Document:

exv10w2

Exhibit 10.2

ASSET PURCHASE AGREEMENT

By and among

Braden Partners, L.P.

As Buyer

and

American Oxygen and Medical Equipment, Inc. and Arcadia Home Oxygen and Medical

Equipment, Inc.

and

Arcadia Products, Inc., RKDA, Inc., and Arcadia Resources, Inc.

As Sellers

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I — PURCHASE AND SALE OF ASSETS
	 	 	1	 
	1.1. Purchased Assets
	 	 	1	 
	1.2. Excluded Assets
	 	 	2	 
	1.3. Assignment of Third Party Real Property Leases; Subletting
	 	 	3	 
	 
	 	 	 	 
	ARTICLE II — NON-ASSUMPTION OF LIABILITIES
	 	 	3	 
	2.1. Non-Assumption of Liabilities
	 	 	3	 
	2.2. Assumed Liabilities
	 	 	3	 
	2.3. Excluded Liabilities
	 	 	3	 
	 
	 	 	 	 
	ARTICLE III — PURCHASE PRICE
	 	 	3	 
	3.1. Purchase Price
	 	 	3	 
	3.2. Adjustment to Purchase Price
	 	 	4	 
	3.3. Disputes Regarding Final Purchase Price
	 	 	8	 
	3.4. Allocation of Consideration
	 	 	8	 
	3.5. Transfer Taxes
	 	 	9	 
	 
	 	 	 	 
	ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF THE SELLERS
	 	 	9	 
	4.1. Organization and Qualification
	 	 	9	 
	4.2. Subsidiaries
	 	 	9	 
	4.3. Authority Relative to this Agreement
	 	 	9	 
	4.4. Compliance of Transaction With Laws and Other Instruments
	 	 	10	 
	4.5. Title to Purchased Assets; Liens
	 	 	11	 
	4.6. Tax Matters
	 	 	11	 
	4.7. Absence of Undisclosed Liabilities
	 	 	12	 
	4.8. Inventory
	 	 	12	 
	4.9. Food and Drug
	 	 	12	 
	4.10. Contracts, Real Property Leases, and Commitments
	 	 	12	 
	4.11. Patients
	 	 	13	 
	4.12. Permits; Governmental Agreements
	 	 	14	 
	4.13. Environmental Matters
	 	 	14	 
	4.14. Health Care Compliance
	 	 	14	 
	4.15. Compliance with Applicable Law; Adverse Restriction
	 	 	15	 
	4.16. Litigation
	 	 	16	 
	4.17. Finder’s Fee
	 	 	17	 
	4.18. Solvency
	 	 	17	 
	4.19. No Material Adverse Change
	 	 	17	 
	 
	 	 	 	 
	ARTICLE V — REPRESENTATIONS AND WARRANTIES OF BRADEN
	 	 	17	 
	5.1. Organization; and Qualification
	 	 	17	 
	5.2. Authority Relative to this Agreement
	 	 	17	 
	5.3. Compliance of Transaction With Laws and Other Instruments
	 	 	18	 
	5.4. Finder’s Fee
	 	 	18	 

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	 	 	Page	 
	ARTICLE VI — CERTAIN UNDERSTANDINGS AND AGREEMENTS
	 	 	18	 
	6.1. Expenses
	 	 	18	 
	6.2. Confidentiality
	 	 	18	 
	6.3. Further Assurances
	 	 	19	 
	6.4. Bulk Sales
	 	 	19	 
	6.5. Tax Returns
	 	 	19	 
	6.6. Reimbursement of Funds
	 	 	20	 
	6.7. Referrals
	 	 	20	 
	6.8. Rehired Employees
	 	 	20	 
	6.9. Patient Relationships
	 	 	21	 
	 
	 	 	 	 
	ARTICLE VII — CONDITIONS TO CLOSING
	 	 	21	 
	7.1. Conditions to Braden’s Obligations to Close
	 	 	21	 
	7.2. Conditions to the Sellers’ Obligations to Close
	 	 	21	 
	 
	 	 	 	 
	ARTICLE VIII — CLOSING DELIVERIES
	 	 	22	 
	8.1. Braden
	 	 	22	 
	8.2. Seller Entity
	 	 	22	 
	8.3. Joint Deliveries
	 	 	24	 
	 
	 	 	 	 
	ARTICLE IX — SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
	 	 	24	 
	9.1. Representations, etc.
	 	 	24	 
	9.2. Indemnification
	 	 	24	 
	9.3. Payment of Claims for Damages; Right of Setoff by Braden
	 	 	26	 
	9.4. Limitations on Indemnification
	 	 	26	 
	9.5. Notice; Defense of Claims
	 	 	26	 
	9.6. Sole Remedy
	 	 	27	 
	 
	 	 	 	 
	ARTICLE X — ARBITRATION
	 	 	27	 
	10.1. Arbitration Rules
	 	 	27	 
	10.2. Binding Effect of Arbitration
	 	 	28	 
	 
	 	 	 	 
	ARTICLE XI — MISCELLANEOUS PROVISIONS
	 	 	28	 
	11.1. Entire Agreement: Amendment
	 	 	28	 
	11.2. Assignment and Binding Effect
	 	 	28	 
	11.3. Waivers
	 	 	28	 
	11.4. Notices
	 	 	28	 
	11.5. Governing Law
	 	 	29	 
	11.6. No Third Party Beneficiaries
	 	 	29	 
	11.7. Counterparts; Execution
	 	 	29	 
	11.8. Effect of Headings
	 	 	29	 
	11.9. Severability
	 	 	30	 
	11.10. Construction; Complete Agreement
	 	 	30	 
	11.11. Certain Definitions
	 	 	30	 
	11.12. Schedules and Exhibits
	 	 	31	 

ii

 

SCHEDULES

TITLE

4.1 Organization and Qualification

4.4 Compliance of Transaction With Laws and Other Instruments

4.5(a) Title to Purchased Assets; Liens

4.5(c) Title to Purchased Assets; Liens

4.6 Tax Matters

4.8 Inventory

4.10 Contracts, Real Property Leases, and Commitments

4.11(a) All Active Rental Patients

4.11(b) All Qualified Files

4.12 Permits; Governmental Agreements

4.14 Healthcare Compliance

4.16 Litigation

4.17 Finder’s Fee

iii

 

EXHIBITS

Exhibit A Form of Non-Compete Agreement

Exhibit B Form of Bill of Sale

Exhbit C Form of Sublease Agreement

iv

 

ASSET PURCHASE AGREEMENT

     This ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of this 19th day of
May, 2009 by and among Braden Partners, L.P., a California limited partnership (“Braden”), American
Oxygen and Medical Equipment, Inc., an Illinois corporation, also doing business as Remedy
Therapeutics; and Arcadia Home Oxygen and Medical Equipment, Inc., a Michigan corporation, also
doing business as Arcadia H.O.M.E, (collectively, the “Seller Entity”), and Arcadia Products, Inc.,
a Delaware corporation; RKDA, Inc, a Michigan corporation, and Arcadia Resources, Inc., a Nevada
corporation, as shareholders of Seller Entity (the “Shareholders”). The Shareholders and the
Seller Entity are referred to collectively herein as the “Sellers.”

