Common use of Roll-Over of Certain Options; Retention of Equity Clause in Contracts

Roll-Over of Certain Options; Retention of Equity. (i) As of the date hereof, Executive is the beneficial owner of 40,804 shares (together with the rights associated therewith pursuant to the Shareholders' Rights Agreement, dated as of February 16, 1989, as amended and restated as of March 12, 1990, the "Previously Owned Shares") of the common stock, par value $.20 per share, of Employer (the "Prior Common Stock"), including 30,000 shares held in two family trusts, and holds options (the "Prior Options") to purchase 413,000 additional shares of Prior Common Stock. (ii) Executive agrees that, immediately prior to the effective time of the Merger (the "Effective Time"), he will contribute all of the Previously Owned Shares to MergerCo in exchange for shares of common stock, par value $.20 per share, of MergerCo (the "MergerCo Common Stock"), which shares of MergerCo Common Stock shall be converted into a like number of shares of common stock, par value $.20 per share, of the corporation surviving the Merger (the "Recapitalized Common Stock"). (iii) Employer and Executive each acknowledge and agree that (x) in - the case of each Prior Option that, immediately prior to the Effective Time, is intended to be a nonqualified stock option (each, a "Prior Nonqualified Option"), such Prior Nonqualified Stock Option shall become fully vested and exercisable as of the Effective Time and (y) in the case of each Prior Option - that, immediately prior to the Effective Time, is intended to qualify as an "incentive stock option" under section 422 of the Internal Revenue Code of 1986, as amended (each, a "Prior ISO"), (A) each Prior ISO that has become vested and - exercisable prior to the Effective Time in accordance with the award agreement evidencing such Prior ISO shall remain fully vested and exercisable from and after the Effective Time, (B) Prior ISOs that have not become vested and - exercisable prior to the Effective Time having an aggregate exercise price not exceeding the excess of (1) $100,000 over - (2) the aggregate exercise price of any Prior ISOs that become vested - in calendar year 1998 prior to the Effective Time shall become vested and exercisable as of the Effective Date and (C) each - remaining Prior ISO shall become vested after the Effective Time in accordance with the terms of the award agreement evidencing such Prior ISO. Executive acknowledges and agrees that, at the Effective Time, each Prior Option will be automatically converted into an option (the "Recapitalized Option") to purchase a number of shares (such shares, the "Recapitalized Option Shares") of common stock, par value $.20 per share, of the corporation surviving the Merger (the "Recapitalized Common Stock") equal to the sum of:

Roll-Over of Certain Options; Retention of Equity. (i) As of Prior to the date hereofMerger, Executive is was the beneficial owner of 40,804 shares (together with the rights associated therewith pursuant to the Shareholders' Rights Agreement, dated as of February 16, 1989, as amended and restated as of March 12, 1990, the "Previously Owned Shares") of the common stock, par value $.20 per share, of Employer (the "Prior Common Stock"), including 30,000 shares held in two family trusts, and holds held options (the "Prior Options") to purchase 413,000 additional shares of Prior Common Stock. (ii) Executive agrees that, immediately Immediately prior to the effective time of the Merger (the "Effective Time"), he will contribute Executive contributed all of the Previously Owned Shares to MergerCo in exchange for shares of common stock, par value $.20 per share, of MergerCo (the "MergerCo Common Stock"), which shares of MergerCo Common Stock shall be were converted into a like number of shares of common stock, par value $.20 per share, of the corporation surviving the Merger (the "Recapitalized Common Stock"). (iii) Employer and Executive each acknowledge and agree that (x) in - In the case of each Prior Option that, immediately prior to - the Effective Time, is was intended to be a nonqualified stock option (each, a "Prior Nonqualified Option"), such Prior Nonqualified Stock Option shall become became fully vested and exercisable as of the Effective Time and (y) in the case of each - Prior Option - that(each, a "Prior ISO")that, immediately prior to the Effective Time, is was intended to qualify as an "incentive stock option" under section 422 of the Internal Revenue Code of 1986, as amended (each, a the "Prior ISOCode"), (A) each Prior ISO that has - had become vested and - exercisable prior to the Effective Time in accordance with the award agreement evidencing such Prior ISO shall remain remains fully vested and exercisable from and after the Effective Time, (B) Prior ISOs that have had not - become vested and - exercisable prior to the Effective Time having an aggregate exercise price not exceeding the excess of (1) $100,000 over - (2) the aggregate exercise price of any Prior ISOs that become vested - in calendar year 1998 prior to the Effective Time shall become became vested and exercisable as of the Effective Date and (C) each - remaining Prior ISO shall become vested after the Effective Time in accordance with the terms of the award agreement evidencing such Prior ISO. Executive acknowledges and agrees that, at At the Effective Time, each Prior Option will be was automatically converted into an option (the "Recapitalized Option") to purchase a number of shares (such shares, the "Recapitalized Option Shares") of common stock, par value $.20 per share, of the corporation surviving the Merger (the "Recapitalized Common Stock") equal to the sum of: (x) the quotient of (I) the product of (A) the number of shares of Prior Common - Stock subject to such Prior Option immediately prior to the Effective Time, multiplied by (B) the cash consideration per - share of Prior Common Stock paid pursuant to the Merger Agreement to holders of Prior Common Stock, divided by (II) the price per share of Recapitalized Common Stock paid by the CD&R Fund (as defined below) for the shares of MergerCo which were exchanged for the shares of the Company's Recapitalized Common Stock upon the consummation of the Merger, and (y) the product of (I) the number of shares of Prior Common Stock - subject to such Prior Option immediately prior to the Effective Time, multiplied by (II) the number of shares of Recapitalized Common Stock -- transferred pursuant to the Merger Agreement to holders of Prior Common Stock for each such share of Prior Common Stock. Each Recapitalized Option shall have an exercise price per Recapitalized Option Share equal to the quotient of: (x) the aggregate exercise price for all shares of Prior Common Stock subject to the corresponding Prior Option, divided by (y) the number of Recapitalized Option Shares subject to such Recapitalized Option immediately following the conversion thereof contemplated hereby. Each of the Company and Executive agree that the foregoing adjustment in the number of shares and the exercise prices applicable in respect of Recapitalized Options is intended to comply with the procedures for adjusting the number of shares subject to stock options (and the corresponding exercise prices) in a corporate transaction under Section 424 of the Code and the regulations thereunder, regardless of whether such Section is applicable to such Recapitalized Options. The method used to determine fair market value of the Company's stock for purposes of such adjustment as a result of the Merger was the arm's length negotiated value assigned to the Recapitalized Common Stock in connection with the Merger (the "Merger Method"), which is one of several acceptable valuation methods expressly set forth in Treas. Reg. (S)1.425- 1(b)(7).