Common use of Assumption of Stock Options Clause in Contracts

Assumption of Stock Options. Subject to applicable Law, Parent and the Company shall take such actions, including (with respect to the Company) any necessary amendment of the Stock Options and the Company Option Plans to permit Parent to assume, and Parent shall assume, at the Effective Time, each Company Option Plan and each of the Assumed Options and substitute shares of Parent Common Stock for the Company Common Stock purchasable under each such assumed Stock Option, which assumption and substitution shall be effected as follows (such actions by the Company shall be done in accordance with the Company Option Plans and stock option agreements under which the grants have been made, including but not limited to the authorization in Sections 9 thereof (and in compliance in all respects with Sections 7 thereof) and the Company shall obtain any other documentation from any holder of the option required as a result of the Assumed Option under the Company Option Plans and stock option agreements under which such grants have been made): (a) the number of shares of Parent Common Stock purchasable under the Assumed Option shall be equal to 0.386 (the “Conversion Fraction”) times the number of shares of Company Common Stock underlying the Assumed Option (with any fractional amount rounded to the next lowest full share); (b) the per share exercise price of such Assumed Option shall be an amount (with fractional amounts rounded to the next highest cent) equal to the per share exercise price of the Stock Option being assumed divided by the Conversion Fraction; and (c) any other provisions of each Assumed Option shall remain in effect (including acceleration of exercisability resulting from applicable employment or retention agreements); provided, that in the event of any recapitalization, stock split, split-up, combination, exchange of shares or other reclassification in respect of Parent’s outstanding shares of capital stock following the date hereof, there shall be an equitable adjustment with respect hereto.

Assumption of Stock Options. (a) Subject to applicable LawSections 5.4(b), Parent and at the Company shall take such actions, including (Offer Acceptance Time all rights with respect to the Company) any necessary amendment of the Company Common Stock Options and the under each Company Option Plans then outstanding shall be converted into and become rights with respect to permit Parent to assumeCommon Stock, and Parent shall assume, at assume each such Company Option in accordance with the Effective terms and conditions (as in effect as of the date of this Agreement) of the stock option plan under which it was issued and the terms and conditions of the stock option agreement by which it is evidenced. From and after the Offer Acceptance Time, subject to Section 5.4(f), (i) each Company Option Plan and each of the Assumed Options and substitute assumed by Parent may be exercised solely for shares of Parent Common Stock for the Company Common Stock purchasable under each such assumed Stock OptionStock, which assumption and substitution shall be effected as follows (such actions by the Company shall be done in accordance with the Company Option Plans and stock option agreements under which the grants have been made, including but not limited to the authorization in Sections 9 thereof (and in compliance in all respects with Sections 7 thereof) and the Company shall obtain any other documentation from any holder of the option required as a result of the Assumed Option under the Company Option Plans and stock option agreements under which such grants have been made): (aii) the number of shares of Parent Common Stock purchasable under the Assumed subject to each such Company Option shall be equal to 0.386 (the “Conversion Fraction”) times the number of shares of Company Common Stock underlying the Assumed subject to such Company Option (with any fractional amount rounded immediately prior to the next lowest full Offer Acceptance Time multiplied by the Exchange Ratio, rounding down to the nearest whole share); , (biii) the per share exercise price of under each such Assumed Company Option shall be an amount (with fractional amounts rounded to the next highest cent) equal to adjusted by dividing the per share exercise price of the Stock under such Company Option being assumed divided by the Conversion Fraction; and Exchange Ratio and rounding up to the nearest cent, and (civ) any restriction on the exercise of any such Company Option shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of each Assumed such Company Option shall otherwise remain in effect (including acceleration of exercisability resulting from applicable employment or retention agreements)unchanged; providedPROVIDED, HOWEVER, that each Company Option assumed by Parent in the event of accordance with this Section 5.4(a) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any recapitalization, stock split, stock dividend, reverse stock split-up, combinationreclassification, exchange of shares recapitalization or other reclassification similar transaction effected subsequent to the Offer Acceptance Time. (b) Notwithstanding anything to the contrary contained in respect this Section 5.4, in lieu of Parent’s assuming outstanding shares Company Options in accordance with Section 5.4(a), Parent may, with the consent of capital stock following the date hereof, there shall be an equitable adjustment each optionholder with respect heretoto such optionholders options, cause such outstanding Company Options to be replaced by issuing reasonably equivalent replacement stock options in substitution therefor.