     Certain terms used herein and not defined shall have the meaning set forth in Section 11.11
hereof.

RECITALS

     WHEREAS, the Seller Entity has been and is currently in the business of providing oxygen,
oxygen equipment, compressed oxygen products, nebulizers, sleep therapy equipment, and respiratory
and sleep therapy related products, supplies and services in and around Illinois, Indiana and
Kentucky (such business shall be referred to herein as the “Business”);

     WHEREAS, Braden desires to purchase, and the Sellers desire to sell, substantially all of the
assets relating to the Business of the Seller Entity, upon the terms and conditions hereof.

     NOW, THEREFORE, in consideration of the mutual promises herein made, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged,

     IT IS AGREED AS FOLLOWS:

ARTICLE I — PURCHASE AND SALE OF ASSETS

     1.1. Purchased Assets

     Subject to and upon the terms and conditions hereof, and in reliance upon the representations,
warranties, covenants and agreements made herein by each party to the other, on the Closing Date
(as defined in Article VIII), the Sellers hereby agree to sell, transfer, assign, convey and
deliver to Braden, and Braden hereby agrees to purchase and acquire from the Sellers, wherever
located, free and clear of all liens, claims, encumbrances, charges, liabilities or obligations of
every kind and nature whatsoever (collectively, “Liens”), all right, title and interest to and in
all of the assets, properties and rights of the Seller Entity of every nature, kind and
description, tangible and intangible, and any such assets of the Shareholders used in or directly
related to the Business, including confidentiality and non-compete agreements for the benefit of
Seller Entity, except to the extent that any such assets form a part of the Excluded Assets as
defined in Section 1.2 below, (collectively, the “Purchased Assets”).

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     1.2. Excluded Assets

     Anything contained in this Agreement to the contrary notwithstanding, the following rights,
properties and assets (the “Excluded Assets”), shall be retained by the Seller Entity and shall not
be included in the Purchased Assets:

          (a) Cash. Cash or cash equivalents of the Seller Entity and all rights of the
Seller Entity to deposits, prepaid expenses, security deposits, prepaid insurance, claims for
refunds and rights to offset in respect thereof.

          (b) Bank Accounts. Bank accounts of the Seller Entity.

          (c) Accounts and Accounts Receivable. The accounts, accounts receivable or notes
receivable, whether or not current, arising out of the Business for services provided prior to the
Closing Date (the “Accounts Receivable”).

          (d) Tax Refunds. All refunds and deposits of all federal, state, local and foreign
taxes due to any of the Sellers with respect to the Business for any period.

          (e) Corporate Records. The Seller Entity’s corporate stock record books, corporate
record books containing minutes of meetings of the directors and stockholders of the Seller Entity,
and all other records related to the Seller Entity’s corporate organization and capitalization, tax
records and returns, schedules of depreciation and financial statements; provided
that, the Seller Entity will retain all such records in accordance with its current record
keeping policies and shall, upon the request of Braden (which request shall include, in reasonable
detail, the reasons for requiring such information) and upon reasonable advance notice, make such
records available for Braden’s inspection and copying during normal business hours.

          (f) Insurance. All insurance policies owned by Sellers and rights to collect
insurance proceeds under policies owned by Sellers.

          (g) Provider Numbers and Agreements. Medicare, Medicaid and all other third party
provider numbers and agreements.

          (h) Personnel Records. All personnel records that the Seller Entity is required to
retain in its possession and all rights in connection with the assets of any employee benefit
plans.

          (i) Written Materials. All stationery, purchase orders and sale order forms,
invoices, brochures, advertising materials and similar items.

          (j) Permits and Licenses. All permits and licenses of the Business.

          (k) Inactive Patients and Patient Files. Any patient or patient file not listed on
Schedule 4.11(a).

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     1.3. Assignment of Third Party Real Property Leases; Subletting

     Sellers will assign all rights and interests in the real property leases in Peoria, Illinois
and Jackson, Kentucky, as specified in Schedule 4.10, together with office space, appurtances,
fixtures and improvements on the leased property, and will sublet the Business locations in
Crystal Lake, Illinois and Jacksonville, Illinois to Braden on a month-to-month basis at Seller’s
cost for a period not to exceed Seller’s present lease obligations on those locations. Braden will
not assume any other real property leases or obligations of Sellers; provided however, Braden will
be permitted access to Sellers’ Crown Point, Indiana facility for the purpose of removing the
Purchased Assets from the premises through and including May 31, 2009.

ARTICLE II — NON-ASSUMPTION OF LIABILITIES

     2.1. Non-Assumption of Liabilities

     Other than with respect to the Assumed Liabilities (as defined in Section 2.2 below), on the
Closing Date Braden will not assume, agree to perform, discharge or indemnify the Sellers against
or otherwise have any liability or obligation with respect to, any liability, debt, contract or
obligation of the Seller Entity.

     2.2. Assumed Liabilities

     Upon the sale and purchase of the Purchased Assets, Braden will assume only the liabilities,
responsibilities and obligations arising out of, resulting from, or relating to the use and
ownership of the Purchased Assets by Braden after the Closing or the conduct of the Business by
Braden after the Closing (collectively, the “Assumed Liabilities”). The Assumed Liabilities shall
specifically not include any severance obligations of the Seller Entity or the Shareholders with
respect to any officers or employees of the Seller Entity terminated in connection with the
transactions contemplated hereby.

     2.3. Excluded Liabilities

     For purposes hereof the term “Excluded Liabilities” means any and all liabilities,
responsibilities and obligations not listed in Section 2.2.

ARTICLE III — PURCHASE PRICE

     3.1. Purchase Price

     In reliance on the representations and warranties of the Sellers contained herein, and in
consideration of the aforesaid sale, assignment, transfer and delivery of the Purchased Assets,
Braden shall pay to the Seller Entity in full payment for the Purchased Assets and in full payment
for the agreements of Sellers herein and in the attached Exhibits, and subject to the provisions of
Sections 3.1 and 3.2, the amount of Four Million Dollars and No Cents ($4,000,000) (the “Purchase
Price”). The Purchase Price is payable by Braden (subject to Section 9.2 hereof) as follows:

3

 

          (a) On the Closing Date, Braden will pay an amount equal to seventy-five percent (75%) of the
Purchase Price as the same may be adjusted pursuant to Section 3.2 (a) (the “Closing Payment”) to
the Seller Entity (or directly to the Shareholders if so directed by the Seller Entity) by wire
transfer to an account or accounts designated by the Seller Entity.

          (b) Subject to any further adjustment made pursuant to the provisions of Section 3.2 hereof,
on the fifteenth (15th) day following the date that is six (6) months after the Closing
Date, (such day being the “Deferred Disbursement Date”), Braden shall pay to the Seller Entity an
additional amount (“Adjusted Payment”) such that the total received by the Seller Entity, including
both the Adjusted Payment and the Closing Payment, shall equal ninety percent (90%) of the Purchase
Price subject to any adjustment(s) pursuant to the provisions of Section 3.2(b).

