Document:

asset_purch.htm

Exhibit 10.1

 

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT is made and entered into as of September 18, 2009, by and between Premier Alliance Group, Inc., a Nevada corporation with a principal place of business at 45212 Sharon Road, Suite 300, Charlotte NC 28211 (the “Purchaser”),
and PeopleSource, Inc., a North Carolina corporation with a principal place of business at 1399 Ashleybrook Lane, Suite 230, Winston-Salem, NC 27103 (the “Seller”).

In consideration of the mutual covenants, agreements and warranties herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

WHEREAS, Seller has been and is engaged in business of information technology and professional services and the business activities relevant and related thereto; and

            WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, substantially all of the assets, real and personal, tangible and intangible, of Seller for the consideration and on the other terms and conditions set forth in this Agreement.

NOW, THEREFORE, the parties agree as follows:

1.          Purchased Assets.

1.1           General.  Subject to the terms and conditions of this Agreement, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller, at
the Closing all of Seller's assets (except the Excluded Assets, as defined in Section 1.2) whether real or personal, tangible or intangible, fixed or contingent, including, but not limited to, all of Seller's right, title and interest in (a) equipment; (b) furniture and fixtures; (c) supply inventory; (d) assumed names, trade names and trademarks, proprietary information and other intangible assets (the "Intellectual Property"); (e) executory contracts
to which Seller is a party, including, but not limited to, agreements with employees or clients (for the avoidance of doubt, a list of assumed executory contracts (“Assumed Executory Contracts” is set forth in Exhibit 1.1); (f) files, client records and other information necessary to the operation of the business (including, but not limited to, lists of active and inactive clients); (g) except as specifically provided in Section 1.2,
book and records; (h) all telephone and fax numbers, e-mail accounts and web sites associated with the business; (i) lease deposits and (j) goodwill (collectively, the "Purchased Assets").

1.2           Assignment and Assumption of Liabilities.

(a)  Subject to the terms and conditions set forth in this Agreement, including Section 1.4 hereto, Purchaser shall only assume from Seller and thereafter be responsible for the payment, performance or discharge of the liabilities and obligations of Seller arising after the Closing
(as defined in Section 2.4) under the Assumed Executory Contracts (the “Assumed Obligations”).

  

  

  

(b)  Section 1.2(a) shall not limit any claims or defenses Purchaser may have against any party other than Seller.  The transactions contemplated by this Agreement shall in no way expand

the rights or remedies of any third party against Purchaser or Seller.

1.3           Excluded Assets.  Notwithstanding anything to the contrary in this Agreement, the following assets of Seller shall be retained by Seller and are not
being sold or assigned to Purchaser hereunder (all of the following are referred to collectively as the “Excluded Assets”):

(a)  all Contracts other than the Assumed Executory Contracts listed on Exhibit 1.1 (the “Excluded Contracts”);

(b) Sellers Cash and Cash Equivalents and accounts receivable as of the Closing Date;

(c)  corporate minute book, seal, stock ledger and similar type items;

(d) Seller's original financial records and books of account; provided, however, that Seller shall supply, at its expense, copies of all such items to Purchaser to

           the extent necessary to carry out the intent of this Agreement;

(e) all assets maintained pursuant to or in connection with any Employee Benefit Plan; and

(f) any equity securities of Seller and any other issuer owned by Seller.

1.4           No Other Liabilities Assumed.  Seller acknowledges and agrees that pursuant to the terms and provisions of this Agreement, Purchaser will not assume,
or in any way be liable or responsible for, any liability of Seller (including liabilities relating to the Excluded Assets or to the Purchased Assets (and the use thereof) or any outstanding checks, including, but not limited to, any obligations or liabilities pursuant to Seller’s 401(k) Plan arising prior to the Closing), whether relating to or arising out of the business, the Excluded Assets or the Purchased Assets or otherwise, other than the Assumed Obligations.

1.5           Obligations in Respect of Assumed Executory Contracts.  Purchaser shall be responsible for paying all costs and expenses accrued under any Assumed Executory
Contract subsequent to the Closing Date.

1.6           Allocation of Purchase Price.  The Purchase Price shall be allocated among the Purchased Assets as provided in Exhibit 1.6.  Pursuant to Section
1060 of the Internal Revenue Code of 1986, as amended (the "Code"), the parties shall complete and file Internal Revenue Service Form 8594 (Asset Acquisition Statement) and any other documents necessary in connection therewith in accordance with the allocation of the Purchase Price provided for in this Section 1.6.

1.7           Expenses.  Each party shall bear its own costs, including, without limitation, legal and accounting fees, incurred by it in connection with negotiating
and consummating this Agreement.

  

  

  

2.          Purchase Price.

2.1           Purchase Price.  In consideration of the Purchased Assets, Purchaser shall pay to Seller (a) the sum of $400,000 in cash, subject to adjustment as described
in Section 2.3 below; and (b) such number of restricted shares of Premier Alliance Group, Inc. common stock equal to $100,000, based on the closing price of the common stock on the Closing Date, as stated on the OTC Bulletin Board (the “Shares”)(collectively, the “Purchase Price”)

2.2           Payment.  The Purchase Price shall be paid as follows: (i) $140,000 in cash, and delivery of the restricted Shares within 10 days after the Closing
Date; (ii) $140,000, subject to adjustment described in Section 2.3 below, thirteen months from the Closing Date; and (iii) $120,000, subject to adjustment described in Section 2.3 below, two years from the Closing Date.

2.3           Earnout Provision.   The final two payments described in 2.2(ii) and (iii) above shall be adjusted based on the actual revenue number (“ARN”)
as determined one year after the Closing Date.  The ARN shall be calculated as follows:

ARN (one year after the Closing Date) x .25 (multiple of revenue)

Minus                      $100,000 (stock valuation component)

Minus                      $140,000 (first cash installment)

=           amount to be paid in last two equal installments

The ARN will be all revenue generated by the PeopleSource unit of Purchaser or of the current PeopleSource entity (if functioning in a contractual relationship with Purchaser), regardless of source, including but not limited to, new business generated after closing, repeat business, and business
opportunities moved from Purchaser to Purchaser’s PeopleSource unit.

 

2.4           The Closing Date.

 

(a)           The Closing of the transactions contemplated by this Agreement (the "Closing") shall take place in the offices of Premier Alliance Group, Inc. on the 1st day
of October 2009 (the "Closing Date"), unless another place or time is mutually agreed upon in writing by the parties.

 

 

(b)           At the Closing or prior thereto, Purchasr and Seller shall exchange the various certificates, instruments and such documents referred to in Section 5 of this Agreement.

 

3.          Seller’s Representations and Warranties.  Seller represents and warrants to Purchaser the matters set forth below. These are continuing
representations and warranties, and shall survive the Closing as provided in Section 7.4, notwithstanding any investigation by Purchaser:

3.1           Organization, Standing and Power.   Seller is (i) a corporation duly organized, validly existing, and in good standing under the laws of the State
of North Carolina; (ii) is in good standing and qualified in all states and other jurisdictions where Seller is doing business as required by law; (iii) is not qualified and has not done business as a foreign corporation in any other state or other

  

  

  

jurisdiction and has not, at any time prior to the date of this Agreement, received any communications from any state or other jurisdiction asserting that its activities require that it be qualified to do business in that state or other jurisdiction; and (iv) has received all approvals of Federal, state and local authorities necessary for
it to conduct its business as currently being conducted.

3.2           Conduct of Business.  Seller has all requisite power and authority to own its property and operate its business as and where such is now being conducted.
Seller is not a party or subject to any Contract, judgment, order or decree that will or may restrict the conduct of its business in any jurisdiction or location.

3.3           Authorized Capital Stock.  The total authorized capital stock of Seller consists of 100,000 shares of common stock, no par value, of which 1,000 shares
of common stock are issued and outstanding, and there are no shares of preferred stock.  All issued and outstanding shares are validly issued in accordance with all applicable laws and are fully paid and non-assessable.  There are no outstanding subscriptions, offers, options, rights, warrants, convertible securities, or other contracts, commitments or contingencies obligating or requiring the issuance of any additional shares or other securities of Seller.

3.4           No Subsidiaries or Affiliates.  Seller has no wholly or partly owned subsidiaries, has never had any wholly or partly owned subsidiaries, nor is it
a party to any joint venture or partnership, nor does it have any direct or indirect interest either by way of stock ownership or otherwise, in any other person, nor are there any outstanding offers by Seller with respect to any such matter.

3.5           No Conflict.  The execution and delivery of this Agreement and the documents to be executed and delivered pursuant to this Agreement to accomplish the
Closing of the Agreement do not and will not on the Closing Date (a) conflict, contravene or violate any provision of Seller's Certificate or Articles of Incorporation or By-Laws or any resolution adopted by the board of directors of Seller; (b) result in a breach by Seller, or constitute a default under, or permit the termination of, or cause the acceleration of the maturity of, any of the terms, conditions, or provisions of any contract or agreement, including but not limited to, any shareholder agreement,
to which Seller is a party or by which Seller or any of its assets may be bound or affected; (c) violate any statute, law, regulation, judgment, order, writ, injunction, decree or demand of any court or Federal, state, municipal, or other governmental department, commission, board, bureau, agency or instrumentality, to which Seller is named as a party; or (d) result in the creation or imposition of any lien, charge, or encumbrance of any nature whatsoever.

3.6   Authorization.  Seller has full corporate power and authority to enter into this Agreement and any Contract provided for herein and to carry out the Agreement.  The board of directors of
Seller have duly authorized and approved the execution, delivery and performance of this Agreement, each Contract and document provided for herein, and no other corporate proceedings on the part of Seller are necessary to authorize and approve such execution, delivery and performance.  This Agreement and each Contract provided for herein to which Seller is a party has been duly executed and delivered by Seller and constitutes the valid and binding agreement of Seller enforceable against it in accordance
with its terms (except as may be limited by applicable bankruptcy laws or similar laws affecting creditors' rights generally).

  

  

  

3.7   Minute Books and Stock Books.  The minute books for Seller provided to Purchaser contain true originals or copies of all minutes of meetings of and corporate actions taken by, the shareholders, the
board of directors and all committees of the board of directors of Seller and are reflective of actions taken on those occasions in all material respects.  The copies of the stock books of Seller provided to Purchaser provide a complete and accurate record of the issuance, transfer and holders of all stock of Seller ever declared, paid, authorized or issued.

3.8   Governmental Authorities.  Seller is not required to submit any notice, report or other filing to any governmental or regulatory authority in connection with the execution, delivery or performance
of this Agreement or the consummation of the transactions contemplated hereby. No consent, approval or authorization of any governmental or regulatory authority is required to be obtained by Seller in connection with the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby.

3.9           Purchased Assets.

                       (a) Contracts.  Seller has made available to Purchaser a correct and complete copy of each Assumed Executory Contract listed on
Exhibit 1.1.  If any additional contracts or leases that are not included in Exhibit 1.1 are determined after the date hereof to constitute executory contracts, Purchaser shall have the right, in its sole discretion, to add such contract or lease to Exhibit 1.1, and shall not be responsible for any “cure costs”.