Assumption of Stock Options. Subject (i) At the Effective Time, each outstanding option to purchase Company Common Stock (a "Stock Option") granted under the Company's 1987 Stock Option Plan and 1990 Stock Option Plan, each as amended to date (collectively, the "Company Stock Option Plans"), whether vested or unvested, shall be assumed by Parent and constitute an option to acquire, on the same terms and conditions as were applicable Lawunder such Stock Option prior to the Effective Time, the number (rounded up to the nearest whole number) of Parent Shares as the holder of such Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such Stock Option in full immediately prior to the Effective Time (not taking into account whether or not such Stock Option was in fact exercisable), at a price per share equal to (x) the aggregate exercise price for Company Common Stock otherwise purchasable pursuant to such Stock Option divided by (y) the number of Parent Shares deemed purchasable pursuant to such Stock Option. At and after the Effective Time, Parent and the Company shall take such actions, including (will honor all obligations with respect to such Stock Options under the Company) any necessary amendment terms of the such Stock Options and the Company Stock Option Plans to permit Parent to assume, and Parent shall assume, at as in effect on the date hereof. At the Effective Time, each the Company Stock Option Plan and each of Plans shall be amended to require that the Assumed Options and substitute shares of Parent Common Stock for stock issuable and deliverable upon the Company Common Stock purchasable under each such assumed exercise of a Stock Option, which assumption and substitution or any portion thereof, shall be effected as follows (such actions unissued shares or issued shares which then have been reacquired by the Company Parent, but no other amendments shall be done made except as provided herein. (ii) As soon as practicable after the Effective Time (but in accordance with the Company Option Plans and stock option agreements under which the grants have been madeany event within five (5) business days), including but not limited Parent shall deliver to the authorization in Sections 9 thereof (and in compliance in all respects with Sections 7 thereof) and the Company shall obtain any other documentation from any each holder of the option required as a result of the Assumed Option under the Company Option Plans and stock option agreements under which such grants have been made): (a) the number of shares of Parent Common an outstanding Stock purchasable under the Assumed Option shall be equal to 0.386 (the “Conversion Fraction”) times the number of shares of Company Common Stock underlying the Assumed Option (with any fractional amount rounded to the next lowest full share); (b) the per share exercise price of such Assumed Option shall be an amount (with fractional amounts rounded to the next highest cent) equal to the per share exercise price of the Stock Option being assumed divided by the Conversion Fraction; and (c) any other provisions of each Assumed Option shall remain in effect (including acceleration of exercisability resulting from applicable employment or retention agreements); provided, that in the event of any recapitalization, stock split, split-up, combination, exchange of shares or other reclassification in respect of Parent’s outstanding shares of capital stock following the date hereof, there shall be an equitable adjustment with respect hereto.Option

Assumption of Stock Options. Subject to applicable Law, Parent and the Company shall take such actions, including (with respect to the Company) any necessary amendment of the Stock Options and the Company Option Plans to permit Parent to assume, and Parent shall assume, at At the Effective Time, each Company Option Plan and Parent shall assume each of the Assumed Options and substitute shares of Parent options to purchase NextPoint Common Stock for identified on Attachment 3.2(a) to the Company Common Stock purchasable under Diclosure Schedule (the "STOCK OPTIONS") and each such assumed Stock Optionholder thereof (each an "OPTION HOLDER") shall thereby be entitled to acquire, which assumption by virtue of the Merger and substitution shall without any action on the part of the Option Holder, on substantially the same terms and subject to the same conditions, except as may be effected as follows (such actions by the Company shall be done provided in accordance any agreement with the Company Option Plans and stock option agreements under which the grants have been madeHolder, including but not limited to the authorization in Sections 9 thereof (and in compliance in all respects with Sections 7 thereof) and the Company shall obtain any other documentation from any holder of the option required as a result of the Assumed Option under the Company Option Plans and stock option agreements under which such grants have been made): (a) the number of shares of Parent Common Stock purchasable under the Assumed Option shall be equal to 0.386 determined by MULTIPLYING (the “Conversion Fraction”i) times the number of shares of Company NextPoint Common Stock underlying the Assumed for which such Stock Option (is then exercisable in accordance with any fractional amount rounded its terms immediately prior to the next lowest full Effective Time by (ii) the quotient of the Participation Amount DIVIDED BY the Average Price (rounded down to the nearest whole share); (b) the , at an exercise or conversion price per share of Parent Common Stock (rounded up to the nearest whole cent) determined by DIVIDING the