merger by the Exchange Ratio, rounded up to the nearest whole cent. Parent shall comply with the terms of all such Company Stock Options and use its best efforts to ensure, to the extent required by, and subject to the provisions of, the Company Option Plan and permitted under the Code or other relevant laws and regulations that any Company Stock Option that qualified for tax treatment under Section 424(b) of the Code prior to the Effective Time of the Merger continue to so qualify after the Effective Time of the Merger. Parent shall take all corporate actions necessary to reserve for issuance pursuant to outstanding options, rights or warrants to purchase NPS a sufficient number of shares of Parent Common Stock issued other than pursuant for delivery upon exercise of all Company Stock Options on the terms set forth in this Section 2.03(b). Parent will use its reasonable efforts to promptly file, a registration statement on Form S-8, to the NPS Option Plansextent available, and (iii) thirty eight thousand seven hundred twenty five (38,725) so as to register the shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms assumed Company Option Plan and conditions specified in shall use its best efforts to effect such registration and to maintain the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements effectiveness of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option such registration statement for so long as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Company Stock Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Common Stock subject to each such NPS Option; (iv) the exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)remains outstanding.

Stock Options. As of the close of business on February 13, 2003: (ia) three million ninety one thousand three hundred sixty nine (3,091,369Except as provided in Section 7.03(b) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under c), at the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaidEffective Time, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information Company's obligations with respect to each NPS Option outstanding as Option, whether vested or unvested, shall, by virtue of February 13this Agreement and without any further action of the Company, 2003: Parent, Purchaser or the holder of any Option, be assumed by Parent. Parent shall make such assumption in such manner that (i) Parent is a corporation "assuming a stock option in a transaction to which Section 424(a) applies" within the name meaning of Section 424 of the optionee in respect of each such NPS Option; Code or (ii) to the particular plan pursuant extent that Section 424 of the Code does not apply to such Option, Parent would be such a corporation were Section 424 of the Code applicable to such Option; and, 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 as issuer and the Company as the employer of the holders of Options, as applicable, which each 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 NPS Option was granted; will be exercisable for that number of Parent American Depositary Shares (iii"ADSs") equal to the product of the number of shares of NPS Company Common Stock subject that were purchasable under such Option immediately prior to each the Effective Time multiplied by the quotient determined by dividing the Merger Consideration by the fair market value of the ADSs, rounded down to the nearest whole number of ADSs and (ii) the per share exercise price for the ADSs issuable upon exercise of such NPS Option; (iv) assumed Option will be equal to the exercise price per share of each Company Common Stock at which such NPS Option; Option was exercisable immediately prior to the Effective Time multiplied by the quotient determined by dividing fair market value of the ADSs by the Merger Consideration, and rounding the resulting exercise price up to the nearest whole cent. For purposes of this Section 7.03, the fair market value of the ADSs is based on the average of the closing prices per share for the five (v5) trading days immediately following (but not including) the date on which each such NPS Option was granted; (vi) the extent to which each such NPS Option is vested and unvested Effective Time occurs, as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated reported in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)The Wall Street Journal.

Stock Options. As of (a) At the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS each outstanding option to purchase Drilex Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than that has been granted pursuant to the NPS Drilex Stock Plan ("Drilex Stock Option") shall be treated as set forth in this Section 5.10. Drilex shall not grant any stock appreciation rights or limited stock appreciation rights and shall not permit cash payments to holders of Drilex Stock Options in lieu of the treatment thereof as provided in this Section 5.10. (b) The portion, if any, of each Drilex Stock Option Plansthat is exercisable as of the Effective Time in accordance with the terms thereof shall be assumed by Bakex Xxxhxx. Xx so assumed, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject such option shall be deemed to issuance as aforesaidconstitute an option to acquire, upon issuance on the same terms and conditions specified in the instruments pursuant as were applicable under such Drilex Stock Option, a number of shares of Bakex Xxxhxx Xxxmon Stock equal to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Drilex Common Stock purchasable pursuant to such exercisable portion of such Drilex Stock Option multiplied by the Exchange Ratio, at a price per share equal to the per-share exercise price for the shares of Drilex Common Stock purchasable pursuant to such Drilex Stock Option divided by the Exchange Ratio; 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 422-424 of the Code, the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424(a) of the Code; and provided further, that the number of shares of Bakex Xxxhxx Xxxmon Stock that may be purchased upon exercise of such Drilex Stock Option shall not include any fractional share and, upon exercise of such Drilex Stock Option, a cash payment shall be made for any fractional share based upon the closing price of a share of Bakex Xxxhxx Xxxmon Stock on the NYSE on the 27 34 last trading day of the calendar month immediately preceding the date of exercise. After the Effective Time, except as provided above in this Section 5.10(b), each assumed option shall be exercisable upon the same terms and conditions as were applicable to the related Drilex Stock Option immediately prior to the Effective Time. (c) Drilex shall take all reasonable action as may be required such that the portion, if any, of each Drilex Stock Option that is not exercisable as of the Effective Time (an "Unexercisable Option") shall be canceled in exchange for the number of shares of Bakex Xxxhxx Xxxmon Stock, decreased to the nearest whole share, having an aggregate market value at the Effective Time (based on the Average Closing Price) equal to the number of shares of Drilex Common Stock subject to each such NPS Option; (iv) Unexercisable Option multiplied by the excess, if any, of the Drilex Value over the per-share exercise price of each such NPS Option; (v) the date on which each such NPS Option was granted; (vi) thereof. To the extent the terms of an Unexercisable Option allow for withholding to which each satisfy tax obligations, such NPS Option is vested and unvested as of a recent practicable date; (vii) rights shall apply to the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated consideration provided for by this Agreement, and indicates the extent Section 5.10(c). (d) Bakex Xxxhxx xxxll take all corporate action necessary to reserve for issuance a sufficient number of any such acceleration. Section 3.2(b) shares of Bakex Xxxhxx Xxxmon Stock for delivery upon exercise of the NPS Disclosure Letter also contains Drilex Stock Options assumed in accordance with this Section 5.10. As soon as practicable after the Effective Time, Bakex Xxxhxx xxxll file with the SEC a complete registration statement on Form S-8 (or any successor form) or another appropriate form with respect to the shares of Bakex Xxxhxx Xxxmon Stock subject to the Drilex Stock Options and accurate description shall use its best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule).prospectus or prospectuses contained therein) for so long as Drilex Stock Options remain outstanding. 5.11