(b) Title. Other than leased assets and licensed software, Seller has, and hereby conveys to Purchaser, effective as of the Closing Date, good and marketable title to all of the Purchased Assets, free and clear of all mortgages,
liens, pledges, charges, claims, leases, restrictions or encumbrances of any nature whatsoever, and subject to no restrictions with respect to transferability.  Simultaneously with the execution of this Agreement, Seller has delivered to Purchaser evidence satisfactory to Purchaser of the release of any liens, which appear of record against any of the Purchased Assets.

(c) Identification of Tangible Assets.  Exhibit 3.9 lists all of the tangible assets included within the Purchased Assets, setting forth for each item its date of acquisition, location and cost.

(d) Condition.  All of the tangible assets included within the Purchased Assets are in operating condition and repair, with normal wear and tear.  Each item of tangible equipment can operate substantially in
accordance with its specifications.

3.10           Conduct of Business.  The Purchased Assets comprise substantially all of the assets of Seller used by it and are sufficient to carry on the Business
as presently conducted by Seller.

3.11           Regulatory Compliance. Seller has not violated, nor is Seller currently in violation of, any zoning or building statutes, ordinances or regulations or other
laws, statutes, ordinances or regulations relating to the Purchased Assets or their use. Seller has not been issued a waiver for any condition presently existing, which would otherwise constitute such a violation.

  

  

  

3.12           No Defaults.  Seller is not in default or breach under any contracts currently in full force and effect, nor has any event occurred which, through
the passage of time or the giving of notice, or both, would constitute a breach or default thereunder, or cause the acceleration of any obligation of Seller or result in the creation of any lien, charge or encumbrance upon any asset of Seller.  To Seller's best knowledge, no other party to any of such contracts is in default or breach under any of such contracts, nor has any event occurred which, through the passage of time or the giving of notice, or both, would constitute a breach or default thereunder,
or cause the acceleration of any obligation of such other party, nor has any such other party given any notice of an intention to terminate or modify any of such contracts.

3.13           No Material Adverse Changes in Business or Financial Condition.  Since April 30, 2009 there have been no changes in the financial condition, results
of operations, business, assets or prospects of Seller, which changes have been, individually or in the aggregate, materially adverse.

3.14           Certain Business or Financial Transactions. Since April 30, 2009, Seller has not:

(a)  Mortgaged, pledged or caused to be created a security interest or other encumbrance in or against any of its property or assets.

(b)  Declared or authorized any dividends or other distributions which have not been fully paid, except for a June 2009 S-corp distribution of $16,400 relating to an

          estimated tax payment and an expected S-corp distribution to be paid in September 2009.

(c)  Declared, paid or authorized any stock options; profit sharing, pension or retirement contributions; health, disability, accident or life insurance contributions; or

           created any arrangement or plan for any such option or contribution.

(d)  Authorized or paid any bonus to any employee outside ordinary course of business.

(e)  Increased the compensation payable to or to become payable to any employee.

(f)  Made any change in the basis of computation of any bonus, commission or other compensation or benefit of any employee.

(g)  Suffered any damage, destruction or loss materially adversely affecting the properties, assets or business of Seller.

(h)  Sold, assigned or transferred any patents, trademarks, trade names, copyrights, licenses, franchises or other intangible assets or intangible properties of Seller.

(i)  Disposed of any of its assets except for the sale or disposition of used assets in the ordinary course of business.

(j)  Engaged in any other transaction other than in the ordinary course of business.

3.15           Intellectual Property.  Seller owns all of the Intellectual Property. No claim is pending or, to Seller's best knowledge, threatened to the effect
that the operations of Seller infringe upon or conflict with the asserted rights of any other person with respect to any Intellectual Property, and there is no basis for any such claim (whether or not pending or threatened). Each person who has produced any material Intellectual Property for use by Seller, including, but not limited to, employees and independent contractors, has relinquished, in writing, any claim or right which such person may have to any such Intellectual Property and confirmed Seller's ownership
thereof.

  

  

  

3.16           Financial Statements.   Each of the consolidated audited financial statements of Seller for the fiscal year ended December 31, 2008 and unaudited
fiscal quarters ending March 31, 2009 and June 30, 2009, have been prepared in all material respects in accordance with the published rules and regulations of the SEC (including Regulation S-X) and in accordance with United States generally accepted accounting principles applied on a consistent basis throughout the periods indicated (except as otherwise stated in such financial statements, including the related notes) and each fairly presents, in all material respects, the consolidated financial position, results
of operations and cash flows of Seller as at the respective dates thereof and for the respective periods indicated therein, except as otherwise set forth in the notes thereto (subject, in the case of unaudited statements, to normal and recurring year-end adjustments, none of which is material, individually or in the aggregate, to Seller). Seller has not, since April 30, 2009, made any material change in the accounting practices or policies applied in the preparation of the above financial statements.  In
addition after Closing, unaudted financials for quarter ending September 30, 2009 will be provided to Purchaser by October 30, 2009.

3.17           Accounts Receivables.  Subject to any allowance for doubtful accounts established in accordance with Seller's usual business practices and reflected
in the Financial Statements, each of Seller's accounts receivable relates to services rendered by Seller to the debtor client, is valid and is collectible in full in the ordinary course of business.

3.18           Tax Compliance.  Seller has duly, accurately and properly filed all necessary tax returns and tax reports (whether with respect to income, sales, withholding
or otherwise) which it is required to file with the United States Government, the state of its incorporation, and all other relevant state and local and foreign governmental agencies for all periods to and including the fiscal year ending December 31, 2008, and when and where required, for all periods since that date to the Closing Date.  Seller has paid or accrued the taxes shown to be due by all such returns and reports and up to and through the Closing Date.  As of the Closing Date, there
are no pending claims for unpaid taxes or fines, penalties or interest in respect thereof being asserted against Seller by the Federal Government or any state, local or foreign governmental agency and there is no basis for any such claim.  Seller has never been audited by Federal, state, local or foreign taxing authorities for sales, income, franchise or any other taxes.  For purposes of this Section 3.18, "tax" means any tax, levy, assessment, tariff, impost, imposition, toll, duty, deficiency
or fee imposed, assessed or collected by or under the authority of any governmental body, including, but not limited to, income taxes, franchise taxes, sales taxes, unemployment insurance and payroll related taxes ("Tax").

3.19           No Litigation or Governmental Investigations.  There are no suits at law or in equity, nor any government investigations or proceedings, pending, or,
to Seller's best knowledge, threatened against Seller, and there are no suits at law or in equity being investigated by Seller or pending or threatened in favor of Seller.

3.20           Clients.  Exhibit 3.20 contains a list of Seller's clients, showing annual revenue from each client for the last two full fiscal years and through
June 30, 2009 for the present fiscal year.

  

  

  

3.21           Employment Matters.   There are no claims pending, or, to Seller's best knowledge, threatened against Seller with respect to any applicant for
employment or present or former employee of Seller, nor, to Seller's best knowledge, does there exist any state of facts which is reasonably likely to give rise to any such claim.  With respect to Seller's employees and employee benefit plans and programs:

(a)  Human Resources Compliance.  Seller is in strict compliance with all applicable laws and regulations respecting employment and employment practices, terms and conditions of employment and wages and hours
(collectively, "Employment Laws").  Seller has paid all workers' compensation premiums to a private insurer or, if appropriate, has applied to, and has paid and secured coverage from a workers' compensation State Fund.

(b)  No Unfair Labor Practice, No Labor Disputes, Etc.  Seller: (i) is not engaged in any unfair labor practice; (ii) is not the subject of any investigation, complaint or proceeding based on any Employment
Laws; (iii) does not have any unfair labor practice complaints against it pending, or threatened, before the National Labor Relations Board or any other agency; (iv) does not have any strikes, labor disputes, slowdowns or stoppages actually pending, or threatened, against or directly affecting it; and (v) does not have any union representation question respecting its employees and no union organizing activities are taking place.

(c)  No Collective Bargaining.  Seller is not a party to any collective bargaining or other labor agreement(s) with any party on behalf of any of its employees, and no petition has been filed on behalf of Seller's
employees for recognition by any collective bargaining agent.

(d)  Multiemployer Pension Plan.  Seller has never and does not presently contribute to any "multiemployer pension plan" (as defined in section 3(37) of ERISA).

(e)  Benefit Plans. Except as provided in Exhibit 3.21:

(i)  Seller has delivered to Purchaser a true and complete copy of each Benefit Plan and any related funding agreements, including all amendments, supplements, and modifications thereto (and Exhibit 3.21 includes a description of any such item that is not in writing), all of which
are legally valid and binding and in full force and effect, and there are no defaults thereunder, notwithstanding the termination of the Benefit Plans prior to the Closing Date;

(ii)  Seller has delivered to Purchaser a true and complete copy of the most recent annual report and actuarial report for each Benefit Plan, and the Internal Revenue Service determination letter, if any, for each Benefit Plan and each amendment thereto;

(iii)  all contributions required to be made to each Benefit Plan under the terms of that Benefit Plan, ERISA, or other applicable law have been timely made. In the case of each Benefit Plan that is subject to Title 1, Subtitle B, Part 3 of ERISA, the net fair market value of the
assets held to fund that Benefit Plan as of the Closing Date exceeds the actuarial present value of all accrued benefits, both vested and non-vested (based upon projected earnings increases of five percent (5%) per annum, in the case of a final pay plan), under that Benefit Plan as of the Closing Date;

  

  

  

(iv)  each Benefit Plan complies currently, and has complied in the past, in form and operation, with the applicable provisions of ERISA, the Code, and other applicable law (including foreign law);

(v)  no excise tax is due or owing from Seller with respect to any "prohibited transaction" (as defined in section 4975(c)(1) of the Code) relating to any Benefit Plan. No amount is due or owing from Seller to the Pension Benefit Guaranty Corporation under title IV of ERISA for any
reason, or to any "multiemployer pension plan" (as defined in section 3(37) of ERISA) on account of any withdrawal therefrom; and

(vi)  since September 2, 1974, Seller has not terminated any employee benefit plan subject to title IV of ERISA for which a Notice of Sufficiency has not been issued by the Pension Benefit Guaranty Corporation.

(f)  Cobra Compliance.  Seller is, and at all pertinent times has been, in compliance with COBRA and any and all other applicable state and Federal laws, rules and regulations requiring Seller to offer the option
of continuing health insurance coverage to employees of Seller and their family members.

(g)  No Complaints. With respect to clauses (a) through (f) of this section 3.21, there are no complaints, charges, claims, litigations, investigations or administrative proceedings filed, pending or, to Seller's best
knowledge, threatened.

3.22           No Brokers, Finders, Etc.   Seller has not dealt with any broker, finder or other person who performed brokerage, finder or other similar services
in connection with this Agreement, nor does Seller know of any person that has any basis for claiming any brokerage, finders or similar fees against Seller in connection with this Agreement.

3.23           No Material Omission.  No representation or warranty by Seller in this Agreement, nor any statement, certificate or exhibit furnished or to be furnished
by Seller pursuant to this Agreement or any document or certificate delivered to Purchaser pursuant to this Agreement or in connection with the transactions contemplated by this Agreement contains or will contain any untrue statement of a material fact or omits or will omit a material fact necessary to make the statements contained therein not misleading.