exercise price per share of NextPoint Common Stock of such Assumed Stock Option shall be an amount (with fractional amounts rounded immediately prior to the next highest cent) equal Effective Time by the quotient of the Participation Amount DIVIDED BY the Average Price. It is the intention of the parties that the Stock Options assumed by Parent qualify following the Effective Time as "incentive stock options" under Section 422 of the Code to the per share exercise price extent the Stock Options qualified as incentive stock options immediately prior to the Effective Time. Except as specifically contemplated by this Agreement or the Transaction Documents, the term, exercisability, vesting schedule, and all of the other terms of the Stock Option being assumed divided by the Conversion Fraction; and (c) any other provisions of each Assumed Option Options shall otherwise remain in effect (including acceleration of exercisability resulting from applicable employment or retention agreements); provided, that in the event of any recapitalization, stock split, split-up, combination, exchange unchanged. 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 the Stock Options assumed in accordance with this Section 2.7. Within 15 days after the Effective Time, Parent shall file a Registration Statement on Form S-8 (or other reclassification in any successor form) under the Securities Act of 1933 (as amended, the "SECURITIES ACT") with respect of Parent’s outstanding to all shares of capital stock following Parent Common Stock subject to such Stock Options that may be registered on a Form S-8, and shall use its best efforts to maintain the date hereof, there shall be an equitable adjustment with respect heretoeffectiveness of such Registration Statement for so long as such Options remain outstanding.

Assumption of Stock Options. Subject to applicable Law, Parent and (a) At the Company shall take such actions, including (Effective Time all rights with respect to the Company) any necessary amendment of the Company Common Stock Options under each Employee Option then outstanding shall be converted into and the Company Option Plans become rights with respect to permit Parent to assumeCommon Stock, and Parent shall assume, at assume each such Employee Option in accordance with the terms and conditions (as in effect as of the date of this Agreement) of the Employee Option Plan under which it was issued and the terms and conditions of the stock option agreement by which it is evidenced. From and after the Effective Time, (i) each Company Employee Option Plan and each of the Assumed Options and substitute assumed by Parent may be exercised solely for shares of Parent Common Stock for the Company Common Stock purchasable under each such assumed Stock OptionStock, which assumption and substitution shall be effected as follows (such actions by the Company shall be done in accordance with the Company Option Plans and stock option agreements under which the grants have been made, including but not limited to the authorization in Sections 9 thereof (and in compliance in all respects with Sections 7 thereof) and the Company shall obtain any other documentation from any holder of the option required as a result of the Assumed Option under the Company Option Plans and stock option agreements under which such grants have been made): (aii) the number of shares of Parent Common Stock purchasable under the Assumed subject to each such Employee Option shall be equal to 0.386 (the “Conversion Fraction”) times the number of shares of Company Common Stock underlying the Assumed subject to such Employee Option (with any fractional amount rounded immediately prior to the next lowest full Effective Time multiplied by the Exchange Ratio, rounding down to the nearest whole share); , (biii) the per share exercise price of under each such Assumed Employee Option shall be an amount (with fractional amounts rounded to the next highest cent) equal to adjusted by dividing the per share exercise price of the Stock under such Employee Option being assumed divided by the Conversion Fraction; andExchange Ratio and rounding up to the nearest cent, and (iv) any restriction on the exercise of any such Employee Option shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Employee Option shall otherwise remain unchanged, except as otherwise provided in such Employee Option with respect to a "change of control". (b) Prior to the Effective Time, the Company shall take all action that may be necessary (under the plans pursuant to which Employee Options are outstanding and otherwise) to effectuate the provisions of this Section 5.4 and to ensure that, from and after the Effective Time, holders of Employee Options have no rights with respect thereto other than those specifically provided in this Section 5.4. (c) Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery under the Employee Options Plans assumed in accordance with this Section 5.4. (d) Parent shall not assume the Director Option Plan or any other Director Options outstanding thereunder. Each Director Option outstanding under the Director Option Plan shall be treated in accordance with the provisions of each Assumed the Director Option shall remain in effect (Plan, including acceleration of exercisability resulting from applicable employment or retention agreementsSection 4.2(c); provided, that in the event of any recapitalization, stock split, split-up, combination, exchange of shares or other reclassification in respect of Parent’s outstanding shares of capital stock following the date hereof, there shall be an equitable adjustment with respect hereto.

