Document:

EX-10.38 Indemnity Agreement

 

INDEMNITY AGREEMENT

DATE: August 22,2006

BETWEEN:

OMERS Realty Corporation

CPP Investment Board Real Estate Holdings Inc.

(“Landlord”)

AND

The Ultimate Software Group, Inc.

(“Indemnifier”)

IN CONSIDERATION OF the sum of two dollars and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Indemnifier hereby agrees as follows:

	1.	 	DEFINITIONS

In this Agreement:

	 	(a)	 	“Building” means 20 Bay Street located in the City of Toronto.
	 
	 	(b)	 	“Lease” means the lease between Landlord and Tenant dated August 22, 2006 covering
the
Premises.
	 
	 	(c)	 	“Premises” means 2,251 square feet of space on the 14th floor of the Building, as
shown hatched on
Schedule A hereto.
	 
	 	(d)	 	“Tenant” means The Ultimate Software Group of Canada, Inc.
	 
	 	(e)	 	All other capitalized words and phrases, unless otherwise defined herein, have the
meanings
attributed to them in the Lease.

	2.	 	INDEMNIFIER’S OBLIGATIONS

	 	a)	 	Throughout the Term of the Lease and any extension or renewal, Indemnifier will (i)
promptly pay all Rent and any other amounts payable by Tenant under the Lease, whether to
Landlord or anyone else; (ii) promptly perform each and every monetary and financial
obligation of Tenant under the Lease; and (iii) indemnify and protect Landlord from any
losses or costs incurred by Landlord (including legal fees) if Tenant fails to pay the
Rent or other amounts or to perform any of its obligations under the Lease.
	 
	 	 	 	Notwithstanding anything else contained in this Agreement and the Lease, the aggregate
liability hereunder of the Indemnifier shall be limited to the maximum amount of four
hundred thousand Dollars ($400,000.00) which shall decline on a straight line basis to zero
over the initial Term of

 

 

the Lease (“Aggregate Liability”), with respect to the Tenant’s observance and
performance of all terms, covenants and conditions contained in the Lease.

	 	b)	 	Indemnifier acknowledges and agrees that it is primarily liable to the Landlord and
that it is entering
into this Agreement as principal and not as a surety.
	 
	 	c)	 	Indemnifier agrees that it is jointly and severally liable with Tenant under the
Lease and Landlord
may proceed against Indemnifier as if Indemnifier was named as Tenant under the Lease.

	3.	 	SURVIVAL OF OBLIGATIONS

	 	a)	 	Even if there is a disaffirmance, disclaimer, repudiation, rejection or termination
of the Lease (as a
result of court proceedings or otherwise), or a surrender of the Lease which Landlord did
not accept
in writing, which occurs prior to the originally specified expiry date of the Term,
Indemnifier will
remain obligated under this Agreement. Subject to the Aggregate Liability, Indemnifier
will, in such
event and at Landlord’s sole option, be treated as though it was the tenant under the terms
of the
Lease for the balance of the Term. Indemnifier’s obligations in such event, however, are
not subject
to the Landlord granting the Indemnifier a lease as aforesaid.
	 
	 	b)	 	This indemnity is absolute and unconditional. Subject to the Aggregate Liability,
Indemnifier’s
liability will only be released by full payment of all amounts expressed in the Lease to be
payable by
Tenant for the Term and the full performance of all obligations on the part of Tenant
expressed in the
Lease to be performed by the Tenant for the Term. Indemnifier’s obligations under this
Agreement
will not be affected by (i) any modifications to Landlord’s or Tenant’s rights or
obligations under the
Lease; (ii) the fact that Landlord does not enforce any of the terms of the Lease; (iii)
any assignment
of the Lease by Tenant or by any trustee, receiver or liquidator; (iv) any consent which
Landlord
gives to any Transfer; (v) any waiver by Tenant of its rights under the Lease; (vi) any
additional
security accepted by Landlord from Tenant; (vii) the expiry of the Term; (viii) the release
or
discharge of Tenant or any other person liable under the Lease by Landlord or in any
receivership,
bankruptcy, winding-up or other creditors’ proceedings or by operation of law: or (ix) lack
of notice
of any of the foregoing.
	 