4.           Purchaser’s Representations and Warranties:  Purchaser represents and warrants to Seller the matters set forth below.  These
are continuing representations and warranties, and shall survive the Closing as provided in Section 7.4, notwithstanding any investigation by Seller:

4.1           Corporate Structure.  Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada and has
all requisite power and authority to own its property and operate its business as and where such is now being conducted.

4.2           No Conflict.  The execution and delivery of this Agreement and the documents to be executed and delivered pursuant to this Agreement to accomplish the
Closing of the Agreement do not and will not on the Closing Date (i) conflict, contravene or violate any provision of Purchaser's

  

  

  

Certificate of Incorporation or By-Laws or any resolution adopted by the board of directors of Purchaser; (ii) result in a breach by Purchaser, or constitute a default under, or permit the termination of, or cause the acceleration of the maturity of, any of the terms, conditions, or provisions of any contract to which Purchaser is a party
or by which Purchaser or its assets may be bound or affected; (iii) violate any statute, law, regulation, judgment, order, writ, injunction, decree or demand of any court or Federal, state, municipal, or other governmental department, commission, board, bureau, agency or instrumentality, to which Purchaser is named as a party; or (iv) result in the creation or imposition of any lien, charge, or encumbrance of any nature whatsoever.

4.3           Authorization.  Purchaser has full corporate power and authority to enter into this Agreement and any contract provided for herein and to carry out
the Agreement. The board of directors of Purchaser has duly authorized and approved the execution, delivery and performance of this Agreement, each contract and document provided for herein, and no other corporate proceedings on the part of Purchaser are necessary to authorize and approve such execution, delivery and performance. This Agreement and each contract provided for herein to which Purchaser is a party has been duly executed and delivered by Purchaser and constitutes the valid and binding agreement of
Purchaser enforceable against it in accordance with its terms (except as may be limited by applicable bankruptcy laws or similar laws affecting creditors' rights generally).

4.4           No Brokers, Finders, Etc.  Purchaser has not dealt with any broker, finder or other person who performed brokerage, finder or other similar services
in connection with this Agreement, and does not know of any person that has any basis for claiming any brokerage, finders or similar fees against Purchaser in connection with this Agreement.

5.           Documents to be Delivered at Closing.

5.1           By or on Behalf of Seller.  At the Closing, Seller will cause the following items to be delivered to Purchaser:

(a)  One or more bills of sale, in form and substance reasonably satisfactory to Purchaser, conveying in the aggregate all of the Purchased Assets.

(b)  One or more consents to assign or assignments of Intellectual Property and executory contracts (set forth in Exhibit 1.1), in form and substance reasonably 

          satisfactory to Purchaser, duly executed by Seller;

(c)  Evidence that all liens, if any, on the Purchased Assets have been released.

(d) A Certificate executed by the Secretary of Seller (1) identifying those persons who are the officers and directors of Seller as of the Closing Date and (2) certifying

           resolutions of the board of directors and shareholders of Seller approving this Agreement and authorizing the consummation
of the Agreement.

(e)  Any other documents signed by the appropriate officers and directors of Seller requested by Purchaser and necessary or desirable in order to accomplish the

           Closing of the Agreement.

  

  

  

5.2           By or on Behalf of Purchaser.  At the Closing, Purchaser will cause the following items to be delivered to Seller:

(a)  The Purchase Price.

(b)  Employment Agreement for Diane Craver.

(c)  A certificate executed by the Secretary of Purchaser (i) identifying those persons who are the officers and directors of Purchaser as of the Closing Date and (ii) 

          certifying resolutions of the board of directors of Purchaser approving this Agreement and authorizing the consummation of the Agreement.

(d)  Any other documents signed by the appropriate officers and directors of Purchaser requested by Seller and necessary or desirable in order to accomplish the

           Closing of the Agreement.

5.3           Due Diligence.   As a condition precedent to Closing, Purchase and Seller shall be satisfied with their findings and evaluation in their due diligence.

6.           Post Closing Covenants.  From and after the Closing Date:

6.1           Further Assurances by Seller.  The Seller will, upon request of Purchaser from time to time, execute and deliver, and use its best efforts to cause
other persons to execute and deliver, to Purchaser all such further documents and instruments, and will do such other acts, as Purchaser may reasonably request more completely to consummate and make effective the Closing of the Agreement.

6.2           Further Assurances by Purchaser.  Purchaser will, upon request of Seller from time to time, execute and deliver, and use its Best Efforts to cause other
persons to execute and deliver, to Seller all such further documents and instruments, and will do such other acts, as Seller may reasonably request more completely to consummate and make effective the Closing of the Agreement.

6.3           Communication with Clients.  If Purchaser requests, Seller shall deliver to Purchaser, or directly to Seller's clients, a letter executed by Seller
in form and substance acceptable to Purchaser pursuant to which Seller shall advise each addressee that the Seller's business has been transferred to Purchaser.

7.           Indemnification.

7.1           By Seller.  Seller agrees to indemnify, defend, release and hold Purchaser, its affiliates, subsidiaries or related companies, and their officers, directors,
employees, representatives and agents, harmless from and against any and all damages, losses (including loss of goodwill and damage to reputation), penalties, interest obligations, tax liabilities and other liabilities, claims, judgments, causes of action, deficiencies, costs and expenses (including reasonable attorneys' fees and other costs) (collectively, "Claims"), asserted against or incurred or required to be paid by Purchaser or any other indemnified person on account of or incident or pursuant to: (a)
breach of any representation, warranty, covenant or agreement made by Seller in this Agreement or in any Contract or document

  

  

  

delivered pursuant to or in connection with this Agreement; (b) the operation of Seller's business or the ownership, maintenance, use or operation of Seller's assets prior to the Closing; (c) the failure of Seller to comply with applicable bulk transfer laws, to the extent such failure causes Purchaser to be liable for liabilities of Seller
other than the liabilities which Purchaser specifically assumes pursuant to this Agreement; and (d) any and all lawsuits against Seller or involving any of the assets of Seller which are based on a cause of action arising before the Closing Date.

7.2           By Purchaser.  Purchaser agrees to indemnify, defend, release and hold Seller and Seller's officers, directors, employees, representatives and agents
harmless from and against any and all Claims asserted against, incurred or required to be paid by Seller or any other indemnified person on account of or incident to: (a) breach of any representation, warranty, covenant or agreement made by Purchaser in this Agreement or in any contract or document delivered pursuant to or in connection with this Agreement; (b) the business or operations of Purchaser before, at or after the date of this Agreement; and (c) the ownership, maintenance, use or operation of the Purchased
Assets after the Closing.

7.3           Indemnification Procedure.

(a)  Notice. With respect to any matter for which indemnification is claimed pursuant to Section 7.1, the indemnified person(s) will notify Seller in writing promptly after becoming aware of such matter. With respect
to any matter for which indemnification is claimed pursuant to Section 7.2, the indemnified person(s) will notify Purchaser in writing promptly after becoming aware of such matter.  A failure or delay to promptly notify an indemnifying person of a Claim will only relieve such person of its obligation pursuant to this Section 8 to the extent, if at all, that such person is prejudiced by reason of such failure or delay.

(b)  Defense of Claim.  Promptly after receipt of any notice pursuant to Section 7.3(a), the indemnifying person(s) shall defend, contest, settle, compromise or otherwise protect the indemnified person(s) against
any such Claim at its (their) own cost and expense.  Each indemnified person will have the right, but not the obligation, to participate, at its own expense, in the defense by counsel of its own choosing; provided, however, that the indemnifying person will be entitled to control the defense unless the indemnified person has relieved the indemnifying person in writing from liability with respect to the particular matter.  The indemnified person shall reasonably cooperate with the indemnifying
person's requests, and at the indemnifying person's expense (including, but not limited to, indemnifying person's paying or reimbursing the indemnified person's reasonable attorneys' fees and investigation expenses), concerning the defense of the Claim.

(c)  Failure to Defend.  If the indemnifying person does not timely defend, contest or otherwise protect against a Claim after receipt of the required notice, the indemnified person will have the right, but
not the obligation, to defend, contest or otherwise protect against the same, make any compromise or settlement thereof, and recover the entire cost thereof from the indemnifying person, including, without limitation, reasonable attorneys' fees, disbursements and all amounts paid as a result of such suit, action, investigation and Claim.

(d)  Right of Set-Off.  Purchaser may, in addition to any other remedy available to Purchaser at law or in equity, withhold and set-off against any and all amounts payable to Seller with

  

  

  

respect to the Deferred Payment and/or the Consulting Agreement any amounts for which Purchaser is due indemnification pursuant to this Agreement. Any claim by Purchaser for such a set off shall be made in good faith, and Purchaser shall not set off more than the amount reasonably claimed. Purchaser shall not assert a right of set-off pursuant
to this Section 8.3 unless Purchaser shall have previously (i) given the notice required pursuant to Section 8.3 with respect to the indemnification claim at issue and (ii) afforded the indemnifying person(s) an opportunity to satisfy or compromise such indemnification claim or otherwise cure the breach associated therewith.

7.4           Survival of Representations and Warranties.  Notwithstanding anything in this Agreement to the contrary, the representations and warranties of the parties
contained in this Agreement shall survive the Closing for a period of two (2) years only.

8.           Miscellaneous.

8.1           Notices.  Any notice or other communication given or made pursuant to this agreement must be in writing and shall be delivered to the party to whom
intended at the address set forth above (or at such other address as such party may designate by proper notice) by personal delivery, by fax, by nationally recognized courier, or by certified or registered mail, postage prepaid, and shall be deemed given when personally delivered or sent by fax or two (2) business days after deposit with a courier or five (5) business days after mailing. Copies of all notices shall be given to:

For Seller:

Diane Craver, President

PeopleSource, Inc.

1399 Ashleybrook Lane, Suite 230

Winston-Salem, NC 27103

or

D. Clark Smith

Smith Moore Leatherwood LLP

300 North Greene St

Greensboro, NC  27401

or such other address as may be designated by Seller from time to time.

For Purchaser:

Mark Elliott, President

Premier Alliance Group, Inc.

4521 Sharon Road, Suite 300

Charlotte NC 28211

Tel.  704-521-8077

or

Michael H. Freedman

Law Offices of Michael H. Freedman, PLLC

394 White Birch Lane

Jericho, NY 11753

Tel. 516-767-1697

Fax 877-315-1908

  

  

  

or such other address as may be designated by Purchaser from time to time and

8.2           Entire Agreement.  This Agreement represents the entire agreement among the parties regarding the subject matter hereof and supersedes in all respects
any and all prior oral or written agreements or understandings among them pertaining to the subject matter of this Agreement (including, but not limited to, that certain letter of intent dated July 29, 2009 between Seller and Purchaser).  There are no representations, warranties or covenants among the parties with respect to the subject matter of this Agreement, except as set forth in this Agreement.  This Agreement cannot be modified or terminated, nor may any of its provisions be waived,
except by a written instrument signed by the party(ies) against which enforcement is sought.  Any waiver by any party of the strict performance of any of the terms, conditions and provisions of this Agreement shall not be construed as a waiver thereof for the future, but shall be considered a waiver only in the particular instance, for the particular purpose, and at the time when and for which it is given.

8.3           Governing Law.  This Agreement has been made and entered into in the State of North Carolina and shall be governed by and construed and enforced in
accordance with the internal substantive laws of the State of North Carolina.