Stock Options. As The Merger Agreement provides that as soon as practicable following the date of the close Merger Agreement but in no event later than the consummation of business on February 13the Offer, 2003the Company (or, if appropriate, the Board or any committee administering the Stock Option Plans) shall (including by adopting resolutions or taking any other actions) take action so as to allow that each outstanding option to purchase Shares (a 'Company Stock Option') granted under any stock option, stock appreciation rights or stock purchase plan, or other right, program, arrangement or agreement of the Company (collectively, the 'Stock Option Plans') and each outstanding warrant to purchase Shares (a 'Warrant') in each case outstanding immediately prior to the date of the Merger Agreement: (iA) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plansextent then exercisable, and either (iii1) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result cancelled immediately after consummation of the Mergers Offer in exchange for an amount in cash, payable at the time of such cancellation, equal to the product of (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iiix) the number of shares of NPS Common Stock Shares subject to each such NPS Option; Company Stock Option or Warrant immediately prior to the Effective Time and (ivy) the excess, if any, of the price per Share to be paid in the Offer over the per Share exercise price of each such NPS OptionCompany Stock Option or Warrant (the 'Net Amount') or (2) to be converted immediately prior to the Effective Time into the right solely to receive the Net Amount; provided, however, that no such cash payment has been made or (vB) the date on which each such NPS Option was granted; (vi) to the extent not then exercisable, to which each such NPS be canceled immediately after consummation of the Offer. The Company shall not make, or agree to make, any payment of any kind to any holder of a Company Stock Option is vested or a Warrant (except for the payment described above) without the consent of Parent. The Merger Agreement provides further that subject to the provisions set forth above, all Stock Option Plans and unvested the Employee Stock Purchase Plan shall terminate as of a recent practicable date; (vii) the date on which each such NPS Option expires Effective Time and (viii) whether the exercisability of each such NPS Option will be accelerated provisions in any way by other benefit plan providing for the transactions contemplated by this Agreementissuance, transfer or grant of any capital stock of the Company or any interest in respect of any capital stock of the Company shall be terminated as of the Effective Time. The Merger Agreement provides that the Company shall ensure that following the Effective Time, no holder of a Company Stock Option or Warrant nor any participant in any Stock Option Plan or the Employee Stock Purchase Plan shall have any right thereunder to acquire any capital stock of the Company, Parent or the Surviving Corporation, and indicates that the extent Company shall use its reasonable best efforts to ensure that following the Effective Time, no holder of any such accelerationremaining Company Stock Option or Warrant nor any participant in any Stock Option Plan shall have any right thereunder to acquire any capital stock of the Company, Parent or the Surviving Corporation. Section 3.2(bThe Merger Agreement also provides that the Surviving Corporation shall continue to be obligated to pay the Net Amount to holders of any Company Stock Options or Warrants converted in accordance with clause (y) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)immediately preceding paragraph.