	 	c)	 	Indemnifier’s obligations will not be affected by any repossession of the Premises by
Landlord,
except that if Landlord re-lets the Premises then the payments received by Landlord (after
deducting
all costs and expenses of repossessing and reletting the Premises) will be credited by
Landlord
against Indemnifier’s obligations under this Agreement. Indemnifier’s obligations will
continue to
apply to the periods before and after the release or discharge as if it had not occurred.

	4.	 	NOTICES

Landlord is not required to notify Indemnifier that Landlord has accepted this Agreement or that
Tenant has failed to perform any of its obligations under the Lease. Nevertheless, if Landlord
wishes to send any notice to the Indemnifier, it will deliver it or mail it by prepaid registered
mail addressed to Indemnifier at 2000 Ultimate Way, Weston, Florida, U.S.A., 33326 or, at
Landlord’s option, at the Premises. Any notice will be considered to have been given on the day it
was delivered, or if mailed, three (3) days after the date it was mailed. Indemnifier may notify
Landlord in writing of a substitute address for the above address. If two or more parties are named
as Indemnifier, Landlord may give any notice to be given to Indemnifier to only one of the parties,
and in doing so all of them will be considered to have been notified. No notice given by email or
by other similar electronic means will be considered to have been given in writing.

	5.	 	LANDLORD’S RIGHTS

	 	a)	 	If there is a default under the Lease or under this Agreement, Landlord will not
be required to (i) proceed against or pursue anything against Tenant first; (ii) proceed
against any security of Tenant

 

 

held
by Landlord; or (iii) pursue any other remedy whatsoever. Indemnifier is not
a mere guarantor; Indemnifier is primarily responsible for Tenant’s obligations
under the Lease.

	 	b)	 	Even though Landlord may have already taken action against Indemnifier
under this Agreement because of a default under the Lease, and whether or not
that action has succeeded or been completed, Landlord may take further action
against Indemnifier under this Agreement if there is any further default under
the Lease.

	6.	 	JOINT AND SEVERAL LIABILITY

If two or more parties are named as Indemnifier, each party is jointly and severally
responsible for the obligations of Indemnifier.

	7.	 	ACKNOWLEDGEMENT

The Indemnifier acknowledges receipt of a copy of the Lease.

	8.	 	GOVERNING LAW

This Lease shall be governed by and construed under the laws of the jurisdiction in
which the Building is located, and its provisions shall be construed as a whole
according to their common meaning and not strictly for or against Landlord or
Indemnifier.

	9.	 	BINDING EFFECT

This Agreement shall enure to the benefit of and be binding upon the parties hereto and
their respective heirs, executors, trustees, administrators, successors and assigns, as
the case may be.

IN WITNESS WHEREOF the parties have signed and sealed this Agreement.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	INDEMNIFIER:	 	 
	OMERS Realty Corporation and	 	The Ultimate Software Group, Inc.	 	 
	CPP Investment Board Real Estate Holdings Inc.	 	 	 	 	 	 
	by their agent (without personal liability)	 	 	 	 	 	 
	OPGI Management GP Inc. as general partner of the	 	 	 	 	 	 
	OPGI Management Limited Partnership	 	 	 	 	 	 
	 

	 	 	 	Per:
	 	/s/ Robert Manns	 	 
	Per:

	 	/s/ Daniel A. Holmes
	 	Name:
	 	ROBERT MANNS
	 	 
	 

	 	Authorized Signing Officer
	 	Title:
	 	VICE PRESIDENT	 	 
	 

	 	DANIEL A. HOLMES	 	 	 	 	 	 
	 

	 	ASSISTANT SECRETARY	 	 	 	 	 	 
	 

	 	 	 	Per:
	 	/s/ Scott Schbrr	 	 
	Per:

	 	/s/ David Costello
 

	 	Name:
	 	 

SCOTT SCHBRR 
	 	 
	 

	 	Authorized Signing Officer
	 	Title:
	 	 PRESIDENT	 	 
	 

	 	David Costello	 	 	 	 	 	 
	 

	 	Vice President	 	 	 	 	 	 
	 

	 	Real Estate Management	 	 	 	 	 	 
	 	 	 	 	Having authority to bind the corporation.	 	 
	 