8.4           Successors; Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the respective parties, their successors, assigns, heirs,
legatees, executors, administrators and legal representatives ("Successors") and any Successor shall be deemed a party to this Agreement upon such Successor's receipt of any interest in this Agreement. Whenever a party is referred to in this Agreement, such reference shall include reference to such party's Successors.

8.5           Captions.  Headings contained in this Agreement have been inserted for reference purposes only and shall not be considered part of this Agreement in
construing this Agreement.

8.6           Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall
be deemed to be one and the same instrument. This Agreement shall become effective when one or more counterparts have been signed by each of the parties and delivered to each of the other parties.

8.7           Severability.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions
of this Agreement.

8.8           Terminology.  Unless the context clearly indicates otherwise, terms used in this Agreement in the masculine include the feminine and the neuter, terms
used in the singular include the plural and terms used in the plural include the singular.

  

  

  

IN WITNESS WHEREOF, this Agreement has been executed by each of the parties as of the date stated at the beginning of this Agreement.

PREMIER ALLIANCE GROUP, INC.

By: _/s/ Mark Elliott___________________

Mark Elliott, President

PEOPLESOURCE, INC.

By: _/s/ Diane Craver___________________

Diane Craver, PresidentEX-10.1

EXIDE TECHNOLOGIES

2009 Stock Incentive Plan

1. Purpose. The purpose of the 2009 Stock Incentive Plan is to attract and retain non-employee
directors, officers, key employees and certain consultants of Exide Technologies, a Delaware
corporation, and its Subsidiaries and to provide to such persons incentives and rewards for
superior performance.

2. Definitions. As used in this Plan,

(a) “Appreciation Right” means a right granted pursuant to Section 5 or Section 9 of
this Plan, and will include both Tandem Appreciation Rights and Free-Standing Appreciation Rights.

(b) “Base Price” means the price to be used as the basis for determining the Spread
upon the exercise of a Free-Standing Appreciation Right or a Tandem Appreciation Right.

(c) “Board” means the Board of Directors of the Company and, to the extent of any
delegation by the Board to a committee (or subcommittee thereof) pursuant to Section 14 of this
Plan, such committee (or subcommittee).

(d) “Cash Award” means a bonus opportunity awarded under Section 11 of the Plan
pursuant to which a Participant may become entitled to receive an amount based on the satisfaction
of such performance criteria as are specified in the agreement or, if no agreement is entered into
with respect to the Cash Award, other documents evidencing the award (the “Cash Award
Agreement”).

(e) “Change in Control” has the meaning set forth in Section 15 of this Plan.

(f) “Code” means the Internal Revenue Code of 1986, as amended from time to time.

(g) “Common Stock” means the shares of common stock, par value $0.01 per share, of the
Company or any security into which such shares of Common Stock may be changed by reason of any
transaction or event of the type referred to in Section 13 of this Plan.

(h) “Company” means Exide Technologies, a Delaware corporation.

(i) “Continuous Service” refers to the absence of any interruption or termination of
service as an employee, Director or consultant. Continuous Service shall not be considered
interrupted in the case of (i) sick leave; (ii) military leave; (iii) any other leave of absence
approved by the Board, provided that such leave is for a period of not more than 90 days, unless
reemployment upon the expiration of such leave is guaranteed by contract or applicable law, or
unless provided otherwise pursuant to Company policy, as adopted from time to time; or (iv) in the
case of transfer between locations of the Company or between the Company, its Subsidiaries or their
respective successors. Changes in status between service as an employee, a Director and a
consultant will not constitute an interruption of Continuous Service.

(j) “Covered Employee” means a Participant who is, or is determined by the Board to be
likely to become, a “covered employee” within the meaning of Section 162(m) of the Code (or any
successor provision).

(k) “Date of Grant” means the date specified by the Board on which a grant of Option
Rights, Appreciation Rights, Performance Shares, Performance Units, a grant or sale of Restricted
Stock, Restricted Stock Units, or other awards contemplated by Section 10 of this Plan will become
effective (which date will not be earlier than the date on which the Board takes action with
respect thereto).

(l) “Detrimental Activity” means, unless otherwise defined by the Board:

(i) Engaging in any activity, as an employee, principal, agent, or consultant for another
entity that competes with the Company in any actual, researched, or prospective product, service,
system, or business activity for which the Participant has had any direct responsibility during the
last two years of his or her employment with the Company or a Subsidiary, in any territory in which
the Company or a Subsidiary manufactures, sells, markets, services, installs or utilizes such
product, service, or system, or engages in such business activity.

(ii) Soliciting any employee of the Company or a Subsidiary to terminate his or her employment
with the Company or a Subsidiary.

(iii) The disclosure (unless required by applicable law) to anyone outside the Company or a
Subsidiary, or the use in other than the Company’s or a Subsidiary’s business, without prior
written authorization from the Company, of any confidential, proprietary or trade secret
information or material relating to the business of the Company and its Subsidiaries, acquired by
the Participant during his or her employment with the Company or its Subsidiaries or while acting
as a director of or consultant for the Company or its Subsidiaries thereafter.

(iv) The failure or refusal to disclose promptly and to assign to the Company upon request all
right, title and interest in any invention or idea, patentable or not, made or conceived by the
Participant during employment by the Company and any Subsidiary, relating in any manner to the
actual or anticipated business, research or development work of the Company or any Subsidiary or
the failure or refusal to do anything reasonably necessary to enable the Company or any Subsidiary
to secure a patent where appropriate in the United States and in other countries.

(v) Activity that results in Termination for Cause. For the purposes of this Section,
“Termination for Cause” shall mean a termination:

(A) due to the Participant’s willful and continuous failure to substantially perform the
duties for which he or she is employed,

(B) due to the Participant’s willful violation of a material Company policy,

(C) due to the Participant’s commission of any material act or acts of fraud, embezzlement,
dishonesty or other willful misconduct,

(D) due to the Participant’s willful and material breach of any of his or her obligations
under any written agreement or covenant with the Company, or

(E) due to an act of dishonesty on the part of the Participant resulting or intended to
result, directly or indirectly, in his or her gain for personal enrichment at the expense of the
Company or a Subsidiary.

The Committee may in its discretion determine whether a Participant’s termination is a
Termination for Cause. The Committee’s determination shall be final and binding upon the
Participant, the Company and all other affected persons. The definition herein of “Termination for
Cause” shall not in any way limit the Company’s ability to terminate a Participant’s employment at
any time.

(vi) Any other conduct or act determined to be injurious, detrimental or prejudicial to any
significant interest of the Company or any Subsidiary unless the Participant acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the best interests of the
Company.

(m) “Director” means a member of the Board of Directors of the Company.

(n) “Effective Date” means the date that this Plan is approved by the stockholders of
the Company.

(o) “Evidence of Award” means an agreement, certificate, resolution or other type or
form of writing or other evidence approved by the Board that sets forth the terms and conditions of
the awards granted. An Evidence of Award may be in an electronic medium, may be limited to notation
on the books and records of the Company and, unless otherwise determined by the Board, need not be
signed by a representative of the Company or a Participant.

(p) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder, as such law, rules and regulations may be amended from time to
time.

(q) “Existing Plans” means the Exide Technologies 2004 Stock Incentive Plan and the
Exide Technologies 2004 Stock Incentive Plan as amended and restated effective August 22, 2007.

(r) “Free-Standing Appreciation Right” means an Appreciation Right granted pursuant to
Section 5 or Section 9 of this Plan that is not granted in tandem with an Option Right.

(s) “Incentive Stock Options” means Option Rights that are intended to qualify as
“incentive stock options” under Section 422 of the Code or any successor provision.

(t) “Management Objectives” means one or more of the following selected by the Board
to measure Company, affiliate, and/or business unit performance for a Performance Period, whether
in absolute or relative terms (including, without limitation, terms relative to a peer group or
index): basic, diluted, or adjusted earnings per share; free cash flow; operating cash flow; sales
or revenue; earnings before interest, taxes, and other adjustments (in total or on a per share
basis); basic or adjusted net income; returns on equity, assets, capital, revenue or similar
measure; economic value added; working capital; total shareholder return; and product development,
product market share, research, licensing, litigation, human resources, information services,
mergers, acquisitions, sales of assets of affiliates or business units. Each such measure shall be
to the extent applicable, determined in accordance with generally accepted accounting principles as
consistently applied by the Company (or such other standard applied by the Committee) and, if so
determined by the Board, and in the case of a Qualified Performance-Based Award, to the extent
permitted under Section 162(m) of the Code, adjusted to omit the effects of extraordinary items,
gain or loss on the disposal of a business segment, unusual or infrequently occurring events and
transactions and cumulative effects of changes in accounting principles. Management Objectives may
vary from Performance Period to Performance Period and from Participant to Participant, and may be
established on a stand-alone basis, in tandem or in the alternative.

(u) “Market Value per Share” means as of any particular date (the “Determination
Date”), the following:

(i) Prior to May 5, 2011, (a) the average closing price of the Common Stock for the ten
consecutive trading days immediately preceding, but not including, the Determination Date as
reported on the Nasdaq Stock Market; or (b) if such shares of Common Stock are not traded on the
Nasdaq Stock Market but are quoted on the New York Stock Exchange or the American Stock Exchange,
or a successor system, the average closing price of the Common Stock for the ten consecutive
trading days immediate preceding, but not including, the Determination Date; or (c) if such shares
of Common Stock are not traded on the Nasdaq Stock Market or on any other national securities
exchange, but are otherwise traded in the over-the-counter market, the average mean between the
representative bid and asked prices for the ten consecutive trading days immediately preceding, but
not including, the Determination Date; or (d) if subsections (a) through (c) hereof do not apply,
the fair market value established in good faith by the Board. Notwithstanding the previous
sentence, in the event the Market Value per Share, as calculated under subsections (a) through (d)
hereof, is less than the closing price of the Common Stock on the Date of Grant, then the Market
Value per Share shall be equal to the closing price of the Common Stock on the Date of Grant.

(ii) Effective May 5, 2011, the closing sale price of the Common Stock as reported on the
Nasdaq Stock Market or, if not listed on such exchange, on any other national securities exchange
on which the Common Stock is listed. If the Common Stock is not traded as of any given date, the
Market Value per Share means the closing price for the Common Stock on the principal exchange on
which the Common Stock is traded for the immediately preceding date on which the Common Stock was
traded. If there is no regular public trading market for the Common Stock, the Market Value per
Share of the Common Stock shall be the fair market value of the Common Stock as determined in good
faith by the Board.

(iii) The Board is authorized to adopt another fair market value pricing method, including,
but not limited to, the method set forth in subsection (i) hereof, provided such method is stated
in the Evidence of Award, and is in compliance with the fair market value pricing rules set forth
in Section 409A of the Code.

(v) “Non-Employee Director” means a person who is a “Non-Employee Director” of the
Company within the meaning of Rule 16b-3 of the Securities and Exchange Commission promulgated
under the Exchange Act.

(w) “Optionee” means the optionee named in an Evidence of Award evidencing an
outstanding Option Right.

(x) “Option Price” means the purchase price payable on exercise of an Option Right.

(y) “Option Right” means the right to purchase shares of Common Stock upon exercise of
an option granted pursuant to Section 4 or Section 9 of this Plan.