          (c) On the fifteenth (15th) day following the date that is twelve (12) months
following the Closing Date (the “Final Disbursement Date”), Braden shall pay to the Seller Entity
by wire transfer an additional amount (“Final Disbursement”) such that the total received by the
Seller Entity shall be equal to one hundred percent (100%) of the Purchase Price, subject to any
adjustment(s) pursuant to the provisions of Section 3.1(d) and 3.2 (b).

          (d) Notwithstanding anything herein to the contrary, Braden shall have a right of setoff
against any or all amounts owed by Braden to the Seller Entity pursuant to this Section 3.1 with
respect to any unpaid indemnity claims made pursuant to Section 9.2 and subject to Section 9.3
hereof. In the event that Braden shall have asserted against Sellers any claim(s) for
indemnification pursuant to Section 9.2 or 9.3 hereof and such claim(s) shall not have been
resolved prior to the Final Disbursement Date, then Braden’s obligation to make such payment shall
be deferred until resolution under Article X with respect to such claims is reached, in an amount
equal to the aggregate amount of all such claims. Braden shall not be required to pay any interest
on deferred payments. Upon resolution under Article X of such claims, Braden shall pay to the
Seller Entity such amount of the deferred Purchase Price, as reduced by the indemnification amount
resolved to be due to Braden, if any, as a result of such claims.

          (e) Braden and certain of the Sellers are parties to a Purchase and Sale Agreement dated as of
January 6, 2009 relating to Braden’s purchase of assets of a separate business owned by certain of
the Sellers and their Affiliates (the “O2 Agreement”). Braden has asserted claims for
indemnification and adjustments to the purchase price under the O2 Agreement, which claims certain
of the Sellers and their Affiliates dispute. Braden agrees that it shall not withhold or adjust
amounts due to Sellers under this Agreement for claims under the O2 Agreement. Notwithstanding
the foregoing, Sellers agree that Braden shall be entitled to withhold or adjust amounts due to
Sellers under this Agreement (i) for any binding and finally resolved or adjudicated claims arising
from the O2 Agreement, and (ii) subject to the limitations on claims set forth in the O2 Agreement,
including but not limited to the provisions of Section 9.4 thereof.

     3.2. Adjustment to Purchase Price

          (a) Adjustments to Closing Payment at Closing Date. The Closing Payment shall be (i) reduced
by the total of all amounts billed by Seller Entity during the fifteen (15) days

4

 

prior to the Closing Date in the ordinary course, representing payment to Braden to render
services on and after the Closing Date that have been billed in advance by the Seller Entity; and
(ii) increased by the total of any agreed amounts representing payment to the Seller Entity for
rendering services after the Closing Date, but before Braden assumes operating responsibility. The
Seller Entity shall not bill for any Billing Cycles that commence on or after the Closing Date.
The adjustment referenced in Section 3.2(a)(i) above shall include only amounts billed for
recurring rental equipment during the current Billing Cycle and shall not include any billings for
prior services provided by Sellers. In addition, the adjustment shall exclude any purchase
conversions billed during the fifteen (15) days prior to the Closing Date unless the patient is
shown as actively renting the purchased item on Schedules 4.11(a) or 4.11(b).

          (b) Adjustments at Deferred Disbursement Date. On the Deferred Disbursement Date, the
Purchase Price may, at Braden’s election, be adjusted if the number of Oxygen Qualified Files and
Sleep Qualified Files are fewer than the number listed on Schedule 4.11(b).

          (i) Except as provided in Section 3.2(b)(iii), if the number of Qualified Files meeting
the standards included in their respective definitions at Section 3.2 (c) as of the Deferred
Disbursement Date is fewer than the number of Qualified Files scheduled by Sellers in
Schedule 4.11(b), the Purchase Price shall be reduced by an amount equal to the total of:
(i) the difference between the number of Oxygen Qualified Files scheduled in 4.11(b) and the
number of actual Oxygen Qualified Files as of the Deferred Disbursement Date multiplied by
Two Thousand Five Hundred Dollars ($2500.00), plus (ii) the difference between the number of
Sleep Qualified Files in Schedule 4.11(b) and the number of actual Sleep Qualified Files as
of the Deferred Disbursement Date multiplied by Five Hundred Dollars ($500.00); provided
however that the Purchase Price will not be adjusted unless the cumulative total amount of
the adjustments relating to Qualified Files in this Section 3.2(b)(i) and the adjustments
relating to equipment in Section 3.2 (b)(iv) is greater than One Hundred Thousand Dollars
($100,000) (“The Threshold”). In the event that the cumulative total amount of adjustments
relating to Qualified Files exceeds the Threshold, then the Purchase Price will be reduced
under this Section 3.2(b)(i) by the amount that such adjustment relating to Qualified Files
exceeds the Threshold.

          (ii) A Qualified File that is listed on Schedule 4.11(b) as both an active Qualified
Oxygen File and an active Qualified Sleep File will result in a total adjustment of Three
Thousand Dollars ($3,000) if the file fails to qualify under the criteria for both oxygen
and sleep rental services.

          (iii) In the event that Braden gives notice that the provisions of Section 3.2(h) for
an Enhanced Purchase Price Adjustment have been met, then the Purchase Price adjustment
reduction shall be calculated at the amounts of Five Thousand Dollars ($5,000) for every
Oxygen Qualified File transferred or discontinued from service and One Thousand Dollars
($1,000) for each Sleep Qualified File transferred or discontinued from service. Braden
shall be entitled to claim this “Enhanced Purchase Price Adjustment” reduction for each
transferred or discontinued Qualified File listed on Schedule 4.11(b) and for each file
listed on Schedule 4.11(a) that subsequently meets the
criteria in Section 3.2(c) after the Closing Date through the efforts of Braden.

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          (iv) Braden shall be entitled to reduce the Purchase Price for oxygen concentrators and
home fill systems that fail to conform to manufacturers’ specifications by the amounts of
One Thousand Dollars ($1,000.00) for each non-conforming home fill system and Four Hundred
Dollars ($400.00) for each non-conforming concentrator. A concentrator shall be deemed
non-conforming only if the non-conformity is such that Braden takes the unit out of service
and disposes of it. If Braden elects to reduce the Purchase Price for non-conforming
assets, Braden will document the make, model, and serial number of each non-conforming home
fill system or concentrator, describe the substandard operating condition (including but not
limited to accurate liter flow readings, minimum purity, working alarms, warning lights and
indicators operative and at a reasonable decibel level, and breakage) and provide same to
the Seller Entity on a monthly basis. This Section 3.2(a)(iv) shall not apply to units on
hand that have been taken out of service and are properly tagged at the Closing Date as
awaiting disposal.