	 	 	 	 	 	 	 	 
	Having authority to bind the corporation.EX-10.1 AMENDED 2006 MANAGEMENT INCENTIVE PLAN

 

EXHIBIT 10.1

PRG-SCHULTZ INTERNATIONAL, INC.

AMENDED AND RESTATED

2006 MANAGEMENT INCENTIVE PLAN

1. Purpose

     The purpose of the PRG-Schultz International, Inc. 2006 Management Incentive Plan (the “Plan”)
is to enable PRG-Schultz International, Inc. ( the “Company”) to attract, retain, and reward
certain key employees of the Company, and strengthen the mutuality of interests between such key
employees and the Company’s shareholders, by providing deferred compensation to participants
herein. Such deferred compensation shall be based upon the award of “Performance Units,” which are
hereinafter defined, the value of which is related to the value of the Common Stock of the Company.

     For purposes of the Plan, the following terms shall be defined as set forth below:

(a) “Adjusted Outstanding Shares” as of any given date shall mean 6,211,231 shares plus any shares of Common Stock issued on or after March 17, 2006 upon conversion of 10% senior
convertible notes due 2011, 9% senior convertible series A preferred stock or 10% senior
convertible series B preferred stock, subject to adjustment in accordance with Section 8.

(b) “Board” means the Board of Directors of the Company.

     (c) “Change in Control” means a change in the ownership or effective control of, or in the
ownership of a substantial portion of the assets of, the Company, to the extent consistent with
Section 409A of the Code, and any regulatory or other interpretive authority promulgated
thereunder. By way of example and not limitation, “Change of Control” includes the occurrence of
one or more of the events described in paragraphs (i) through (iii), below.

     (i) Change in Ownership of the Company. A change in the ownership of the Company shall
occur on the date that any one person, or more than one person acting as a group (within the
meaning of paragraph (i)(D), acquires ownership of Company stock that, together with Company
stock held by such person or group, constitutes more than 50% of the total fair market value
or total voting power of the stock of the Company.

     (A) If any one person or more than one person acting as a group (within the
meaning of paragraph (i)(D)) is considered to own more than 50% of the total fair
market value or total voting power of the stock of the Company, the acquisition of
additional Company stock by such person or persons shall not be considered to cause
a change in the ownership of the Company or to cause a change in the effective
control of the Company (within the meaning of paragraph (ii) below).

     (B) An increase in the percentage of Company stock owned by any one person, or
persons acting as a group (within the meaning of paragraph (i)(D)), as a result of a
transaction in which the Company acquires its stock in exchange for property, shall
be treated as an acquisition of stock for purposes of this paragraph (i).

     (C) The provisions of this paragraph (i) shall apply only to the transfer or
issuance of Company stock if such Company stock remains outstanding after such
transfer or issuance.

     (D) For purposes of this paragraph (i), persons shall be considered to be
acting as a group if they are owners of a corporation that enters into a merger,
consolidation, purchase, or acquisition of stock, or similar business transaction
with the Company. If a person, including an entity, owns stock in the Company and
another entity with which the Company enters into a merger, consolidation, purchase,
or acquisition of stock, or similar business transaction, such shareholder shall

40

 

be considered to be acting as a group with other Company shareholders prior to
the transaction giving rise to the change and not with respect to the ownership
interest in the other corporation. Persons shall not be considered to be acting as
a group solely because they purchase or own stock of the same corporation at the
same time, or as a result of the same public offering.

     (ii) Change in Effective Control of the Company.