(z) “Participant” means a person who is selected by the Board to receive benefits
under this Plan and who is at the time an officer, key employee or consultant of the Company or any
one or more of its Subsidiaries, or who has agreed to commence serving in any of such capacities
within 90 days of the Date of Grant, and will also include each Non-Employee Director who receives
or an award of Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units or
other awards under this Plan. The term “Participant” shall also include any person who provides
services to the Company or a Subsidiary that are equivalent to those typically provided by an
employee.

(aa) “Performance Period” means, in respect of a Performance Share or Performance
Unit, a period of time established pursuant to Section 8 of this Plan within which the Management
Objectives relating to such Performance Share or Performance Unit are to be achieved.

(bb) “Performance Share” means a bookkeeping entry that records the equivalent of one
Common Share awarded pursuant to Section 8 of this Plan.

(cc) “Performance Unit” means a bookkeeping entry awarded pursuant to Section 8 of
this Plan that records a unit equivalent to $1.00 or such other value as is determined by the
Board.

(dd) “Plan” means this Exide Technologies 2009 Stock Incentive Plan.

(ee) “Qualified Performance-Based Award” means any award or portion of an award that
is intended to satisfy the requirements for “qualified performance-based compensation” under
Section 162(m) of the Code.

(ff) “Restricted Stock” means shares of Common Stock granted or sold pursuant to
Section 6 or Section 9 of this Plan as to which neither the substantial risk of forfeiture nor the
prohibition on transfers referred to in such Section 6 or 9 has expired.

(gg) “Restriction Period” means the period of time during which Restricted Stock Units
are subject to restrictions, as provided in Section 7 or Section 9 of this Plan.

(hh) “Restricted Stock Unit” means an award made pursuant to Section 7 or Section 9 of
this Plan of the right to receive shares of Common Stock or cash at the end of a specified period.

(ii) “Spread” means the excess of the Market Value per Share on the date when an
Appreciation Right is exercised, or on the date when Option Rights are surrendered in payment of
the Option Price of other Option Rights, over the Option Price or Base Price provided for in the
related Option Right or Free-Standing Appreciation Right, respectively.

(jj) “Subsidiary” means a corporation, company or other entity (i) more than 50
percent of whose outstanding shares or securities (representing the right to vote for the election
of directors or other managing authority) are, or (ii) which does not have outstanding shares or
securities (as may be the case in a partnership, joint venture or unincorporated association), but
more than 50 percent of whose ownership interest representing the right generally to make decisions
for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the
Company except that for purposes of determining whether any person may be a Participant for
purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation in which at
the time the Company owns or controls, directly or indirectly, more than 50 percent of the total
combined voting power represented by all classes of stock issued by such corporation.

(kk) “Tandem Appreciation Right” means an Appreciation Right granted pursuant to
Section 5 or Section 9 of this Plan that is granted in tandem with an Option Right.

3. Shares Available Under the Plan.

(a) Maximum Shares Available Under Plan.

(i) Subject to adjustment as provided in Section 13 of this Plan, the number of shares of
Common Stock that may be issued or transferred (A) upon the exercise of Option Rights or
Appreciation Rights, (B) in payment of Restricted Stock and released from substantial risks of
forfeiture thereof, (C) in payment of Restricted Stock Units, (D) in payment of Performance Shares
or Performance Units that have been earned, (E) as awards to Non-Employee Directors, (F) as awards
contemplated by Section 10 of this Plan, or (G) in payment of dividend equivalents paid with
respect to awards made under the Plan, will not exceed in the aggregate 4,000,000 shares of Common
Stock. Such shares may be shares of original issuance or treasury shares or a combination of the
foregoing.

(ii) Shares of Common Stock covered by an award granted under the Plan shall not be
counted as used unless and until they are actually issued and delivered to a Participant and,
therefore, the total number of shares available under the Plan as of a given date shall not be
reduced by any shares relating to prior awards that have expired or have been forfeited or
cancelled, and upon payment in cash of the benefit provided by any award granted under the Plan,
any shares of Common Stock that were covered by that award will be available for issue or
transfer hereunder. Notwithstanding anything to the contrary contained herein: (A) if shares
of Common Stock are tendered or otherwise used in payment of the Option Price of an Option
Right, the total number of shares covered by the Option Right being exercised shall reduce the
aggregate plan limit described above; (B) shares of Common Stock withheld by the Company to satisfy
the tax withholding obligation shall count against the aggregate plan limit described above; and
(C) the number of shares of Common Stock covered by an Appreciation Right, to the extent that it is
exercised and settled in shares of Common Stock, and whether or not shares are actually issued to
the Participant upon exercise of the Appreciation Right, shall be considered issued or transferred
pursuant to the Plan. In the event that the Company repurchases shares with Option Right proceeds,
those shares will not be added to the aggregate plan limit described above. If, under this Plan, a
Participant has elected to give up the right to receive compensation in exchange for shares of
Common Stock based on fair market value, such shares of Common Stock will not count against the
aggregate plan limit described above

(b) Life of Plan Limits. Notwithstanding anything in this Section 3, or elsewhere in this
Plan, to the contrary, and subject to adjustment as provided in Section 13 of this Plan:

(i) The aggregate number of shares of Common Stock actually issued or transferred by the
Company upon the exercise of Incentive Stock Options will not exceed 4,000,000 shares of Common
Stock; and

(ii) The number of shares of Common Stock issued as Restricted Stock, Restricted Stock Units,
Performance Shares and Performance Units and other awards under Section 10 of this Plan (after
taking into account any forfeitures and cancellations) will not during the life of the Plan exceed
4,000,000 shares of Common Stock in the aggregate;

(iii) Awards will not be granted under Section 9 or Section 10 of the Plan to the extent they
would involve the issuance of more than 4,000,000 shares in the aggregate; and

(iv) The aggregate maximum value as of the Date of Grant of Cash Awards granted under this
Plan during any fiscal year of the Company to any one Participant on or after the Effective Date
shall not exceed U.S. $3,000,000.

(c) Individual Participant Limits. Notwithstanding anything in this Section 3, or elsewhere in
this Plan, to the contrary, and subject to adjustment as provided in Section 13 of this Plan:

(i) No Participant will be granted Option Rights or Appreciation Rights, in the aggregate, for
more than 1,000,000 shares of Common Stock during any calendar year;

(ii) No Participant will be granted Qualified Performance Based Awards of Restricted Stock,
Restricted Stock Units, Performance Shares or other awards under Section 10 of this Plan, in the
aggregate, for more than 800,000 shares of Common Stock during any calendar year; and

(iii) In no event will any Participant in any calendar year receive a Qualified
Performance-Based Award of Performance Units having an aggregate maximum value as of their
respective Dates of Grant in excess of $3,000,000.

4. Option Rights. The Board may, from time to time and upon such terms and conditions as it
may determine, authorize the granting to Participants of options to purchase shares of Common
Stock. Each such grant may utilize any or all of the authorizations, and will be subject to all of
the requirements contained in the following provisions:

(a) Each grant will specify the number of shares of Common Stock to which it pertains subject
to the limitations set forth in Section 3 of this Plan.

(b) Each grant will specify an Option Price per share, which may not be less than the Market
Value per Share on the Date of Grant.

(c) Each grant will specify whether the Option Price will be payable (i) in cash or by check
acceptable to the Company or by wire transfer of immediately available funds, (ii) by the actual or
constructive transfer to the Company of shares of Common Stock owned by the Optionee (or other
consideration authorized pursuant to Section 4(d)) having a value at the time of exercise equal to
the total Option Price, (iii) by a combination of such methods of payment, or (iv) by such other
methods as may be approved by the Board.

(d) To the extent permitted by law, any grant may provide for deferred payment of the Option
Price from the proceeds of sale through a broker on a date satisfactory to the Company of some or
all of the shares to which such exercise relates.

(e) Successive grants may be made to the same Participant whether or not any Option Rights
previously granted to such Participant remain unexercised.

(f) Each grant will specify the period or periods of Continuous Service by the Optionee with
the Company or any Subsidiary that is necessary before the Option Rights or installments thereof
will become exercisable. A grant of Option Rights may provide for the earlier exercise of such
Option Rights in the event of the retirement, death or disability of a Participant, a Change in
Control or other sufficient reason.

(g) Any grant of Option Rights may specify Management Objectives that must be achieved as a
condition to the exercise of such rights.

(h) Option Rights granted under this Plan may be (i) options, including, without limitation,
Incentive Stock Options, that are intended to qualify under particular provisions of the Code, (ii)
options that are not intended so to qualify, or (iii) combinations of the foregoing. Incentive
Stock Options may only be granted to Participants who meet the definition of “employees” under
Section 3401(c) of the Code.

(i) The exercise of an Option Right will result in the cancellation on a share- for-share
basis of any Tandem Appreciation Right authorized under Section 5 of this Plan.

(j) No Option Right will be exercisable more than 10 years from the Date of Grant.

(k) To the extent permitted by Section 409A of the Code, the Board reserves the discretion at
or after the Date of Grant to provide for (i) the payment of a cash bonus at the time of exercise,
(ii) the availability of a loan at exercise, and (iii) the right to tender in satisfaction of the
Option Price nonforfeitable, unrestricted shares of Common Stock, which are already owned by the
Optionee and have a value at the time of exercise that is equal to the Option Price.

(l) The Board may substitute, without receiving Participant permission, Appreciation Rights
payable only in shares of Common Stock (or Appreciation Rights payable in shares of Common Stock or
cash, or a combination of both, at the Board’s discretion) for outstanding Options;
provided, however, that the terms of the substituted Appreciation Rights are
substantially the same as the terms for the Options and the difference between the Market Value Per
Share of the underlying shares of Common Stock and the Base Price of the Appreciation Rights is
equivalent to the difference between the Market Value Per Share of the underlying shares of Common
Stock and the Option Price of the Options. If, in the opinion of the Company’s auditors, this
provision creates adverse accounting consequences for the Company, it shall be considered null and
void.

(m) Each grant of Option Rights will be evidenced by an Evidence of Award. Each Evidence of
Award shall be subject to the Plan and shall contain such terms and provisions as the Board may
approve.

5. Appreciation Rights.

(a) The Board may, from time to time and upon such terms and conditions as it may determine,
authorize the granting (i) to any Optionee, of Tandem Appreciation Rights in respect of Option
Rights granted hereunder, and (ii) to any Participant, of Free-Standing Appreciation Rights. A
Tandem Appreciation Right will be a right of the Optionee, exercisable by surrender of the related
Option Right, to receive from the Company an amount determined by the Board, which will be
expressed as a percentage of the Spread (not exceeding 100 percent) at the time of exercise. Tandem
Appreciation Rights may be granted at any time prior to the exercise or termination of the related
Option Rights; provided, however, that a Tandem Appreciation Right awarded in
relation to an Incentive Stock Option must be granted concurrently with such Incentive Stock
Option. A Free-Standing Appreciation Right will be a right of the Participant to receive from the
Company an amount determined by the Board, which will be expressed as a percentage of the Spread
(not exceeding 100 percent) at the time of exercise.