          (c) Certain Definitions. For the purposes of this Section 3.2, a patient file
included in the Purchased Assets is defined as a “Qualified File” only if all of following
conditions are met: (i) The patient file as and when transferred by Seller Entity has complete
paperwork necessary at the Closing Date, including accurate patient contact and insurance
information, valid orders and prescriptions, valid pre-authorizations, wet ink initial and
recertification CMNs (if required), proof of physician visits, all relevant qualifying tests, proof
of patient adherence and other medical records necessary to support billing to Medicare or the
appropriate insurer, as determined by written guidance from insurers; provided, however, such
paperwork must be in the file or available to Braden only if the paperwork is required by the
applicable payor in order to prove medical necessity for the equipment or services billed; (ii) on
the Closing Date the patient is actively served by the Seller Entity and is using the equipment
provided; and (iii) the patient is insurance-eligible and executes a valid assignment of benefits
in favor of Braden within three (3) months of the Closing Date; and, (iv) the patient files, which
meet all of the above three requirements, must represent a patient that is on active and billable
service with Braden for at least three (3) Billing Cycles following the Closing Date; provided
however, that any patient file meeting all of the above requirements that is billed by Braden, and
for which Braden receives at least one (1) Billing Cycle, but subsequently becomes ineligible due
to death or residence in a long term care facility or hospital, is a Qualified File. In
determining whether a patient file is a Qualified File, Braden is entitled to rely upon its billing
experience from the Closing Date to the Deferred Disbursement Date; provided however, that Braden
will submit only those claims to insurers that are, in Braden’s sole discretion, adequately
supported by medical necessity and required documentation and for which the beneficiary has agreed
to an assignment of insurance benefits to Braden. With respect to qualifying tests referenced in
Subsection 3.2(c)(i), a patient file will be considered “Qualified” unless Braden determines that
the qualifying tests are not contained in the file, the qualifying test (or other similar
information in the patient notes) cannot be obtained from the physician or testing entity after
reasonable diligence to obtain such information, and the patient fails to qualify after subsequent
retesting. A patient shall be deemed to have failed to qualify if, after exercising commercially
reasonable efforts, Braden is unable to perform retesting for any reason, including a physician’s
refusal to order the test, a patient’s refusal to be tested, a patient’s relocation, or death.
With respect to valid order and prescriptions referenced in Subsection 3.2(c)(i), a patient file
will be considered

6

 

“Qualified” provided the necessary information is set forth in an appropriate document within
the file, including a valid CMN. “Wet ink” CMNs are required only where the applicable payor does
not accept facsimile CMNs as a basis for billing patient services.

          (d) For purposes of the Purchase Price Adjustment only, a patient file being served by the
Seller Entity or by Braden is defined as an “Oxygen Qualified File” only if all of the requirements
of 3.2(c) are met, and the file represents a medically necessary and appropriate presently active
rental of an oxygen concentrator or liquid oxygen system and related oxygen equipment and supplies
listed on Schedule 4.11(b) as producing insurance-paid reimbursement at a monthly allowable rental
rate in an amount equal to no less than One Hundred and Forty Five Dollars ($145.00) per month at
rental rates for each Billing Cycle specified in 3.2(c)(iv).

          (e) For purposes of the Purchase Price Adjustment only, a patient file being served by the
Seller Entity or by Braden is defined as a “Sleep Qualified File” only if all of the requirements
of 3.2(c) are met, and the file represents a medically necessary and appropriately documented
presently active rental of a sleep blower unit device for each Billing Cycle specified in
3.2(c)(iv).

          (f) On or before the date that is Ninety (90) days after the Closing Date, Braden shall
provide a report of Qualified Files listed on Schedule 4.11(b) that have not conformed to the
requirements of Section 3.2(c), together with a brief identification of the deficient paperwork.
Braden agrees to provide Sellers with an updated report on a monthly basis thereafter until Braden
elects to provide notice of a claim to adjust the Purchase Price under this Section 3.2, which
claim may be made at any time before the Final Disbursement Date. For each such claimed
adjustment, Braden shall provide a specific reason or reasons it has determined that such file
fails to conform to the requirements of Section 3.2 (c).

          (g) Notwithstanding the foregoing, if Braden establishes that the failure of a file to meet
the requirements of Section 3.2 (c) is the result of a separate and independent breach of a
specific representation or warranty in this Agreement, Braden may pursue its remedies for that file
under the indemnification provisions of Article IX upon proof of actual losses, which shall not be
determined by reference to or limted by the agreed adjustments to Purchase Price for Oxygen
Qualified Files and Sleep Qualified Files. For any file that Braden determines it will not accept
a Purchase Price adjustment as the sole recourse for such failure, Braden shall notify Sellers to
that effect no later than sixty (60) days after determining that the patient file is not an “Oxygen
Qualified File” or a “Sleep Qualified File” or on the Deferred Disbursement Date, whichever is
later. Braden shall be bound by that election and shall not be entitled to any Purchase Price
adjustment for that file. If Braden agrees to accept an adjustment of the Purchase Price pursuant
to this Section 3.2 and Seller agrees to the adjustment, such adjustment shall be the sole recourse
under this Agreement for losses suffered as the result of the failure of any patient file to meet
the definitions of a Qualified File under Section 3.2(c).

          (h) Braden is entitled to the enhanced Purchase Price adjustments for Qualified Files as set
forth in Section 3.2 (b)(iii) or for any file that meets the criteria in Section 3.2(c) at any time
after the Closing Date through the efforts of Braden if: (i) any employee who was actively employed
by Seller Entity as of May 1, 2009 fails to continue employment with Braden following the Closing
Date, and (ii) the employee enters into any direct or indirect

7

 

relationship with a competitor of Braden’s following the Closing Date and before the
applicable disbursement date, and (iii) active rentals scheduled by Seller Entity on Schedule 4.11
(a) are transferred from service with Braden to service with such competitor of Braden. A direct
or indirect relationship shall include, but is not limited to, any relationship defined as a
financial relationship under the Stark Law. For purposes of establishing a causal connection
between the acts of the employee and the transfer of active rentals to a competitor, Braden may
proffer evidence of: (i) specific acts by the employee or persons associated with the employee,
or (ii) a pattern of patients who transfer service as the result of physician orders, physician
recommendations, or patient requests that are unexplained, inadequately explained, or commercially
unusual, or (iii) patient-verified affidavits concerning the reason for the transfer, or (iv)
other reliable evidence, or (v) a combination of any of the above. The Enhanced Purchase Price
Adjustment shall apply only to those files that are transferred or discontinued as the result of
the pattern of activity addressed in this Section 3.2(h); provided however, that if Braden provides
credible evidence of a relationship and a pattern of transferral of patient files, then the
Enhanced Purchase Price Adjustment shall apply to all similarly discontinued or transferred files.