Stock Options. As of (a) At the close of business on February 13Effective Time, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to each outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants option to purchase NPS Common Shares (each “Company Stock Option” and, collectively, “Company Stock Options”) issued other than pursuant to the NPS Company’s 1998 Stock Option PlansPlan or any other agreement or arrangement, and (iii) thirty eight thousand seven hundred twenty five (38,725) whether vested or unvested, shall be converted as of the Effective Time into options to purchase shares of NPS Parent Common Stock are reserved for future issuance under the NPS ESPPin accordance with this Section 2.11. All shares of NPS Common plans or agreements described above pursuant to which any Company Stock subject Option has been issued or may be issued are referred to issuance collectively as aforesaidthe “Company Plans.” At the Effective Time, upon issuance each Company Stock Option shall be deemed to constitute an option to acquire, on the same terms and conditions specified (but taking into account any changes thereto, including any acceleration in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments vesting or agreements exercisability of any character to which NPS is bound obligating NPS to accelerate such option by reason of this Agreement or the vesting of any NPS Option as a result of Merger or the Mergers (whether alone transactions or upon matters contemplated by this Agreement provided for in such option or the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights applicable plan with respect thereto) as were applicable to NPS. Section 3.2(b) such Company Stock Option, a number of the NPS Disclosure Letter contains a complete and accurate list shares of the following information with respect Parent Common Stock equal to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each such NPS Option; (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares of NPS Company Common Stock subject to each such NPS Option; Company Stock 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 Parent Common Stock equal to (ivi) the per share exercise price for the shares of each Company Common Stock otherwise purchasable pursuant to such NPS Option; Company Stock Option divided by (vii) the date on which each such NPS Option was grantedExchange Ratio, rounded up to the nearest cent; (vi) provided, however, that in the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent 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 Code (“incentive stock options” or “ISOs”), Parent may cause the option price, the number of shares purchasable pursuant to such acceleration. option and the terms and conditions of exercise of such option to be determined so as to comply with Section 3.2(b424(a) of the NPS Disclosure Letter also contains Code. Notwithstanding anything herein to the contrary, each Company Stock Option issued to a complete and accurate description non-employee director of the vesting schedule generally applicable Company shall automatically be deemed amended so that such non-employee director shall be entitled to NPS Options, and shall specifically identify each NPS exercise such Company Stock Option with for a vesting schedule that is different than such generally applicable vesting schedule (including a description period of each such different vesting schedule)at least 90 days after the Effective Time.

Stock Options. As At the Effective Time, the outstanding options to ------------- purchase an aggregate of 1,358,595 shares of Company Common Stock (each a "Stock Option") granted under the Company's 1995 Stock Option Plan and 1996 Non- Employee Director Plan (the "Company Stock Option Plans"), whether vested or unvested, shall , by virtue of the close Merger and without any further action on the part of business the Company or the holder, be deemed assumed by the Parent and deemed to constitute an option to acquire, on February 13the same terms and conditions as were applicable under such Stock Option prior to the Effective Time (including terms and conditions relating to such Stock Option's term, 2003: exercisability, vesting schedule and status as an "incentive stock option" under Section 422 of the Code), the number (irounded down to the nearest whole number) three million ninety one thousand three hundred sixty nine (3,091,369) of shares of NPS Parent Common Stock are subject equal to issuance pursuant to outstanding NPS Options, (ii) no the aggregate of that number of shares of NPS Parent Common Stock are subject (based on the Exchange Ratio) as the holder of such Stock Option would have been entitled to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than receive pursuant to the NPS Merger had such holder exercised such Option Plans, and in full immediately prior to the Effective Time (iiinot taking into account whether or not such Option was in fact exercisable). The exercise price for such Stock Options shall be the price per share equal to (x) thirty eight thousand seven hundred twenty five (38,725) shares of NPS the aggregate exercise price for Company Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments purchasable pursuant to which they are issuablesuch Stock Option, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee in respect of each if such NPS Option; (ii) the particular plan pursuant to which each such NPS Stock Option was granted; exercised in full, divided by (iiiy) the number of shares of NPS Parent Common Stock subject deemed purchasable pursuant to each such NPS Option; Stock Option (iv) the exercise price per share, so determined, being rounded up to the nearest full cent). No payment shall be made for fractional shares. The aggregate number of each such NPS Option; (vshares of Parent Common Stock issuable upon the exercise of Options assumed by Parent pursuant to this Section 2.2(c) shall be referred to in this Agreement as the date on which each such NPS "Option was granted; (viShares." Any adjustment to an incentive stock option made under this Section 2.2(c) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of any such acceleration. shall comply with Section 3.2(b424(a) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable to NPS Options, and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description of each such different vesting schedule)Code.