Assumption of Stock Options. Subject to applicable Law(a) Non-Employee Director Stock Option Plan, Parent the PCI 1996 Stock Option Plan, and the Company shall take such actionsPCI 1996 Non-Employee Director Stock Option Plan, including each as amended and in effect on the date of the First Agreement (collectively the "PCI Option Plans"). Schedules 2.5(a) and 2.5(b) also set forth with respect to each PCI Stock Option the Company) option exercise price, the number of shares subject to the option, any necessary amendment related stock appreciation rights, the dates of grant, vesting, exercisability and expiration of the option and whether the option is an incentive stock option or a non-qualified stock option. All rights under the PCI Stock Options shall be treated as provided in this Section 1.21, and to the Company extent the terms of the PCI Option Plans and/or of any related agreements are inconsistent with the treatment to permit Parent be accorded to assumethe PCI Stock Options pursuant to this Section 1.21, then PCI shall cause the PCI Option Plans and/or any related agreements with affected participants to be amended, and Parent all required third party, governmental and regulatory body consents or approvals to such amendments to be procured, such that all such inconsistencies shall assume, be eliminated by the Effective Time of the Merger. (b) Each PCI Stock Option outstanding immediately prior to the Effective Time of the Merger shall be converted at the Effective Time, each Company Option Plan and each Time of the Assumed Options Merger into an issued and substitute shares outstanding option of Parent Common Stock for the Company Common Stock purchasable under each such assumed Stock Option, which assumption and substitution shall be effected as follows (such actions by the Company shall be done Nextel in accordance with the Company terms of the PCI Option Plans, so that (i) from and after the Effective Time of the Merger, each such PCI Stock Option may be exercised only for shares of Nextel Common Stock notwithstanding any contrary 32 24 options under Nextel's Amended and Restated Incentive Equity Plan, as amended May 13, 1996 (the "Nextel Plan"). (c) The Board of Directors of PCI and/or of the Surviving Corporation, as appropriate, shall take such action as may be required under the PCI Option Plans and stock option agreements the Compensation Committee of the Board of Directors of Nextel shall take such action as may be required under which the grants have been made, including but not limited Nextel Plan to effectuate the foregoing. Prior to the authorization in Sections 9 thereof (and in compliance in all respects with Sections 7 thereof) and the Company shall obtain any other documentation from any holder Effective Time of the option required as a result of the Assumed Option under the Company Option Plans and stock option agreements under which such grants have been made): (a) Merger, Nextel shall reserve for issuance the number of shares of Parent Nextel Common Stock purchasable necessary to satisfy the obligations of Nextel under this Section 1.21, and within five (5) business days after the Assumed Option Effective Time of the Merger, Nextel shall be equal register such shares pursuant to 0.386 the Securities Act of 1933, as amended (the “Conversion Fraction”) times the number of shares of Company Common Stock underlying the Assumed Option (with any fractional amount rounded "Securities Act"). Prior to the next lowest full share); (b) the per share exercise price of such Assumed Option shall be an amount (with fractional amounts rounded to the next highest cent) equal to the per share exercise price Effective Time of the Stock Option being assumed divided by Merger, PCI, and thereafter the Conversion Fraction; and (c) any other Surviving Corporation, as may be appropriate, shall take such actions as are necessary to effect the provisions of each Assumed Option this Section 1.21 and to preserve for the holders of PCI Stock Options the benefits to be provided pursuant to this Section 1.21. Notwithstanding anything in this Section 1.21(c), neither PCI nor Nextel shall remain in effect have any liability for failing to take (including acceleration of exercisability resulting from applicable employment or retention agreements); provided, that in the event of any recapitalization, stock split, split-up, combination, exchange of shares or other reclassification to cause to be taken) actions in respect of Parent’s outstanding shares of capital any stock following option plan or related agreement that would violate (in any material respect) the date hereof, there shall terms thereof or would be an equitable adjustment with respect heretoprohibited by applicable law.