     (A) A change in the effective control of the Company shall occur on the date
that either of (1) or (2) below occurs:

     (1) Any one person, or more than one person acting as a group (within
the meaning of paragraph (ii)(D)), acquires (or has acquired during the
twelve (12) month period ending on the date of the most recent acquisition
by such person or persons) ownership of stock of the Company possessing 35%
or more of the total voting power of the stock of the Company; or

     (2) A majority of members of the Board is replaced during any twelve
(12) month period by directors whose appointment or election is not endorsed
by a majority of the Board prior to the date of the appointment or election.

     (B) A change in effective control of the Company also may occur with respect to
any transaction in which either of the Company or the other corporation involved in
a transaction experiences a Change of Control described in paragraphs (i) or (iii).

     (C) If any one person, or more than one person acting as a group (within the
meaning of paragraph (ii)(D)), is considered to effectively control the Company
(within the meaning of this paragraph (ii)), the acquisition of additional control
of the Company by the same person or persons shall not be considered to cause a
change in the effective control of the Company (or to cause a change in the
ownership of the Company within the meaning of paragraph (i)).

     (D) For purposes of this paragraph (ii), persons shall be considered to be
acting as a group if they are owners of a corporation that enters into a merger,
consolidation, purchase, or acquisition of stock, or similar business transaction
with the Company. If a person, including an entity, owns stock in the Company and
another entity with which the Company enters into a merger, consolidation, purchase,
or acquisition of stock, or similar business transaction, such shareholder shall be
considered to be acting as a group with other Company shareholders only with respect
to the ownership in the Company prior to the transaction giving rise to the change
and not with respect to the ownership interest in the other corporation. Persons
shall not be considered to be acting as a group solely because they purchase or own
stock of the same corporation at the same time, or as a result of the same public
offering.

     (iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A change
in the ownership of a substantial portion of the Company’s assets shall occur on the date
that any one person, or more than one person acting as a group (within the meaning of
paragraph (iii)(C)), acquires (or has acquired during the twelve (12) month period ending on
the date of the most recent acquisition by such person or persons) assets from the Company
that have a total gross fair market value (within the meaning of paragraph (iii)(B)) equal
to or more than 40% of the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions.

     (A) A transfer of the Company’s assets shall not be treated as a change in the
ownership of such assets if the assets are transferred to one or more of the
following:

     (1) A shareholder of the Company (immediately before the asset
transfer) in exchange for or with respect to Company Common Stock;

     (2) An entity, 50% or more of the total value or voting power of which
is owned, directly or indirectly, by the Company;

41

 

     (3) A person, or more than one person acting as a group (within the
meaning of paragraph (iii)(C)) that owns, directly or indirectly, 50% or
more of the total value or voting power of all of the outstanding stock of
the Company; or

     (4) An entity, at least 50% of the total value or voting power of which
is owned, directly or indirectly, by a person described in paragraph
(iii)(A)(3).

For purposes of this paragraph (iii)(A), and except as otherwise provided, a person’s status is
determined immediately after the transfer of assets.

     (B) For purposes of this paragraph (iii), gross fair market value means the
value of all Company assets, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.

     (C) For purposes of this paragraph (iii), persons shall be considered to be
acting as a group if they are owners of a corporation that enters into a merger,
consolidation, purchase, or acquisition of assets, or similar business transaction
with the Company. If a person, including an entity shareholder, owns stock in the
Company and another entity with which the Company enters into a merger,
consolidation, purchase, or acquisition of stock, or similar business transaction,
such shareholder shall be considered to be acting as a group with other Company
shareholders only to the extent of the ownership in the Company prior to the
transaction giving rise to the change and not with respect to the ownership interest
in the other corporation. Persons shall not be considered to be acting as a group
solely because they purchase or own stock of the same corporation at the same time,
or as a result of the same public offering.