(b) Each grant of Appreciation Rights may utilize any or all of the authorizations, and will
be subject to all of the requirements, contained in the following provisions:

(i) Any grant may specify that the amount payable on exercise of an Appreciation Right may be
paid by the Company in cash, in shares of Common Stock or in any combination thereof and may either
grant to the Participant or retain in the Board the right to elect among those alternatives.

(ii) Any grant may specify that the amount payable on exercise of an Appreciation Right may
not exceed a maximum specified by the Board at the Date of Grant.

(iii) Any grant may specify waiting periods before exercise and permissible exercise dates or
periods.

(iv) Any grant may specify that such Appreciation Rights may be exercised only in the event
of, or earlier in the event of, the retirement, death or disability of a Participant, a Change in
Control or other sufficient reason.

(v) Any grant may provide for the payment to the Participant of dividend equivalents thereon
in cash or shares of Common Stock on a current, deferred or contingent basis.

(vi) Any grant of Appreciation Rights may specify Management Objectives that must be achieved
as a condition of the exercise of such Appreciation Rights.

(vii) Each grant of Appreciation Rights will be evidenced by an Evidence of Award, which
Evidence of Award will describe such Appreciation Rights, identify the related Option Rights (if
applicable), and contain such other terms and provisions, consistent with this Plan, as the Board
may approve.

(c) Any grant of Tandem Appreciation Rights will provide that such Tandem Appreciation Rights
may be exercised only at a time when the related Option Right is also exercisable and at a time
when the Spread is positive, and by surrender of the related Option Right for cancellation.

(d) Regarding Free-Standing Appreciation Rights only:

(i) Each grant will specify in respect of each Free-Standing Appreciation Right a Base Price,
which will be equal to or greater than the Market Value per Share on the Date of Grant;

(ii) Successive grants may be made to the same Participant regardless of whether any
Free-Standing Appreciation Rights previously granted to the Participant remain unexercised; and

(iii) No Free-Standing Appreciation Right granted under this Plan may be exercised more than
10 years from the Date of Grant.

6. Restricted Stock. The Board may, from time to time and upon such terms and conditions as it
may determine, also authorize the grant or sale of Restricted Stock to Participants. Each such
grant or sale may utilize any or all of the authorizations, and will be subject to all of the
requirements, contained in the following provisions:

(a) Each such grant or sale will constitute an immediate transfer of the ownership of shares
of Common Stock to the Participant in consideration of the performance of services, entitling such
Participant to voting, dividend and other ownership rights, but subject to the substantial risk of
forfeiture and restrictions on transfer hereinafter referred to.

(b) Each such grant or sale may be made without additional consideration or in consideration
of a payment by such Participant that is less than the Market Value per Share at the Date of Grant.

(c) Each such grant or sale will provide that the Restricted Stock covered by such grant or
sale that vests upon the passage of time will be subject to a “substantial risk of forfeiture”
within the meaning of Section 83 of the Code for a period to be determined by the Board at the Date
of Grant or upon achievement of Management Objectives referred to in subparagraph (e) below. If the
elimination of restrictions is based only on the passage of time rather than the achievement of
Management Objectives, the period of time will be no shorter than three years, except that the
restrictions may be removed ratably during the three-year period, on an annual basis, as determined
by the Board at the Date of Grant.

(d) Each such grant or sale will provide that during or after the period for which such
substantial risk of forfeiture is to continue, the transferability of the Restricted Stock will be
prohibited or restricted in the manner and to the extent prescribed by the Board at the Date of
Grant (which restrictions may include, without limitation, rights of repurchase or first refusal in
the Company or provisions subjecting the Restricted Stock to a continuing substantial risk of
forfeiture in the hands of any transferee).

(e) Any grant of Restricted Stock may specify Management Objectives that, if achieved, will
result in termination or early termination of the restrictions applicable to such Restricted Stock;
provided, however, that, notwithstanding subparagraph (c) above, restrictions
relating to Restricted Stock that vests upon the achievement of Management Objectives, may not
terminate sooner than one year from the Date of Grant. Each grant may specify in respect of such
Management Objectives a minimum acceptable level of achievement and may set forth a formula for
determining the number of shares of Restricted Stock on which restrictions will terminate if
performance is at or above the minimum or threshold level or levels, or is at or above the target
level or levels, but falls short of maximum achievement of the specified Management Objectives.

(f) Notwithstanding anything to the contrary contained in this Plan, any grant or sale of
Restricted Stock may provide for the earlier termination of restrictions on such Restricted Stock
in the event of the retirement, death or disability of a Participant, or a Change in Control or
other sufficient reason.

(g) Any such grant or sale of Restricted Stock may require that any or all dividends or other
distributions paid thereon during the period of such restrictions be automatically deferred and
reinvested in additional shares of Restricted Stock, which may be subject to the same restrictions
as the underlying award.

(h) Each grant or sale of Restricted Stock will be evidenced by an Evidence of Award and will
contain such terms and provisions, consistent with this Plan, as the Board may approve. Unless
otherwise directed by the Board, (i) all certificates representing shares of Restricted Stock will
be held in custody by the Company until all restrictions thereon will have lapsed, together with a
stock power or powers executed by the Participant in whose name such certificates are registered,
endorsed in blank and covering such Shares, or (ii) all shares of Restricted Stock will be held at
the Company’s transfer agent in book entry form with appropriate restrictions relating to the
transfer of such shares of Restricted Stock.

7. Restricted Stock Units. The Board may, from time to time and upon such terms and conditions
as it may determine, also authorize the granting or sale of Restricted Stock Units to Participants.
Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of
the requirements contained in the following provisions:

(a) Each such grant or sale will constitute the agreement by the Company to deliver shares of
Common Stock or cash to the Participant in the future in consideration of the performance of
services, but subject to the fulfillment of such conditions (which may include the achievement of
Management Objectives) during the Restriction Period as the Board may specify. If a grant of
Restricted Stock Units specifies that the Restriction Period will terminate only upon the
achievement of Management Objectives then, notwithstanding anything to the contrary contained in
subparagraph (c) below, such Restriction Period may not terminate sooner than one year from the
Date of Grant. Each grant may specify in respect of such Management Objectives a minimum acceptable
level of achievement and may set forth a formula for determining the number of shares of Restricted
Stock on which restrictions will terminate if performance is at or above the minimum or threshold
level or levels, or is at or above the target level or levels, but falls short of maximum
achievement of the specified Management Objectives.

(b) Each such grant or sale may be made without additional consideration or in consideration
of a payment by such Participant that is less than the Market Value per Share at the Date of Grant.

(c) If the Restriction Period lapses only by the passage of time rather than the achievement
of Management Objectives as provided in subparagraph (a) above, each such grant or sale will be
subject to a Restriction Period of not less than three years, except that a grant or sale may
provide that the Restriction Period will expire ratably during the three-year period, on an annual
basis, as determined by the Board at the Date of Grant.

(d) Notwithstanding anything to the contrary contained in this Plan, any grant or sale of
Restricted Stock Units may provide for the earlier lapse or modification of the Restriction Period
in the event of the retirement, death or disability of a Participant, or a Change in Control or
other sufficient reason.

(e) During the Restriction Period, the Participant will have no right to transfer any rights
under his or her award and will have no rights of ownership in the Restricted Stock Units and will
have no right to vote them, but the Board may at the Date of Grant, authorize the payment of
dividend equivalents on such Restricted Stock Units on either a current, deferred or contingent
basis, either in cash or in additional shares of Common Stock.

(f) Each grant or sale of Restricted Stock Units will specify the time and manner of payment
of the Restricted Stock Units that have been earned. Each grant or sale will specify that the
amount payable with respect thereto will be paid by the Company in shares of Common Stock, in an
amount of cash equal to the Market Value per Share of the shares of Common Stock underlying the
Restricted Stock Units, or may reserve to the Board the discretion to make payment in either cash
or shares of Common Stock.

(g) Each grant or sale of Restricted Stock Units will be evidenced by an Evidence of Award and
will contain such terms and provisions, consistent with this Plan, as the Board may approve.

8. Performance Shares and Performance Units. The Board may, from time to time and upon such
terms and conditions as it may determine, also authorize the granting of Performance Shares and
Performance Units that will become payable to a Participant upon achievement of specified
Management Objectives during the Performance Period. Each such grant may utilize any or all of the
authorizations, and will be subject to all of the requirements, contained in the following
provisions:

(a) Each grant will specify the number of Performance Shares or Performance Units to which it
pertains, which number may be subject to adjustment to reflect changes in compensation or other
factors; provided, however, that no such adjustment will be made in the case of a
Qualified Performance-Based Award where such action would result in the loss of the otherwise
available exemption of the award under Section 162(m) of the Code.

(b) The Performance Period with respect to each Performance Share or Performance Unit will be
such period of time (not less than one year), commencing with the Date of Grant as will be
determined by the Board at the time of grant which may be subject to earlier lapse or other
modification in the event of the retirement, death or disability of a Participant, a Change in
Control or other sufficient reason.

(c) Any grant of Performance Shares or Performance Units will specify Management Objectives
which, if achieved, will result in payment or early payment of the award, and each grant may
specify in respect of such Management Objectives a minimum acceptable level of achievement and may
set forth a formula for determining the number of Performance Shares or Performance Units that will
be earned if performance is at or above the minimum or threshold level or levels, or is at or above
the target level or levels, but falls short of maximum achievement of the specified Management
Objectives. The grant of Performance Shares or Performance Units will specify that, before the
Performance Shares or Performance Units will be earned and paid, the Board must certify that the
Management Objectives have been satisfied.

(d) Each grant will specify the time and manner of payment of Performance Shares or
Performance Units that have been earned. Any grant may specify that the amount payable with respect
thereto may be paid by the Company in cash, in shares of Common Stock or in any combination thereof
and may either grant to the Participant or retain in the Board the right to elect among those
alternatives.

(e) Any grant of Performance Shares or Performance Units may specify that the amount payable
or the number of shares of Common Stock issued with respect thereto may not exceed maximums
specified by the Board at the Date of Grant.

(f) The Board may at the Date of Grant of Performance Shares, provide for the payment of
dividend equivalents to the holder thereof on either a current, deferred or contingent basis,
either in cash or in additional shares of Common Stock.

(g) Each grant of Performance Shares or Performance Units will be evidenced by an Evidence of
Award and will contain such other terms and provisions, consistent with this Plan, as the Board may
approve.

9. Awards to Non-Employee Directors. The Board may, from time to time and upon such terms and
conditions as it may determine, authorize the granting to Non-Employee Directors of Option Rights,
Appreciation Rights or other awards contemplated by Section 10 of this Plan and may also authorize
the grant or sale of shares of Common Stock, Restricted Stock or Restricted Stock Units to
Non-Employee Directors. Each grant of an award to a Non-Employee Director will be upon such terms
and conditions as approved by the Board and will be evidenced by an Evidence of Award in such form
as will be approved by the Board. Unless otherwise determined by the Board, each grant will vest
not earlier than the next annual meeting of the stockholders of the Company subsequent to the Date
of Grant, subject to the Non-Employee Director remaining a Director through the date of such annual
meeting. Each grant will specify in the case of an Option Right, an Option Price per share, and in
the case of a Free-Standing Appreciation Right, a Base Price per share, which will not be less than
the Market Value per Share on the Date of Grant. Each Option Right and Free-Standing Appreciation
Right granted under the Plan to a Non-Employee Director will expire not more than 10 years from the
Date of Grant and will be subject to earlier termination as hereinafter provided. If a Non-Employee
Director subsequently becomes an employee of the Company or a Subsidiary while remaining a member
of the Board, any award held under this Plan by such individual at the time of such commencement of
employment will not be affected thereby. Non-Employee Directors, pursuant to this Section 9, may be
awarded, or may be permitted to elect to receive, pursuant to procedures established by the Board,
all or any portion of their annual retainer, meeting fees or other fees in shares of Common Stock,
Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units or other awards under
the Plan in lieu of cash.