Assumption of Stock Options. Subject to applicable Law, Parent (a) Schedules 2.5(a) and 2.5(b) set forth a list of each director and employee stock option outstanding on the Company shall take such actions, including (with respect to the Company) any necessary amendment date of the First Agreement, whether or not fully exercisable (collectively, the "PCI Stock Options and the Company Option Plans Options"), to permit Parent to assume, and Parent shall assume, at the Effective Time, each Company Option Plan and each of the Assumed Options and substitute shares of Parent purchase PCI Common Stock for the Company Common Stock purchasable under each such heretofore granted or assumed Stock Optionby PCI pursuant to any stock option, which assumption and substitution shall be effected as follows (such actions stock purchase or similar plan adopted, assumed or maintained at any time by the Company shall be done PCI, any of its controlled Affiliates or any of their respective predecessors in accordance with the Company Option Plans and stock option agreements under which the grants have been madeinterest, including but not limited to the authorization in Sections 9 thereof (PCI 1993 Stock Option Plan, the PCI 1994 Non-Employee Director Stock Option Plan, the PCI 1996 Stock Option Plan, and the PCI 1996 Non-Employee Director Stock Option Plan, each as amended and in compliance in all respects with Sections 7 thereofeffect on the date of the First Agreement (collectively the "PCI Option Plans"). Schedules 2.5(a) and 2.5(b) also set forth with respect to each PCI Stock Option the Company shall obtain option exercise price, the number of shares subject to the option, any other documentation from any holder related stock appreciation rights, the dates of grant, vesting, exercisability and expiration of the option required and whether the option is an incentive stock option or a non-qualified stock option. All rights under the PCI Stock Options shall be treated as a result provided in this Section 1.21, and to the extent the terms of the Assumed Option under the Company PCI Option Plans and/or of any related agreements are inconsistent with the treatment to be accorded to the PCI Stock Options pursuant to this Section 1.21, then PCI shall cause the PCI Option Plans and/or any related agreements with affected participants to be amended, and all required third party, governmental and regulatory body consents or approvals to such amendments to be procured, such that all such inconsistencies shall be eliminated by the Effective Time of the Merger. (b) Each PCI Stock Option outstanding immediately prior to the Effective Time of the Merger shall be converted at the Effective Time of the Merger into an issued and outstanding option of Nextel in accordance with the terms of the PCI Option Plans, so that (i) from and after the Effective Time of the Merger, each such PCI Stock Option may be exercised only for shares of Nextel Common Stock notwithstanding any contrary provision of the PCI Option Plans or stock option agreements under which executed in connection therewith, (ii) each such grants have been made): (a) PCI Stock Option shall at the Effective Time of the Merger become an option to purchase a number of shares of Nextel Common Stock equal to the quotient arrived at by dividing the number of shares of Parent PCI Common Stock purchasable subject to such option immediately prior to the Effective Time, by the Basic Exchange Ratio, as adjusted pursuant to Article I ("Converted Nextel Shares"), and (iii) the exercise price per share of Nextel Common Stock at which each such PCI Stock Option is exercisable shall be the amount (rounded up to the next whole cent) arrived at by multiplying the exercise price per share of PCI Common Stock at which such PCI Stock Option is exercisable immediately prior to the Effective Time by the Basic Exchange Ratio, as adjusted pursuant to Article I (the "Converted Per Share Price"); provided, however, that, notwithstanding the foregoing, Nextel shall not issue or pay for any fractional share otherwise issuable upon any exercise by any holder of PCI Stock Options that are so converted, and provided further, however, that in the case of each PCI Stock Option which is an incentive stock option, the Basic Exchange Ratio shall be adjusted for such option, if necessary, so as not to constitute a modification, extension or renewal of the option, within the meaning of Section 424(h) of the Code. All PCI Stock Options converted into issued and outstanding options of Nextel pursuant to the preceding sentence, except those PCI Stock Options held by directors who are not also employees or consultants of PCI or any of its subsidiaries, shall be so converted into issued and outstanding options under Nextel's Amended and Restated Incentive Equity Plan, as amended May 13, 1996 (the "Nextel Plan"). (c) The Board of Directors of PCI and/or of the Surviving Corporation, as appropriate, shall take such action as may be required under the Assumed PCI Option Plans and the Compensation Committee of the Board of Directors of Nextel shall take such action as may be equal required under the Nextel Plan to 0.386 (effectuate the “Conversion Fraction”) times foregoing. Prior to the Effective Time of the Merger, Nextel shall reserve for issuance the number of shares of Company Nextel Common Stock underlying necessary to satisfy the Assumed Option obligations of Nextel under this Section 1.21, and within five (with any fractional amount rounded 5) business days after the Effective Time of the Merger, Nextel shall register such shares pursuant to the next lowest full shareSecurities Act of 1933, as amended (the "Securities Act"); (b) the per share exercise price of such Assumed Option shall be an amount (with fractional amounts rounded . Prior to the next highest