     (iv) Attribution of Stock Ownership. For purposes of this Change of Control
definition, Section 318(a) of the Code shall apply to determine stock ownership. Common
Stock underlying a vested option shall be considered to be owned by the individual who holds
the vested option, provided that such vested option is exercisable for Common Stock that is
vested or substantially vested (as defined by Treasury Regulations Section 1.83(b) and (j)).
Common Stock underlying an unvested option is not considered to be owned by the individual
who holds the unvested option.

(v) Notwithstanding the foregoing, the following acquisitions of Company
securities shall not constitute a Change of Control: (1) any acquisition of Company
securities directly from the Company, (2) any acquisition of Company securities by
the Company, or (3) any acquisition of Company securities by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any affiliated
company.

(d) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any
successor thereto.

(e) “Committee” means the Committee referred to in Section 2 of the Plan. If at any time no
Committee shall be in office, then the functions of the Committee specified in the Plan may
be exercised by the Board, as set forth in Section 2 hereof.

(f) “Common Stock” means the common stock, no par value, of the Company.

(g) “Company” means PRG-Schultz International, Inc., a corporation organized under the laws
of the State of Georgia, or any successor corporation.

(h) “Disability” means a determination that a Participant (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months; (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to last for a continuous
period of not less than twelve (12) months, receiving income replacement benefits for a
period

42

 

not less than three (3) months under an accident and health plan covering employees of the
Company, or (iii) has been determined by the Social Security Administration to be totally
disabled.

(i) “Fair Market Value” means, as of any given date, unless otherwise determined by the
Committee in good faith, the average of the following over the thirty trading days preceding
such date:

	 	(i)	 	if the Common Stock is listed on an established stock exchange or
exchanges, or traded on the Nasdaq National Market System or Small Cap Market
(“Nasdaq”), the closing price of the Common Stock as listed thereon on the
applicable day;
	 
	 	(ii)	 	if the Common Stock is not listed on an established stock exchange or
Nasdaq but is instead traded over-the-counter, the mean of the dealer “bid” and
“ask” prices of the Common Stock in the over-the-counter market on the applicable
day, as reported by the National Association of Securities Dealers, Inc.; or
	 
	 	(iii)	 	if the Common Stock is not listed on any exchange or traded
over-the-counter, the value determined in good faith by the Committee.

(j) “Participants” shall mean those key employees who are granted Performance Units pursuant
to the terms and conditions of the Plan.

(k) “Performance Unit” means a right to payment from the Company in accordance with the
terms of the Plan pursuant to an award granted under Section 3 hereof.

(l) “Plan” means this 2006 Management Incentive Plan, as hereinafter amended from time to
time.

(m) “Termination Date” means April 30, 2016.

2. Administration

     Unless otherwise determined by the Board of Directors, the Plan shall be administered by the
Compensation Committee of the Board of Directors (the “Committee”). The functions of the Committee
specified in the Plan may be exercised by the Board, if and to the extent that no Committee exists
which has the authority to so administer the Plan and if a resolution to such effect is adopted by
the Board. Subject to the provisions of the Plan, the Committee shall have exclusive power to
select the key employees to be granted Performance Units, to determine the number of Performance
Units to be granted to each key employee selected and to determine the time or times when
Performance Units will be granted.

     The Committee shall have the authority to adopt, alter and repeal such rules, guidelines and
practices governing the Plan as it shall, from time to time, deem advisable; to interpret the terms
and provisions of the Plan and any award issued under the Plan (and any agreements relating
thereto); and to otherwise supervise the administration of the Plan.

     All decisions made by the Committee pursuant to the provisions of the Plan shall be made in
the Committee’s sole discretion and shall be final and binding on all persons, including the
Company and Participants.