     3.3. Disputes Regarding Final Purchase Price 

     If Seller disputes the calculation of the Purchase Price, Sellers shall give timely written
notice to Braden no later than thirty (30) calendar days following the Final Disbursement Date (the
“Dispute Notice”), which Dispute Notice shall specify the reasons for such disagreement, the amount
of any adjustments that are necessary in Sellers’ judgment for the computation of the Purchase
Price and the basis for Sellers’ suggested adjustment. If the parties resolve their differences
over the disputed items in accordance with the foregoing procedures, the final determination of the
Purchase Price as determined by the preceding sentence shall be the amount agreed upon. If Sellers
and Braden are unable to resolve the disputed matters outstanding within the thirty (30) day period
following Braden’s receipt of the Dispute Notice, all disputed matters not so resolved shall be
submitted to arbitration in accordance with the provisions of Article X of this Agreement.

     3.4. Allocation of Consideration

     Braden shall allocate the Purchase Price (and all other capital costs) among the Purchased
Assets applying the Purchase Price to goodwill to the extent allowable consistent with generally
accepted accounting principles and deliver a written copy thereof to Sellers within ninety-five
(95) days of the Closing Date. Such allocation shall be made in accordance with the provisions of
Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”), and shall be binding
upon Braden and Sellers for all purposes (including financial accounting purposes, financial and
regulatory reporting purposes and Tax purposes). Each of the parties agrees to file appropriate
documents with the IRS under Section 1060 of the Code reflecting the foregoing. Notwithstanding
any allocation of the Purchase Price made by the parties hereto pursuant to this Agreement or any
other agreement delivered pursuant hereto, Braden shall be entitled to recover the full amount of
any damages incurred from any breach of the non-compete agreement by and among Braden and the
Sellers (the “Non-Compete Agreement”) attached hereto as Exhibit A in

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accordance with the terms therein without reference to the amount allocated thereto by the parties.

     3.5. Transfer Taxes

     Braden hereby waives compliance by the Sellers with the bulk sales laws of any country or
state, it being expressly understood and agreed that this Section 3.5 shall not be deemed an
admission or acknowledgment that any such law is applicable to the transactions contemplated by
this Agreement. Sellers shall be solely responsible for payment of any bulk sales taxes, if any,
that are assessed against Sellers or Braden, in addition to any California State taxes due as the
result of sales and operations prior to the Closing Date. The parties shall cooperate with each
other to the extent reasonably requested and legally permitted to minimize any such Sales Tax.

ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF THE SELLERS

     In order to induce Braden to enter into this Agreement, the Sellers jointly and severally make
the following representations and warranties to Braden, which will be true and complete as written
on the Closing Date, subject to the exceptions as are specifically disclosed in the disclosure
schedules delivered by the Sellers on or before the Closing Date:

     4.1. Organization and Qualification

The Seller Entity is a corporation duly organized, validly existing and, except as set forth in
Schedule 4.1, in good standing under the laws of the jurisdiction of its incorporation. The Seller
Entity has all requisite corporate power and corporate authority to own, lease and operate its
properties and to carry on its business as now being conducted . The Seller Entity is duly
qualified to conduct its affairs in each jurisdiction in which it operates, except where such
nonqualification would not reasonably be expected to have a material adverse effect. The Seller
Entity has delivered to Braden complete and correct copies of its Articles of Incorporation and
Bylaws, or applicable governing documents, in each case as amended to the date hereof.

     4.2. Subsidiaries

With the exception of the subsidiary or Affiliate relationship between any corporations
constituting the Seller Entity, the Seller Entity does not hold, directly or indirectly, any
equity, partnership, joint venture, membership or other interest in or control over any Person or
legally cognizable entity.

     4.3. Authority Relative to this Agreement 

          (a) The Seller Entity has all requisite right, corporate power and corporate authority to
execute, enter into and deliver this Agreement and any agreement or document contemplated hereby,
and to consummate the transactions contemplated hereby. The Shareholders have full right, legal
authority, and legal power to enter into this Agreement and each agreement, document and instrument
to be executed and delivered by or on behalf of him or her pursuant to this Agreement and to carry
out the transactions contemplated hereby and thereby.

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          (b) The execution, delivery and performance by the Seller Entity of this Agreement and each
agreement, document and instrument contemplated hereby have been duly authorized by all necessary
action of the Seller Entity and the Shareholders.

          (c) This Agreement, and all agreements or documents contemplated hereby, have been duly
executed and delivered by the Seller Entity and the Shareholders and the obligations imposed on the
Seller Entity and the Shareholders by this Agreement, or by any agreement or document contemplated
hereby, constitute the valid and binding obligations and agreements of the Seller Entity and the
Shareholders, respectively, enforceable against the Seller Entity or the Shareholders, as the case
may be, in accordance with its terms, except: (i) that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors rights; and (ii) that the remedy of specific performance, and injunctive and
other forms of equitable relief, may be subject to equitable defenses and to the discretion of the
court before which any proceeding therefore may be brought.

          (d) None of the Shareholders has exercised or has the right to exercise any shareholder
dissenter rights as provided under applicable state law and none of the Shareholders has any claim
against Braden in connection with the transactions contemplated by this Agreement and the Exhibits
hereto.

     4.4. Compliance of Transaction With Laws and Other Instruments

The execution, delivery and performance by Sellers of this Agreement, and the other agreements and
documents contemplated hereby and the performance and consummation of the transactions contemplated
hereby by Sellers:

          (a) do not require on behalf of the Seller Entity or the Shareholders any approval, consent,
order or authorization of or registration, declaration or filing with, any governmental agency,
court, or other authority federal, state, local or otherwise (a “Governmental Authority”) which has
not been obtained and which is not in full force and effect as of the date hereof;

          (b) does not and will not conflict with, or result in a breach or violation of any provision
of the Articles of Incorporation or Bylaws, or any applicable governing documents, of the Sellers;

          (c) does not and will not result in a violation of any law, regulation, statute, ordinance,
rule, judgment, writ, injunction, license, permit, order or decree of any Governmental Authority to
which the Seller Entity, the Shareholders or the Purchased Assets are subject, the effect of which
would be adverse to the Purchased Assets or require the Sellers to obtain any approval, consent or
waiver of, or make any filing with, any Person (governmental or otherwise) that has not been
obtained or made;

          (d) does not and will not result in the creation or imposition of any Lien on any of the
Purchased Assets; and

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          (e) except as indicated on Schedule 4.4, does not and will not require the approval,
consent or waiver of, or filing with any party to, violate or conflict with or result in a breach
of, or constitute a default or acceleration of or give rise to a right of termination (or an event
which with notice or lapse of time or both would become a default) under, any provision of any
contract, indenture, mortgage, lease, agreement or other instrument directly or indirectly
associated with or related to the Purchased Assets and to which the Seller Entity or the
Shareholders are a party or by which the Purchased Assets or the Seller Entity is subject.