Stock Options. As of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS OptionsAt the Effective Time, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding optionsexcept as set forth in Section 1.08(c)(ii), rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option Plans, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which NPS is bound obligating NPS to accelerate the vesting of any NPS Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized each stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: (i) the name of the optionee option in respect of shares of HTLF Common Stock granted under the HTLF Stock Plan (each such NPS stock option, a “HTLF Option; ” and, collectively with the HTLF RSU Awards and the HTLF PSU Awards, the “HTLF Equity Awards”) that is outstanding immediately prior to the Effective Time, by virtue of the Merger and without any required action on the part of HTLF or any holder of such HTLF Option, shall be assumed by UMB and shall be converted into a stock option (iieach, an “Assumed Option” and, together with the Assumed RSU Awards and the Assumed PSU Awards, “Assumed Equity Awards”) that (x) is exercisable for (subject to achievement of the particular plan pursuant applicable time-based vesting conditions) a number of shares of UMB Common Stock equal to which each such NPS Option was granted; (iii) the number of shares of NPS HTLF Common Stock subject underlying the HTLF Option immediately prior to each such NPS Option; the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole share and (ivy) has an exercise price per share of UMB Common Stock equal to the exercise price of each such NPS Option; (v) applicable to the date on which each such NPS underlying HTLF Option was granted; (vi) the extent to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way divided by the transactions contemplated by this AgreementExchange Ratio, and indicates rounded up to the extent of any such accelerationnearest cent. Section 3.2(b) of the NPS Disclosure Letter also contains a complete and accurate description of the vesting schedule generally applicable Each Assumed Option shall continue to NPS Optionshave, and shall specifically identify each NPS be subject to, the same terms and conditions as applied to the corresponding HTLF Option with a vesting schedule that is different than such generally applicable vesting schedule immediately prior to the Effective Time (including the requirement to perform continued services to satisfy applicable time-based vesting conditions, subject to any accelerated vesting on a description Qualified Termination of each such different vesting schedulethe holder’s employment following the Mergers). The assumption of HTLF Options pursuant to this Section 1.08(c) shall be effected in a manner that satisfies the requirements of Section 409A of the Code and this Section 1.08(c) will be construed with this intent.

Stock Options. As (a) Immediately prior to the Effective Time, each outstanding employee or director stock option (an "Option") to purchase Shares granted under the 1983 Incentive Stock Option Plan, the 1993 Incentive Stock Option Plan, the 1993 Non-Employee Directors Stock Option Plan or the 1996 Non-Employee Directors Stock Option Plan (collectively, the "Option Plans") or any other compensation plan or arrangement of the close of business on February 13, 2003: (i) three million ninety one thousand three hundred sixty nine (3,091,369) shares of NPS Common Stock are subject to issuance pursuant to outstanding NPS Options, (ii) no shares of NPS Common Stock are subject to issuance pursuant to outstanding options, rights or warrants to purchase NPS Common Stock issued other than pursuant to the NPS Option PlansCompany shall be canceled, and (iii) thirty eight thousand seven hundred twenty five (38,725) shares of NPS Common Stock are reserved for future issuance under the NPS ESPP. All shares of NPS Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements each holder of any character to which NPS is bound obligating NPS to accelerate such Option, whether or not then vested or exercisable, shall be paid by the vesting of any NPS Company at the Effective Time for each such Option as a result of the Mergers (whether alone or upon the occurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to NPS. Section 3.2(b) of the NPS Disclosure Letter contains a complete and accurate list of the following information with respect to each NPS Option outstanding as of February 13, 2003: an amount determined by multiplying (i) the name excess, if any, of the optionee in respect Merger Consideration over the applicable exercise price of each such NPS Option; Option by (ii) the particular plan pursuant to which each such NPS Option was granted; (iii) the number of shares Shares such holder could have purchased (assuming full vesting of NPS Common Stock subject all Options) had such holder exercised such Option in full immediately prior to each such NPS Option; the Effective Time. (ivb) Prior to the exercise price Effective Time, the Company shall use its best efforts (i) to obtain any consents from holders of each such NPS Option; Options and (vii) make any amendments to the date on which each such NPS terms of the Option was granted; (vi) Plans or compensation plans or arrangements, to the extent such consents or amendments are necessary to which each such NPS Option is vested and unvested as of a recent practicable date; (vii) the date on which each such NPS Option expires and (viii) whether the exercisability of each such NPS Option will be accelerated in any way by give effect to the transactions contemplated by Section 2.5(a). Notwithstanding any other provision of this AgreementSection 2.5, and indicates the extent payment may be withheld in respect of any such accelerationOption until necessary consents are obtained. Section 3.2(b(c) The Company shall promptly amend the 1994 Employee Stock Purchase Plan to provide for (i) the suspension of participation during any offering periods commencing subsequent to the date of this agreement for the pendency of the NPS Disclosure Letter also contains a complete Merger and accurate description subject to the successful consummation of the vesting schedule generally applicable to NPS Options, Merger and shall specifically identify each NPS Option with a vesting schedule that is different than such generally applicable vesting schedule (including a description ii) the termination of each such different vesting schedule).the 1994 Employee Stock Purchase Plan as of the Effective Time. SECTION 2.6