3. Grants

     A maximum of 3,262,399 Performance Units may be issued hereunder, provided that at no time may
the sum of the number of Performance Units outstanding hereunder and the number of previously
issued Performance Units that have been paid out exceed 10% of the sum of (a) the Company’s
Adjusted Outstanding Shares, plus (b) the number of Performance Units outstanding hereunder, plus
(c) the number of previously issued Performance Units that have been paid out. As of September 1,
2006, 737,620 Performance Units may be issued hereunder. As the number of Adjusted Outstanding
Shares changes, the aggregate number of Performance Units that may be granted under this Plan shall
change proportionately. Of the aggregate Performance Units that may be issued hereunder, a minimum
of 40% shall be

43

 

reserved for issuance to the Company’s Chief Executive Officer. Performance Units shall be granted
to such key employees of the Company as the Committee shall determine. Upon the receipt of such a
grant of Performance Units, such employee shall be a Participant in the Plan. If any Performance
Units awarded under the Plan shall be forfeited or cancelled, such Performance Units shall again be
available for awards under the Plan. Performance Units shall be granted at such time or times and
shall be subject to such terms and conditions, in addition to the terms and conditions set forth in
the Plan, as the Committee shall, in its sole discretion, determine. No grants may be made under
the Plan following the Termination Date; however, if as of the Termination Date, Performance Units
remain available for grant under the Plan, the Committee may allocate the remaining Performance
Units to eligible Participants, in its discretion. To the extent that any such Performance Units
are allocated to employees other than the Chief Executive Officer, the Committee shall consult with
the Chief Executive Officer prior to any such allocation.

4. Performance Units

     Performance Units granted to a Participant shall be evidenced by a written agreement
(“Performance Unit Agreement”) and shall be credited to a Performance Unit account established and
maintained for such Participant. The Performance Unit account of a Participant shall be the record
of Performance Units granted to him under the Plan, is solely for accounting purposes and shall not
require a segregation of any Company assets.

5. Vesting of Performance Units

(a) Performance Units granted to a Participant shall vest in accordance with the schedule
agreed upon between the Committee and the Participant pursuant to the Performance Unit
Agreement.

(b) Notwithstanding anything contained in the Plan or any Performance Unit Agreement to the
contrary, all Performance Units granted to a Participant shall become fully vested upon a
Change of Control, upon the Company’s entering into a definitive agreement to effect a
Change of Control, upon the liquidation or dissolution of the Company or upon a
reorganization, merger, statutory share exchange or consolidation or similar corporate
transaction involving the Company or any of its subsidiaries, unless, following such
transaction, all or substantially all of the individuals and entities that were the
beneficial owners of the Company’s voting securities immediately prior to such transaction
beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting securities
entitled to vote generally in the election of directors, as the case may be, of the
corporation resulting from such transaction (including, without limitation, a corporation
that, as a result of such transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership immediately prior to such transaction.

6. Payment for Performance Units

(a) Payment for vested Performance Units shall be made in accordance with the payment
schedule set forth in, or established pursuant to, the Performance Unit Agreement entered
into with each Participant, provided that, in no event may any Participant receive payments
earlier than the dates and in excess of the cumulative amounts set forth below:

	 	 	 
	Payment Dates	 	Maximum Payment Amount
	March 17, 2008

	 	25% of the total Performance Units awarded to Participant
under the Plan
	March 17, 2009

	 	50% of the total Performance Units awarded to Participant
under the Plan
	March 17, 2010

	 	75% of the total Performance Units awarded to Participant
under the Plan
	March 17, 2011

	 	100% of the total Performance Units awarded to Participant
under the Plan

44

 

All payments made to a Participant under the Plan will be aggregated for purposes of
determining when the maximum for any period has been reached. All amounts not paid as of
April 30, 2016 will be distributed as soon as reasonably practicable thereafter.

Performance Units shall be paid out, subject to the restrictions above, according to the
following formula:

     A. Amount of payment =

Number of Performance Units scheduled for payment on the relevant payment
date (determined in accordance with the applicable Performance Unit
Agreement) X the Fair Market Value of the Company’s Common Stock as of the
payment date;

provided, however, that in the event that the Company’s shareholders approve
the issuance of Common Stock under the Plan, then at all times thereafter,
no Participant shall be entitled to the cash payment set forth in A. above,
but instead shall receive the following:

     B. A number of shares of Company common stock equal to 60% of the
number of Performance Units being paid out, plus

     A cash payment equal to 40% of the Fair Market Value of that number of shares of Common Stock equal to the number of Performance Units being paid
out.