     4.5. Title to Purchased Assets; Liens

          (a) Except as specifically disclosed in Schedule 4.5(a), the Sellers have good and (if
applicable) marketable title to all of the Purchased Assets. The Sellers will sell and transfer
the Purchased Assets to Braden free and clear of all Liens, including, without limitation, Liens
for Taxes. Except as set forth on Schedule 4.5(a), none of the Purchased Assets is subject to any
Liens except for (i) Liens for Taxes not yet due and payable and (ii) Liens arising by operation of
law which could not be expected to materially affect the value or use of the Purchased Assets.
Except as set forth on Schedule 4.5(a), the Purchased Assets are subject to no restrictions
with respect to the transferability thereof and the Purchased Assets may be lawfully transferred to
Braden without the consent of any third party.

          (b) Condition of Purchased Assets. The Purchased Assets are in good and lawful
working condition, excepting ordinary wear and tear.

          (c) Customer Information. Except as disclosed on Schedule 4.5(c), the Seller
Entity has not sold or otherwise released for distribution any of its customer files and other
customer information relating to any of the current customers of the Seller Entity including, but
not limited to, patient lists, marketing and pricing information and customer and referral source
information (the “Customer Information”), and transfer of the Customer Information by Seller Entity
to Braden does not constitute a violation of the Seller Entity’s obligations to any Person. To the
Seller’s Knowledge, and except as set forth on Schedule 4.5(c), no Person other than the Seller
Entity possesses any claims or rights with respect to use of the Customer Information, as it has
been maintained in confidence and in accordance with applicable state laws and the Health Insurance
Portability and Accountability Act of 1996 or regulations thereunder, (known as “HIPAA”).

     4.6. Tax Matters

          (a) All Taxes owed by Seller Entity (whether or not shown on any Return) have been paid in
full when due and all amounts required to be withheld by Seller Entity as of the Closing Date for
Taxes or otherwise, have been withheld and paid when due or will be paid when due to the
appropriate agency or authority or which are not yet delinquent or are being contested in good
faith.

          (b) Except as set forth on Schedule 4.6, neither the Internal Revenue Service nor any other
governmental authority is now asserting or, to the Knowledge of Sellers, threatening to assert
against the Seller Entity any deficiency or claim for additional Taxes. No claim has ever been
made by an authority in a jurisdiction where the Seller Entity does not file

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reports and returns that the Seller Entity is or may be subject to taxation by that
jurisdiction. There are no security interests on any of the assets of the Seller Entity that arose
in connection with any failure (or alleged failure) to pay any Taxes. The Seller Entity has never
entered into a closing agreement pursuant to Section 7121 of the Code.

          (c) The Seller Entity does not own nor has ever owned a direct or indirect interest in any
trust, partnership, corporation or other entity and therefore Buyer is not acquiring from any of
the Sellers an interest in any entity. The Seller Entity is not a party to any tax sharing
agreement.

     4.7. Absence of Undisclosed Liabilities

The Seller Entity has not been notified (in writing, verbally, electronically, or otherwise) and
has no Knowledge of any material liability, claim, deficiency, guarantee, or obligation (absolute,
accrued, contingent or otherwise) that would or may in the future have an adverse effect upon the
Purchased Assets. The Seller Entity has not been notified (in writing, verbally, electronically,
or otherwise) and has no Knowledge of any intended reduction in the present level of the Business
after the Closing as a result of this Agreement and the transactions contemplated hereby.

     4.8. Inventory

The inventory of the Seller Entity was acquired in the ordinary course of the Business and, except
as set forth on Schedule 4.8, within the past one hundred and fifty (150) days has not been
distributed to locations not included in the Business.

     4.9. Food and Drug

To its Knowledge, the Seller Entity and all of the products and services which it imports,
distributes, or provides are, and have at all times been, in compliance with the Food, Drug and
Cosmetic Act and all regulations promulgated there under by the United States Food and Drug
Administration.

     4.10. Contracts, Real Property Leases, and Commitments

          (a) All contracts, real property leases, and legally binding commitments that are related and
material to the Business to which any Seller Entity is a party are described in Schedule
4.10 and true and complete copies of such have been delivered to Braden.

          (b) To Seller’s Knowledge, no party to any contract described in Schedule 4.10 is in
material default under any such contracts andthere are no conditions or facts which with notice or
passage of time, or both, would constitute a default.

          (c) No Seller has given any power of attorney that is currently in effect, to any Person for
any purpose whatsoever in connection or associated with or in any way affecting any of the
Purchased Assets, except pursuant to this Agreement or documents required hereby.

          (d) All rental payments on the contracts, real property leases, and legally binding
commitments that are due and payable as of the Closing Date have been paid by Seller

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Entity, together with any interest, penalties, maintenance charges and assessments pertaining
thereto. Seller Entity has obtained all necessary consents to the assignment of all contracts,
real property leases, and commitments that are required for assignment to Braden.

     4.11. Patients

          (a) Schedule 4.11(a) lists substantially all of the active rental and sleep supply patients
of the Seller Entity being served by the Seller Entity as of May 8, 2009. For each patient,
Schedule 4.11(a) lists the name and account number of the patient, all residential addresses for
the patient, the equipment, medications, products or services currently supplied by the Seller
Entity to such patient on a sale or rental basis, and the primary payor.

          (b) Schedule 4.11(b) lists those active rental patients that are Qualified Files of the Seller
Entity as of May 8, 2009. For each patient, Schedule 4.11(b) lists the name and account number of
the patient, the equipment, medications, products or services currently supplied by the Seller
Entity to such patient on a sale or rental basis, and the primary payor.

          (c) Seller Entity acknowledges and agrees that Braden does not accept service responsibility
for any rental patients of the Seller Entity unless the patients, the rental equipment, and the
reimbursement status are accurately scheduled on 4.11(a).

          (d) For each Medicare patient (and any other patient insured pursuant to a capped rental
program for oxygen services) on Schedules 4.11(a) and 4.11(b), the schedule lists the
correct date on which the patient began service and the total number of months that the patient has
been on service since January 1, 2006 with any supplier, including suppliers other than the Seller
Entity, and the number of months remaining before the patient’s insurance benefits for oxygen are
capped.

          (e) All billings by the Seller Entity in respect of the patients identified on Schedules
4.11(a) and 4.11(b): (i) arose from valid, medically necessary sales or rentals in the ordinary
course of business; (ii) relate to equipment or products provided to patients covered under the
Medicare, Medicaid, private insurance program, or private pay, and each such patient is qualified
under such programs to receive such products or services; and (iii) were prepared and submitted by
the Seller Entity with all materially complete and correct prescriptions, certificates of medical
necessity, forms, supporting medical documents, test results and other information necessary to
receive payment with respect to each such billing in conformity with all applicable legal
requirements.

          (f) Except as set forth on Schedule 4.11(f), as of the Closing Date, no patient
identified on Schedule 4.11(a) has been qualified to receive oxygen from the Seller Entity
by any Affiliate (as defined in Section 11.11) of the Seller Entity, or to the Knowledge of the
Sellers, any other Affiliate of the Shareholders. Except as set forth on Schedule 4.11(f),
all patients listed on Schedule 4.11(a) have been qualified by Persons who do not have a
financial relationship (including but not limited to compensation or ownership relationship) with
the Seller Entity or any Seller and who are appropriately licensed or certified to qualify patients
under the applicable payor’s requirements.