cent) equal to the per share exercise price Effective Time of the Stock Option being assumed divided by Merger, PCI, and thereafter the Conversion Fraction; and (c) any other Surviving Corporation, as may be appropriate, shall take such actions as are necessary to effect the provisions of each Assumed Option this Section 1.21 and to preserve for the holders of PCI Stock Options the benefits to be provided pursuant to this Section 1.21. Notwithstanding anything in this Section 1.21(c), neither PCI nor Nextel shall remain in effect have any liability for failing to take (including acceleration of exercisability resulting from applicable employment or retention agreements); provided, that in the event of any recapitalization, stock split, split-up, combination, exchange of shares or other reclassification to cause to be taken) actions in respect of Parent’s outstanding shares of capital any stock following option plan or related agreement that would violate (in any material respect) the date hereof, there shall terms thereof or would be an equitable adjustment with respect heretoprohibited by applicable law.

Assumption of Stock Options. Subject (i) At the Effective Time, each outstanding option to purchase Company Common Stock (a "Stock Option") granted under the Company's 1987 Stock Option Plan and 1990 Stock Option Plan, each as amended to date (collectively, the "Company Stock Option Plans"), whether vested or unvested, shall be assumed by Parent and constitute an option to acquire, on the same terms and conditions as were applicable Lawunder such Stock Option prior to the Effective Time, the number (rounded up to the nearest whole number) of Parent Shares as the holder of such Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such Stock Option in full immediately prior to the Effective Time (not taking into account whether or not such Stock Option was in fact exercisable), at a price per share equal to (x) the aggregate exercise price for Company Common Stock otherwise purchasable pursuant to such Stock Option divided by (y) the number of Parent Shares deemed purchasable pursuant to such Stock Option. At and after the Effective Time, Parent and the Company shall take such actions, including (will honor all obligations with respect to such Stock Options under the Company) any necessary amendment terms of the such Stock Options and the Company Stock Option Plans to permit Parent to assume, and Parent shall assume, at as in effect on the date hereof. At the Effective Time, the Company Stock Option Plans shall be amended to require that the shares of stock issuable and deliverable upon the exercise of a Stock Option, or any portion thereof, shall be unissued shares or issued shares which then have been reacquired by Parent, but no other amendments shall be made except as provided herein. (ii) As soon as practicable after the Effective Time (but in any event within five (5) business days), Parent shall deliver to each Company holder of an outstanding Stock Option Plan an appropriate notice setting forth such holder's rights pursuant thereto, and each such Stock Option shall otherwise continue in effect on the same terms and conditions (including antidilution provisions) as were in effect prior to the Effective Time. (iii) Parent has taken all corporate action necessary to reserve for issuance a sufficient number of Parent Shares for delivery pursuant to the terms set forth in this Section 1.06(c). (iv) Subject to any applicable limitations under the Securities Act of 1933, as amended, and the rules and regulations thereunder (the "Securities Act"), Parent shall file a Registration Statement on Form S-8 (or any successor form), which may be in the form of a post-effective amendment to the Registration Statement (as defined below), with the Securities and Exchange Commission (the "SEC"), effective on the date of the Assumed Options and substitute Effective Time, with respect to the shares of Parent Common Stock for the Company Common Stock purchasable under each such assumed Stock Option, which assumption and substitution shall be effected as follows (such actions by the Company shall be done in accordance with the Company Option Plans and stock option agreements under which the grants have been made, including but not limited to the authorization in Sections 9 thereof (and in compliance in all respects with Sections 7 thereof) and the Company shall obtain any other documentation from any holder of the option required as a result of the Assumed Option under the Company Option Plans and stock option agreements under which such grants have been made): (a) the number of shares of Parent Common Stock purchasable under the Assumed Option shall be equal to 0.386 (the “Conversion Fraction”) times the number of shares of Company Common Stock underlying the Assumed Option (with any fractional amount rounded to the next lowest full share); (b) the per share issuable upon exercise price of such Assumed Option shall be an amount (with fractional amounts rounded to the next highest cent) equal to the per share exercise price of the Stock Option being assumed divided by Options, and shall use all reasonable efforts to maintain the Conversion Fraction; and effectiveness of such registration statement (cand maintain the current status of the prospectus or prospectuses contained therein) any other provisions of each Assumed Option for so long as such Stock Options shall remain in effect (including acceleration of exercisability resulting from applicable employment or retention agreements); provided, that in the event of any recapitalization, stock split, split-up, combination, exchange of shares or other reclassification in respect of Parent’s outstanding shares of capital stock following the date hereof, there shall be an equitable adjustment with respect heretooutstanding.