(b) All payments under the Plan shall be subject to applicable tax withholding in accordance
with Section 10, and notwithstanding anything to the contrary contained in any Performance
Unit Agreement or in (a) above, in the event that there shall not be sufficient shares
reserved and available to allow the payment of Performance Units in Common Stock, such
Performance Units shall be paid in cash, in accordance with Section 6(a)(A), to the extent
of any shortfall, and in accordance with such rules and procedures as may be established by
the Committee from time to time.

(c) Notwithstanding the foregoing, upon occurrence of a Change of Control, or if the Company
is liquidated or dissolved, subject to compliance with Section 409A of the Code, each
Participant whose employment has not already terminated shall receive payment for all of his
or her Performance Units, whether or not previously vested, immediately prior to the
consummation of such event, calculated in accordance with 6(a)A or B above, as applicable.

(d) Notwithstanding the foregoing, upon the death or Disability of a Participant, the
Participant, or his or her executor, shall receive prompt payment in full, calculated in
accordance with 6(a)A or B above, as applicable, for all vested Performance Units.

(e) Notwithstanding the foregoing, upon the termination of a Participant’s employment with
the Company, for reasons other than death or Disability and which determination constitutes
a “separation from service” under Section 409A of the Code and applicable interpretations
thereof, whether with or without cause, the Participant shall receive payment in full,
calculated in accordance with 6(a)A or B above, as applicable, for all vested Performance
Units, such payment to be made as soon as reasonably practicable following the date which is
six months from the date of such termination (or if earlier the date of such Participant’s
death or Disability).

(f) Notwithstanding the foregoing, in no event shall the Company issue in excess of 2.1
million shares of Common Stock under this Plan, subject to automatic proportional adjustment
in the event of any recapitalization, reclassification, reorganization, stock split, reverse
stock split, combination of shares, stock dividend or similar transaction applicable to the
Common Stock as a whole.

7. Forfeiture of Performance Units

45

 

     If the employment of a Participant with the Company is terminated for any reason, except as
the result of a Change of Control or the liquidation or dissolution of the Company, all of such
Participant’s unvested Performance Units will terminate and be forfeited, and neither the
Participant nor his or her heirs, personal representatives, successors or assigns shall have any
future rights with respect to any such forfeited Performance Units. Vested Performance Units shall
not be forfeited and shall be paid out pursuant to Section 6.

8. Changes in Capital and Corporate Structure

     (a) In the event of any change in the number of outstanding shares of Common Stock by reason
of any recapitalization, reclassification, reorganization, stock split, reverse stock split,
combination of shares, stock dividend or similar transaction, the maximum number of Performance
Units that may be granted hereunder and the Adjusted Outstanding Shares, as well as the number of
Performance Units held by Participants under the Plan, shall automatically be proportionately
adjusted to reflect such event. In addition, upon any increase in the number of shares of Common
Stock outstanding as the result of conversions of the Company’s 10% senior convertible notes due
2011, 9% senior convertible series A preferred stock or 10% senior convertible series B preferred
stock, the number of Performance Units held by Participants under the Plan shall automatically be
proportionately adjusted to reflect such event. No adjustment will be made under this Section 8 to
any shares of Common Stock after they have been issued in payment of Performance Units in
accordance with Section 6. The decision of the Committee with respect to any such adjustment shall
be final.

     (b) In case of any reclassification of the Common Stock, any consolidation of the
Company with, or merger of the Company into, any other entity, any merger of any entity into
the Company (other than a merger that does not result in reclassification, conversion, exchange
or cancellation of the outstanding shares of common stock), any sale or transfer of
all or substantially all of the assets of the Company or any compulsory share exchange
whereby the common stock is converted into other certain securities, cash or other property, then
each Participant shall thereafter, to the extent that such Participant’s Performance Units are
payable in Company Common Stock, be paid, with respect to any Performance Unit, in the kind and
amount of securities, cash and other property receivable upon the reclassification, consolidation,
merger, sale, transfer or share exchange by a holder of the number of shares of common stock to
which the Participant would otherwise have been entitled. Any amounts payable in cash will remain
payable in cash, calculated in a comparable manner to the calculations set forth in Section 6(a)A
or B, as applicable.