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     4.12. Permits; Governmental Agreements

     Schedule 4.12 sets forth a complete and accurate list of licenses held by the Seller
Entity. All licenses are valid and in full force and effect and enforceable. Except as set forth
on Schedule 4.12, no such license requires the consent of, or a filing with, the permitting
or licensing authority with respect to the transactions contemplated by this Agreement.

     4.13. Environmental Matters

          (a) To the Knowledge of Sellers, (i) the Seller Entity has obtained all permits, licenses and
other authorizations (collectively, the “Environmental Approvals”) which are required to be
maintained by it in its ownership of the Purchased Assets under all federal, state, and applicable
local laws, regulations, rules and ordinances relating to pollution or protection of the
environment and health and safety, and all provisions contained in any regulation, code, order,
decree, judgment, injunction, legally enforceable notice or demand letter issued, entered,
promulgated or approved under such laws, regulations, rules and ordinances (collectively, the
“Environmental Laws”); (ii) all Environmental Approvals obtained by the Seller Entity (if any) are
in effect; (iii) no appeal nor any other action is pending to revoke any such Environmental
Approvals (if any); and (iv) the Seller Entity is in material compliance with all terms and
conditions of all of such Environmental Approvals (if any) and has not received a notice from any
authority that it is not in such compliance. To the Knowledge of Sellers, the Seller Entity is and
has been in compliance in all material respects with all Environmental Laws.

          (b) Sellers are not in possession of any environmental studies or reports relating to the
Seller Entity.

          (c) The Seller Entity has not received any notice from any former or existing employee that
such former or existing employee has been exposed through such employee’s employment by the Seller
Entity to any hazardous substance above levels approved by governmental authority or applicable
law.

          (d) To the Knowledge of Sellers, neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will require any notice, environmental audit
or other action of the Seller Entity or of any of the other parties hereto pursuant to any
Environmental Law or regulation applicable to the Seller Entity or any of their facilities.

     4.14. Health Care Compliance

     Except as set forth at Schedule 4.14, there are no claims, statements and other matters
(including, but not limited to, all correspondence or communications with governmental agencies,
intermediaries or carriers) concerning or relating to any federal or state government funded health
care program that involves, relates to, or alleges: (i) any violation with respect to any activity,
practice or policy of the Seller Entity; or (ii) any violation with respect to any claim for
payment or reimbursement made by the Seller Entity, or any payment or reimbursement paid to the
Seller Entity. The Seller Entity is not currently subject to any outstanding audit by any such
government agency, intermediary or carrier.

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     The Seller Entity is not engaged in termination proceedings as to its participation in the
Medicare program, any state Medicaid program, or any other Federal Health Care Program, nor has the
Seller Entity received any notice (written, verbal, electronic, or otherwise) that its current
participation in any such programs is subject to any contest, termination or suspension as a result
of alleged violations or non-compliance with participation requirements. There is no pending or
threatened proceeding or investigation involving participation by the Seller Entity, in the
Medicare program, any state Medicaid program, or any other Federal Health Care Program. Except for
non-material, routine overpayments that have been promptly reconciled, the Seller Entity has not
received reimbursement in excess of the actual amounts provided by law or contract. The Seller
Entity has provided services and is in compliance with 42 C.F.R 424.57 (known as the “Medicare
Supplier Standards”). The Seller Entity has always been and is currently in compliance in all
material respects with applicable rules and regulations in effect governing reimbursement under in
the Medicare program, state Medicaid programs, and all other Federal Health Care Programs.

     4.15. Compliance with Applicable Law; Adverse Restriction

          (a) General. The Seller Entity has not materially violated, and the Seller Entity is
in material compliance with, all applicable statutes, laws, rulings, ordinances, rules,
requirements, decrees, orders or regulations of any foreign, federal, state or local government and
any other governmental department or agency, and any judgment, decision, decree or order of any
court or governmental agency, department or authority affecting the Purchased Assets (“Laws”). The
Seller Entity has not received any notice to the effect that, or otherwise been advised that, any
Seller is not in compliance with any such statutes, regulations, rules, judgments decrees, orders,
ordinances or other Laws.

          (b) Billing. With respect to the Purchased Assets, the Seller Entity has fully
complied with all Medicare program Laws (and all comparable state Laws), including, without
limitation, the Centers for Medicare and Medicaid Services, pertinent Durable Medical Equipment
Medicare Administrative Carriers, or other applicable directives relating to the manner in which
paperwork must be obtained and maintained, including but not limited to prohibiting home health
care providers from completing certificates of medical necessity (“CMNs”) on behalf of physicians
or non-physician clinicians. All CMNs for the Seller Entity’s patients included in the Purchased
Assets contain the date and original signature of the patient’s treating physician or a
non-physician clinician involved in the care of the patient who is authorized to sign CMNs under
the applicable Medicare program Laws. No employee, contingent worker or agent of the Seller Entity
has amended, annotated, or altered a CMN included in the Purchased Assets in any way after that CMN
has been executed by an ordering physician or clinician. The Seller Entity has submitted claims
related to the Purchased Assets to third party payors, including Medicare, Medicaid, and other
government and private health care plans in accordance with all applicable Laws and regulations.
All documents signed by patients signifying receipt of equipment are properly signed and dated by
the patient or by an authorized representative. The Seller Entity has not submitted any claims for
payment to Medicare, Medicaid, or any third party payor with a date of service on or after the
Closing Date. Dates of service provided by Seller Entity to Braden for use in billing each of the
Qualified Files and Purchased Assets are accurate.

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          (c) Self-Referral Laws. The Seller Entity has not submitted any claim in connection
with any referrals which violated any applicable self-referral Law, including the Federal Ethics in
Patient Referrals Act, 42 U.S.C. § 1395nn (known as the “Stark Statute”), or any applicable state
self-referral law.

          (d) False Claim Act. The Seller Entity has not submitted any claim for payment to any
payor source, either governmental or nongovernmental, that would subject the Seller Entity to any
liability under any false claim or fraud Laws, including, without limitation, 31 U.S.C. § 3729-33
(known as the “Federal False Claim Act”), or any other applicable federal or state false claim or
fraud law.