10. Other Awards.

(a) The Board may, subject to limitations under applicable law, grant to any Participant such
other awards that may be denominated or payable in, valued in whole or in part by reference to, or
otherwise based on, or related to, shares of Common Stock or factors that may influence the value
of such shares, including, without limitation, convertible or exchangeable debt securities, other
rights convertible or exchangeable into shares of Common Stock, purchase rights for shares of
Common Stock, awards with value and payment contingent upon performance of the Company or specified
Subsidiaries, affiliates or other business units thereof or any other factors designated by the
Board, and awards valued by reference to the book value of shares of Common Stock or the value of
securities of, or the performance of specified Subsidiaries or affiliates or other business units
of the Company. The Board shall determine the terms and conditions of such awards. Shares of Common
Stock delivered pursuant to an award in the nature of a purchase right granted under this Section
10 shall be purchased for such consideration, paid for at such time, by such methods, and in such
forms, including, without limitation, cash, shares of Common Stock, other awards, notes or other
property, as the Board shall determine.

(b) Cash awards, as an element of or supplement to any other award granted under this Plan,
may also be granted pursuant to this Section 10 of this Plan.

(c) The Board may grant shares of Common Stock as a bonus, or may grant other awards in lieu
of obligations of the Company or a Subsidiary to pay cash or deliver other property under this Plan
or under other plans or compensatory arrangements, subject to such terms as shall be determined by
the Board in a manner that complies with Section 409A of the Code.

(d) Share-based awards pursuant to this Section 10 are not required to be subject to any
minimum vesting period.

11. Cash Awards. The Board may, from time to time and upon such terms and conditions as it
may determine, also authorize the granting of Cash Awards to Participants. Each such grant may
utilize any or all of the authorizations, and will be subject to all of the requirements, contained
in the following provisions:

(a) Each Cash Award Agreement will specify Management Objectives or other performance criteria
which, if achieved, will result in payment or early payment of the award, and each grant may
specify in respect of such Management Objectives or other performance criteria, as applicable, a
minimum acceptable level of achievement and may set forth a formula for determining the amount of
the Cash Award that will be earned if performance is at or above the minimum or threshold level or
levels, or is at or above the target level or levels, but falls short of maximum achievement of the
specified Management Objectives or other performance criteria, as applicable. If Management
Objectives are specified, the Cash Award Agreement will specify that, before the Cash Award will be
earned and paid, the Board must certify that the Management Objectives have been satisfied.

(b) If a Cash Award Agreement specifies Management Objectives, the Cash Award shall not be
earned and paid sooner than one year from the Date of Grant.

(c) Each Cash Award Agreement may specify a percentage of the target Cash Award that is
intended to be a Qualified Performance-Based Award.

(d) Any Cash Award Agreement may specify that the amount payable with respect thereto may be
paid by the Company in cash or other property, and may either grant to the Participant or retain in
the Board the right to elect among those alternatives. To the extent that a Cash Award is paid in
the form of cash, the Board may determine whether a payment is in U.S. dollars or foreign currency.

(e) Each Cash Award Agreement will specify the timing of payment of the Cash Award and,
subject to such terms and conditions as the Board may specify, may permit a Participant to elect
for the payment of any Cash Award to be deferred to a specified date or event. All elective
deferrals permitted pursuant to this Section 11(e) shall be accomplished by the delivery of a
written, irrevocable election by the Participant on a form provided by the Company. All deferrals
shall be made in accordance with administrative guidelines established by the Board to ensure that
such deferrals comply with all applicable requirements of Section 409A of the Code.

(f) Notwithstanding anything to the contrary contained in this Plan, any Cash Award Agreement
may provide for earlier vesting of the Cash Award in the event of the retirement, death or
disability of a Participant, a Change in Control, or other sufficient reason.

(g) Each Cash Award Agreement will contain such terms and provisions, consistent with the
Plan, as the Board may approve.

12. Transferability.

(a) Except as otherwise determined by the Board, no Option Right, Appreciation Right, award of
Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, Cash Award or
other derivative security granted under the Plan shall be transferable by the Participant except by
will or the laws of descent and distribution, and in no event shall any such award granted under
this Plan be transferred for value. Except as otherwise determined by the Board, Option Rights and
Appreciation Rights will be exercisable during the Participant’s lifetime only by him or her or, in
the event of the Participant’s legal incapacity to do so, by his or her guardian or legal
representative acting on behalf of the Participant in a fiduciary capacity under state law and/or
court supervision.

(b) The Board may specify at the Date of Grant that part or all of the shares of Common Stock
that are (i) to be issued or transferred by the Company upon the exercise of Option Rights or
Appreciation Rights, upon the termination of the Restriction Period applicable to Restricted Stock
Units or upon payment under any grant of Performance Shares or Performance Units or (ii) no longer
subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 6
of this Plan, will be subject to further restrictions on transfer.

13. Adjustments.

(a) The Board shall make or provide for such adjustments in the numbers of shares of Common
Stock covered by outstanding Option Rights, Appreciation Rights, Restricted Stock Units,
Performance Shares and Performance Units granted hereunder and, if applicable, in the number of
shares of Common Stock covered by other awards granted pursuant to Section 10 hereof, in the Option
Price and Base Price provided in outstanding Appreciation Rights, and in the kind of shares covered
thereby, as the Board, in its sole discretion, exercised in good faith, may determine is equitably
required to prevent dilution or enlargement of the rights of Participants or Optionees that
otherwise would result from (a) any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Company, (b) any merger,
consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete
liquidation or other distribution of assets, issuance of rights or warrants to purchase securities,
or (c) any other corporate transaction or event having an effect similar to any of the foregoing.
Moreover, in the event of any such transaction or event or in the event of a Change in Control, the
Board, in its discretion, may provide in substitution for any or all outstanding awards under this
Plan such alternative consideration (including cash), if any, as it, in good faith, may determine
to be equitable in the circumstances and may require in connection therewith the surrender of all
awards so replaced in a manner that complies with Section 409A of the Code.

(b) In addition, for each Option Right or Appreciation Right with an Option Price or Base
Price greater than the consideration offered in connection with any such termination or event or
Change in Control, the Board may in its sole discretion elect to cancel such Option Right or
Appreciation Right without any payment to the person holding such Option Right or Appreciation
Right.

(c) The Board shall also make or provide for such adjustments in the numbers of shares
specified in Section 3 of this Plan as the Board in its sole discretion, exercised in good faith,
may determine is appropriate to reflect any transaction or event described in this Section 13;
provided, however, that any such adjustment to the number specified in Section
3(c)(i) will be made only if and to the extent that such adjustment would not cause any option
intended to qualify as an Incentive Stock Option to fail so to qualify.

14. Administration of the Plan.

(a) This Plan will be administered by the Board, which may from time to time delegate all or
any part of its authority under this Plan to the Compensation Committee of the Board (or a
subcommittee thereof), as constituted from time to time. To the extent of any such delegation,
references in this Plan to the Board will be deemed to be references to such committee or
subcommittee. A majority of the committee (or subcommittee) will constitute a quorum, and the
action of the members of the committee (or subcommittee) present at any meeting at which a quorum
is present, or acts unanimously approved in writing, will be the acts of the committee (or
subcommittee).

(b) The interpretation and construction by the Board of any provision of this Plan or of any
agreement, notification or document evidencing the grant of Option Rights, Appreciation Rights,
Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units or other awards
pursuant to Section 10 of this Plan and any determination by the Board pursuant to any provision of
this Plan or of any such agreement, notification or document will be final and conclusive. No
member of the Board will be liable for any such action or determination made in good faith.

(c) The Board or, to the extent of any delegation as provided in Section 14(a), the committee,
may delegate to one or more of its members or to one or more officers of the Company, or to one or
more agents or advisors, such administrative duties or powers as it may deem advisable, and the
Board, the committee, or any person to whom duties or powers have been delegated as aforesaid, may
employ one or more persons to render advice with respect to any responsibility the Board, the
committee or such person may have under the Plan. The Board or the committee may, by resolution,
authorize one or more officers of the Company to do one or both of the following on the same basis
as the Board or the committee: (i) designate employees to be recipients of awards under this Plan;
(ii) determine the size of any such awards; provided, however, that (A) the Board
or the committee shall not delegate such responsibilities to any such officer for awards granted to
an employee who is an officer, Director, or more than 10% beneficial owner of any class of the
Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as
determined by the Board in accordance with Section 16 of the Exchange Act; (B) the resolution
providing for such authorization sets forth the total number of shares of Common Stock such
officer(s) may grant; and (iii) the officer(s) shall report periodically to the Board or the
committee, as the case may be, regarding the nature and scope of the awards granted pursuant to the
authority delegated.

15. Change in Control. For purposes of this Plan, except as may be otherwise prescribed by
the Board in an Evidence of Award, a “Change in Control” shall mean the occurrence of any
of the following events:

(a) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole to any “Person” or “Group” of related
persons (as such terms are used in Section 13(d)(3) of the Securities Exchange Act of 1934),

(b) the adoption of a plan relating to the liquidation or dissolution of the Company,

(c) the consummation of any transaction (including, without limitation, any purchase, sale,
acquisition, disposition, merger or consolidation) the result of which is that any Person or Group
becomes the “beneficial owner” (as such term is defined in Rule 13d-3 and Rule 13d-5 under the
Securities Exchange Act of 1934, but excluding, for this purpose, any options to purchase equity
securities of the Company held by such Person or Group) of more than 50% of the aggregate voting
power of all classes of capital stock of the Company having the right to elect directors under
ordinary circumstances,

(d) the first day on which a majority of the members of the Board are not Continuing
Directors, or

(e) such other event as the Board may determine by express resolution to constitute a Change
in Control for purposes of this Plan.

“Continuing Directors” means, as of any date of determination, any member of the Board who
(i) was a member of the Board on the date this plan is approved by the Company’s stockholders or
(ii) was nominated for election or elected to the Board with the approval of (a) a majority of the
Continuing Directors who were members of the Board at the time of such nomination or election or
(b) a majority of those Directors who were previously approved by Continuing Directors.

16. Detrimental Activity. Any Evidence of Award may provide that if a Participant, either
during employment by the Company or a Subsidiary or within a specified period after termination of
such employment, shall engage in any Detrimental Activity, and the Board shall so find, forthwith
upon notice of such finding, the Participant shall:

(a) Forfeit any award granted under the Plan then held by the Participant;

(b) Return to the Company, in exchange for payment by the Company of any amount actually paid
therefor by the Participant, all shares of Common Stock that the Participant has not disposed of
that were offered pursuant to this Plan within a specified period prior to the date of the
commencement of such Detrimental Activity, and

(c) With respect to any shares of Common Stock so acquired that the Participant has disposed
of, pay to the Company in cash the difference between:

(i) Any amount actually paid therefor by the Participant pursuant to this Plan, and

(ii) The Market Value per Share of the shares of Common Stock on the date of such acquisition.