9. Nontransferability

     Performance Units granted under the Plan, and any rights and privileges pertaining thereto,
may not be transferred, assigned, pledged or hypothecated in any manner, by operation of law or
otherwise, other than by will or by the laws of descent and distribution, and shall not be subject
to execution, attachment or similar process. In the event of a Participant’s death, payment of any
amount due under the Plan with respect to vested Performance Units shall be made to the duly
appointed and qualified executor or other personal representative of the Participant to be
distributed in accordance with the Participant’s will or applicable intestacy law.

10. Withholding

     The Company shall have the right to deduct from all amounts paid pursuant to the Plan any
taxes required by the Code or any other applicable law to be withheld with respect to such awards.

11. Voting and Dividend Rights

     Except for adjustments in the number of Performance Units as provided under Section 8, no
Participant shall be entitled to any voting rights, to receive any dividends, or to have his or her
Performance Unit account credited or increased as a result of any dividends or other distribution
with respect to the Common Stock of the Company.

12. Rights Unsecured; Unfunded Plan; ERISA.

46

 

(a) Unsecured and Unfunded. The Company’s obligations arising under the Plan to pay
benefits to any Participant or his Beneficiary constitute a mere promise by the Company to
make payments in the future in accordance with the terms of the Plan and each Performance
Unit Agreement. Each Participant and Beneficiary shall have the status of a general
unsecured creditor of Company. No Participant or Beneficiary shall have any rights in or
against any specific assets of Company, whether or not the Company, in its sole and absolute
discretion, acquires or segregates any assets for its anticipated obligations arising under
the Plan.

(b) ERISA. The Company’s obligations under the Plan shall be “unfunded” for income
tax purposes and for purposes of Title I of the Employee Retirement Income Retirement
Security Act of 1974, as amended (“ERISA”). The Company shall treat the Plan as maintained
for a select group of management and highly-compensated employees and therefore exempt from
Parts 2, 3 and 4 of Title I of ERISA. The Company shall comply with the reporting and
disclosure requirements of Part 1 of Title I of ERISA in accordance with U.S. Department of
Labor Regulation §2520.104-23.

13. Miscellaneous Provisions

(a) No employee or other person shall have any claim or right to be granted an award under
the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any
employee any right to continue to be retained in the employ of the Company.

(b) Except when otherwise required by the context, any masculine terminology in this
document shall include the feminine, and any singular terminology shall include the plural.

(c) The Plan is intended to be governed by the laws of the State of Georgia.

(d) Unless a registration statement pertaining thereto has been filed in the discretion of
the Company, any shares of Common Stock that may be issued pursuant to the Plan shall be
restricted under the Securities Act of 1933, as amended, and may not be resold without
registration or unless an exemption is available. All such shares shall bear a legend to
that effect.

(e) The Plan shall at all times be interpreted to comply with Section 409A of the Code and
any regulations promulgated thereunder.

14. Amendment of the Plan

     Except as required by law or by the rules of the Nasdaq National Market, to the extent the
Company’s Common Stock is listed thereon, the Board may alter or amend the Plan from time to time
in its discretion without obtaining the approval of the shareholders of the Company. No amendment
to the Plan may alter, impair or reduce the number of Performance Units granted under the Plan
prior to the effective date of such amendment without the written consent of any affected
Participant.

15. Effectiveness and Terms of Plan

     The effective date of the Plan shall be September 1, 2006. The Committee may, at any time,
terminate the Plan. No Performance Units shall be granted pursuant to the Plan after the
Termination Date, although after such date payments shall be made with respect to Performance Units
granted prior to the date of termination.

47

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