Assumption of Stock Options. Subject Sterling shall assume the obligations of HBI under the stock options, outstanding as of the date of this Agreement, to purchase 132,657 shares of HBI Common Stock which remain unexercised on the Effective Date (the "HBI Options"). The holder(s) of the HBI Options shall receive stock options (the "Exchange Options") to purchase, on the same terms and conditions as were applicable Lawunder the assumed HBI Options, Parent a number of shares of Sterling Common Stock equal to the product of the Exchange Ratio and the Company number of shares of HBI Common Stock subject to such HBI Options. The option exercise price per share of the Exchange Options shall take such actions, including (with respect be equal to the Companyoption exercise price per share of HBI Common Stock divided by the Exchange Ratio (the option price per share, as so determined, being rounded upward to the nearest full cent). The Exchange Options to be received by the HBI Option holders shall be subject to proportional adjustment under Section 2.1(b) any necessary amendment of this Agreement; provided, however, that the Stock obligation to assume the HBI Options by Sterling is conditioned upon receipt of copies of all executed outstanding options as disclosed on Annex 2.1(c) and the Company Option Plans to permit Parent to assume, and Parent shall assume, at the Effective Time, each Company Option Plan and receipt of agreements from each of the Assumed holders of HBI Options and substitute shares of Parent Common Stock for to accept the Company Common Stock purchasable under each such assumed Stock Option, which assumption and substitution Exchange Options in exchange therefor. Each Exchange Option shall be effected as follows (such actions by the Company shall be done exercisable in accordance with the Company Option Plans and stock option agreements under which the grants have been made, including but not limited to the authorization in Sections 9 thereof (and in compliance in all respects with Sections 7 thereof) and the Company shall obtain any other documentation from any holder terms of the option required corresponding HBI Option (including any acceleration of exercisability as a result of the Assumed Merger and giving effect to the Exchange Ratio, as provided herein). To the extent an HBI Option under the Company Option Plans and qualifies as an incentive stock option agreements under which such grants have been made): (a) Section 422 of the Code, the corresponding Exchange Option shall also so qualify, to the extent permitted by the PCBL, the federal tax laws and the "pooling of interest"accounting rules. Prior to the Effective Time, Sterling shall reserve for issuance and, if not previously registered pursuant to the Securities Act of 1933, as amended, register the number of shares of Parent Sterling Common Stock purchasable under necessary to satisfy Sterling's obligations with respect to the Assumed Option shall be equal to 0.386 (the “Conversion Fraction”) times the number issuance of shares of Company Sterling's Common Stock underlying the Assumed Option (with any fractional amount rounded pursuant to the next lowest full share); (b) the per share exercise price of such Assumed Option shall be an amount (with fractional amounts rounded to the next highest cent) equal to the per share exercise price of the Stock Option being assumed divided by the Conversion Fraction; and (c) any other provisions of each Assumed Option shall remain in effect (including acceleration of exercisability resulting from applicable employment or retention agreements); provided, that in the event of any recapitalization, stock split, split-up, combination, exchange of shares or other reclassification in respect of Parent’s outstanding shares of capital stock following the date hereof, there shall be an equitable adjustment with respect heretoExchange Options.