To the extent that such amounts are not paid to the Company, the Company may set off the amounts so
payable to it against any amounts (but only to the extent that such amounts would not be considered
“nonqualified deferred compensation” within the meaning of Section 409A of the Code) that may be
owing from time to time by the Company or a Subsidiary to the Participant, whether as wages,
deferred compensation or vacation pay or in the form of any other benefit or for any other reason.

17. Non U.S. Participants. In order to facilitate the making of any grant or combination of
grants under this Plan, the Board may provide for such special terms for awards to Participants who
are foreign nationals or who are employed by the Company or any Subsidiary outside of the United
States of America or who provide services to the Company under an agreement with a foreign nation
or agency, as the Board may consider necessary or appropriate to accommodate differences in local
law, tax policy or custom. Moreover, the Board may approve such supplements to or amendments,
restatements or alternative versions of this Plan (including without limitation, sub-plans) as it
may consider necessary or appropriate for such purposes, without thereby affecting the terms of
this Plan as in effect for any other purpose, and the Secretary or other appropriate officer of the
Company may certify any such document as having been approved and adopted in the same manner as
this Plan. Unless otherwise determined by the Board, any sub-plans in place on the Effective Date
under the Existing Plans will be considered sub-plans for purposes of this Plan. No such special
terms, supplements, amendments or restatements, however, will include any provisions that are
inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended
to eliminate such inconsistency without further approval by the stockholders of the Company.

18. Withholding Taxes. To the extent that the Company is required to withhold federal, state,
local or foreign taxes in connection with any payment made or benefit realized by a Participant or
other person under this Plan, and the amounts available to the Company for such withholding are
insufficient, it will be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements satisfactory to the Company for
payment of the balance of such taxes required to be withheld, which arrangements (in the discretion
of the Board) may include relinquishment of a portion of such benefit. If a Participant’s benefit
is to be received in the form of shares of Common Stock, and such Participant fails to make
arrangements for the payment of tax, the Board may cause the Company to withhold such shares of
Common Stock having a value equal to the amount required to be withheld. Unless otherwise
determined by the Board, when a Participant is required to pay the Company an amount required to be
withheld under applicable income and employment tax laws, the Participant may elect to satisfy the
obligation, in whole or in part, by electing to have withheld, from the shares required to be
delivered to the Participant, shares of Common Stock having a value equal to the amount required to
be withheld, by delivering to the Company other shares of Common Stock held by such Participant, or
by payroll deduction for the two pay periods following the date the withholding is required or, for
Executive Officers, by check on the date the withholding is required. The shares used for tax
withholding will be valued at an amount equal to the Market Value per Share of such shares of
Common Stock on the date the benefit is to be included in Participant’s income, regardless of
whether the shares of Common Stock underlying the award would otherwise be delivered on such date.
In no event shall the Market Value per Share of the shares of Common Stock to be withheld and
delivered pursuant to this Section to satisfy applicable withholding taxes in connection with the
benefit exceed the minimum amount of taxes required to be withheld. Participants shall also make
such arrangements as the Company may require for the payment of any withholding tax obligation that
may arise in connection with the disposition of shares of Common Stock acquired upon the exercise
of Option Rights.

19. Amendments, Etc.

(a) The Board may at any time and from time to time amend the Plan in whole or in part;
provided, however, that if an amendment to the Plan (i) would materially increase
the benefits accruing to participants under the Plan, (ii) would materially increase the number of
securities which may be issued under the Plan, (iii) would materially modify the requirements for
participation in the Plan or (iv) must otherwise be approved by the stockholders of the Company in
order to comply with applicable law or the rules of the Nasdaq Stock Market or, if the Common Stock
is not traded on the Nasdaq Stock Market, the principal national securities exchange upon which the
Common Stock is traded or quoted, then, such amendment will be subject to stockholder approval and
will not be effective unless and until such approval has been obtained.

(b) Except in connection with a corporate transaction or event described in Section 13 of this
Plan, the terms of awards outstanding under the Plan may not be amended to reduce the Option Price
of outstanding Option Rights or the Base Price of outstanding Appreciation Rights, or cancel
outstanding Option Rights or Appreciation Rights in exchange for cash, other awards or Option
Rights or Appreciation Rights with an Option Price or Base Price, as applicable, that is less than
the Option Price of the original Option Rights or Base Price of the original Appreciation Rights,
as applicable, without stockholder approval.

(c) If permitted by Section 409A of the Code and Section 162(m) in the case of a Qualified
Performance-Based Award, in case of termination of employment by reason of death, disability or
normal or early retirement, or in the case of unforeseeable emergency or other special
circumstances, of a Participant who holds an Option Right or Appreciation Right not immediately
exercisable in full, or any shares of Restricted Stock as to which the substantial risk of
forfeiture or the prohibition or restriction on transfer has not lapsed, or any Restricted Stock
Units as to which the Restriction Period has not been completed, or any Performance Shares or
Performance Units which have not been fully earned, or any other awards made pursuant to Section 10
subject to any vesting schedule or transfer restriction, or who holds Common Stock subject to any
transfer restriction imposed pursuant to Section 12(b) of this Plan, the Board may, in its sole
discretion, accelerate the time at which such Option Right, Appreciation Right or other award may
be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction
on transfer will lapse or the time when such Restriction Period will end or the time at which such
Performance Shares or Performance Units will be deemed to have been fully earned or the time when
such transfer restriction will terminate or may waive any other limitation or requirement under any
such award.

(d) Subject to Section 19(b) hereof, the Board may amend the terms of any award theretofore
granted under this Plan prospectively or retroactively, but subject to Section 13 above, no such
amendment shall impair the rights of any Participant without his or her consent. The Board may, in
its discretion, terminate this Plan at any time. Termination of this Plan will not affect the
rights of Participants or their successors under any awards outstanding hereunder and not exercised
in full on the date of termination.

(e) Presentation of the Plan or any amendment thereof for stockholder approval shall not be
construed to limit the Company’s authority to offer similar or dissimilar benefits in plans that do
not require stockholder approval.

20. Compliance with Section 409A of the Code.

(a) To the extent applicable, it is intended that this Plan and any grants made hereunder
comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of
Section 409A(a)(1) of the Code do not apply to the Participants. This Plan and any grants made
hereunder shall be administered in a manner consistent with this intent. Any reference in this Plan
to Section 409A of the Code will also include any regulations or any other formal guidance
promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal
Revenue Service.

(b) Neither a Participant nor any of a Participant’s creditors or beneficiaries shall have the
right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable
under this Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A of the Code,
any deferred compensation (within the meaning of Section 409A of the Code) payable to a Participant
or for a Participant’s benefit under this Plan and grants hereunder may not be reduced by, or
offset against, any amount owing by a Participant to the Company or any of its affiliates.

(c) If, at the time of a Participant’s separation from service (within the meaning of Section
409A of the Code), (i) the Participant shall be a specified employee (within the meaning of Section
409A of the Code and using the identification methodology selected by the Company from time to
time) and (ii) the Company shall make a good faith determination that an amount payable hereunder
constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of
which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of
the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company
shall not pay such amount on the otherwise scheduled payment date but shall instead pay it, without
interest, on the first business day of the seventh month after such six-month period.

(d) Notwithstanding any provision of this Plan and grants hereunder to the contrary, in light
of the uncertainty with respect to the proper application of Section 409A of the Code, the Company
reserves the right to make amendments to this Plan and grants hereunder as the Company deems
necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the
Code. In any case, a Participant shall be solely responsible and liable for the satisfaction of all
taxes and penalties that may be imposed on a Participant or for a Participant’s account in
connection with this Plan and grants hereunder (including any taxes and penalties under Section
409A of the Code), and neither the Company nor any of its affiliates shall have any obligation to
indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties.

21. Governing Law. The Plan and all grants and awards and actions taken thereunder shall be
governed by and construed in accordance with the internal substantive laws of the State of
Delaware.

22. Effective Date/Termination. This Plan will be effective as of the Effective Date. No grant
will be made under this Plan more than 10 years after the date on which this Plan is first approved
by the stockholders of the Company, but all grants made on or prior to such date will continue in
effect thereafter subject to the terms thereof and of this Plan. No grants will be made on or after
the Effective Date under the Existing Plans, except that outstanding awards granted under the
Existing Plans will continue unaffected following the Effective Date.

23. Exclusion from Certain Restrictions. Notwithstanding anything in this Plan to the
contrary, up to 10 percent of the shares of Common Stock in the aggregate available under this Plan
may be subject to awards without any minimum vesting period.

24. Miscellaneous.

(a) The Company will not be required to issue any fractional shares of Common Stock pursuant
to this Plan. The Board may provide for the elimination of fractions or for the settlement of
fractions in cash.

(b) This Plan will not confer upon any Participant any right with respect to continuance of
employment or other service with the Company or any Subsidiary, nor will it interfere in any way
with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s
employment or other service at any time.

(c) To the extent that any provision of this Plan would prevent any Option Right that was
intended to qualify as an Incentive Stock Option from qualifying as such, that provision will be
null and void with respect to such Option Right. Such provision, however, will remain in effect for
other Option Rights and there will be no further effect on any provision of this Plan.

(d) No award under this Plan may be exercised by the holder thereof if such exercise, and the
receipt of cash or stock thereunder, would be, in the opinion of counsel selected by the Board,
contrary to law or the regulations of any duly constituted authority having jurisdiction over this
Plan.

(e) Absence or leave approved by a duly constituted officer of the Company or any of its
Subsidiaries shall not be considered interruption or termination of service of any employee for any
purposes of this Plan or awards granted hereunder, except that no awards may be granted to an
employee while he or she is absent on leave.

(f) No Participant shall have any rights as a stockholder with respect to any shares subject
to awards granted to him or her under this Plan prior to the date as of which he or she is actually
recorded as the holder of such shares upon the stock records of the Company.

(g) The Board may condition the grant of any award or combination of awards authorized under
this Plan on the surrender or deferral by the Participant of his or her right to receive a cash
bonus or other compensation otherwise payable by the Company or a Subsidiary to the Participant.

(h) If any provision of the Plan is or becomes invalid, illegal or unenforceable in any
jurisdiction, or would disqualify the Plan or any award under any law deemed applicable by the
Board, such provision shall be construed or deemed amended or limited in scope to conform to
applicable laws or, in the discretion of the Board, it shall be stricken and the remainder of the
Plan shall remain in full force and effect.

(i) Any Evidence of Award may: (i) provide for recoupment by the Company of all or any
portion of an award upon such terms and conditions as the Board may specify in such Evidence of
Award; or (ii) include restrictive covenants, including, without limitation, non-competition,
non-disparagement and confidentiality conditions or restrictions, that the Participant must comply
with during employment by the Company and/or within a specified period after termination as a
condition to the Participant’s receipt or retention of all or any portion of an award. This
Section 24(i) shall not be the Company’s exclusive remedy with respect to such matters. This
Section 24(i) shall not apply after a Change of Control, unless otherwise specifically provided in
the Evidence of Award.

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