          (e) Gratuitous Payments. Neither the Seller Entity nor any authorized agent acting on
behalf of or for the benefit of the Seller Entity, has directly or indirectly (i) offered or paid
any remuneration, in cash or in kind, to, or made any financial arrangements with, any past or
present patients, past or present suppliers, contractors or third party payors of the Seller Entity
in order to obtain business or payments from such Persons, other than entertainment activities in
the ordinary and lawful course of business, (ii) given or agreed to give, or is aware that there
has been made or that there is any agreement to make, any gift or gratuitous payment of any kind,
nature or description (whether in money, property or services) to any customer or potential
customer, supplier or potential supplier, contractors, third party payor or any other Person other
than in connection with promotional or entertainment expenses in the ordinary and lawful course of
business, (iii) made or agreed to make, or is aware that there has been made or that there is any
agreement to make, any contribution, payment or gift of funds or property to, or for the private
use of, any governmental official, employee or agent where either the contribution, payment or gift
is or was illegal under any Laws under which such payment, contribution or gift was made, (iv)
established or maintained any unrecorded fund or asset for any purpose or made any false or
artificial entries on any of its books or records for any reason, (v) made, or agreed to make, or
is aware that there has been made or that there is any agreement to make, any payment to any Person
with the intention or understanding that any part of such payment would be used for any purpose
other than that described in the documents supporting such payment, or (vi) paid or offered to pay
any illegal remuneration for any referral in violation of any applicable anti-kickback Laws,
including 42 U.S.C. § 1320a-7b(b) (known as “Federal Health Care Programs Anti-Kickback Statute”)
or any applicable state anti-kickback law.

     4.16. Litigation

     Except as set forth in Schedule 4.16, there are no claims, actions, suits, proceedings, or to
the Knowledge of Sellers, any audits or investigations pending or threatened nor any unsatisfied
judgments or outstanding orders, injunctions, decrees, stipulations or awards (whether rendered by
a court or administrative agency or by arbitration) against the Shareholders, against the Seller
Entity (or any shareholder, officer, director or employee of the Seller Entity) and relating to the
Purchased Assets, against the Purchased Assets at law, in equity or otherwise, in, before, or by,
any Governmental Authority, intermediary or carrier including, without limitation: (i) concerning
or relating to any federal or state government funded health care program that involves, refers or
relates to, or alleges that such agencies, intermediaries or carriers suspect any irregularities in
any activity, practice or policy of the Seller Entity, any claim for payment or reimbursement made
by the Seller Entity, or any payment or reimbursement paid to the Seller Entity or (ii)

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seeking to restrain, enjoin, rescind, prevent or change the transactions contemplated hereby or
questioning the validity or legality of any such transactions of this Agreement or seeking damages
in connection with any of such transactions.

     4.17. Finder’s Fee

     Except as set forth on Schedule 4.17, no Seller has incurred or become liable for any broker’s
commission or finder’s fee relating to or in connection with the transactions contemplated by this
Agreement, and the Sellers have not otherwise dealt with any brokers or finders in connection
herewith.

     4.18. Solvency

     No insolvency proceedings of any character, including without limitation, bankruptcy,
receivership, reorganization, composition, or arrangement with creditors, voluntary or involuntary,
affecting the Seller Entity or any of the Purchased Assets are pending, or, to the Knowledge of
Sellers, threatened; nor has the Seller Entity made any assignment for the benefit of creditors, or
taken any action in contemplation thereof, or taken any action that would constitute the basis for
the institution of any such insolvency proceedings.

     4.19. No Material Adverse Change

     Since due diligence and to the Seller’s Knowledge there has been no event, change or
occurrence which change or occurrence has caused a material adverse effect on the Business taken as
a whole..

ARTICLE V — REPRESENTATIONS AND WARRANTIES OF BRADEN

     In order to induce Sellers to enter into this Agreement, Braden makes the following
representations and warranties to Sellers, which are true and complete as written on the Closing
Date:

     5.1. Organization; and Qualification

Braden is a limited partnership duly organized, validly existing and in good standing under the
laws of the State of California.

     5.2. Authority Relative to this Agreement

Braden has all requisite power and authority to enter into this Agreement, and any agreement or
document contemplated hereby, and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement, and any agreement or document contemplated hereby, and
the consummation of the transactions contemplated hereby have been duly authorized by all necessary
action on the part of Braden and no other action on the part of Braden or its partners is required
in connection herewith. This Agreement, and all agreements or documents contemplated hereby, have
been duly executed and delivered by Braden and the obligations

17

 

imposed on Braden by this Agreement, or by any agreement or document contemplated hereby,
constitute the valid and binding obligations and agreements of Braden, enforceable against Braden
in accordance with its terms except: (i) that such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to
creditors rights; and (ii) that the remedy of specific performance, and injunctive and other forms
of equitable relief, may be subject to equitable defenses and to the discretion of the court before
which any proceeding therefore may be brought.

     5.3. Compliance of Transaction With Laws and Other Instruments

     The execution, delivery and performance by Braden of this Agreement, and the other agreements
and documents contemplated hereby and the performance and consummation of the transactions
contemplated hereby by Braden:

          (a) do not require on behalf of Braden any approval, consent, order or authorization of or
registration, declaration or filing with, any Governmental Authority which has not been obtained
and which is not in full force and effect as of the date hereof;

          (b) does not and will not conflict with, or result in a breach or violation of any provision
of the applicable governing documents of Braden;

          (c) does not and will not require Braden to obtain any approval, consent or waiver of, or make
any filing with, any Person (governmental or otherwise) that has not been obtained or made.

     5.4. Finder’s Fee

     Braden has not incurred or become liable for any broker’s commission or finder’s fee relating
to or in connection with the transactions contemplated by this Agreement, and Braden has not
otherwise dealt with any brokers or finders in connection herewith.

ARTICLE VI — CERTAIN UNDERSTANDINGS AND AGREEMENTS

     6.1. Expenses

     Braden and the Sellers shall each pay their respective costs incurred in connection with the
preparation, negotiation, execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby including, without limitation, the fees of their respective
attorneys, accountants, and investment bankers.

     6.2. Confidentiality

     Sellers and Braden shall maintain as confidential this Agreement and the terms of this
Agreement, as well as all records, correspondence, memoranda, writings, documents and instruments
arising out of, or relating thereto or made in connection therewith (hereinafter collectively
referred to as “Confidential Information”). The Confidential Information will not be disclosed to
any third party except representatives who need access to the information in order to complete the
transactions contemplated hereby. In addition, Sellers and Braden agree not to

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disclose any Confidential Information to any person or entity except (i) as required by Laws or the
applicable rules of any securities exchange, (ii) in compliance with any court or administrative
order only after reasonable attempts to obtain confidential treatment for such information or (iii)
to such party’s attorneys, accountants or similar advisors under obligation to maintain the
confidentiality of such information. Pursuant to the preceding sentence in this Section 6.2, Braden
agree to hold in confidence such Confidential Information before Closing. Further, except for the
initial press release which shall be coordinated between Sellers and Braden, or as required by Laws
or court order, all notices to third parties and all other publicity concerning this Agreement and
the transactions contemplated hereby, including all press releases and similar public announcements
and communications, shall be coordinated and planned by Braden after the Closing subject to the
prior written approval of Sellers, and after the Closing Sellers shall not take any such action or
disclose the Confidential Information except as set forth in the first paragraph of this Section
6.2 or without the prior written approval of Braden.

     6.3. Further Assurances

     At and after the Closing, and without any further consideration, each of the parties hereto
will, as soon as practicable after the request of the other parties hereto, execute and deliver to
the requesting party all such further assignments, assurances and other documents and provide such
information as such party may reasonably request in order to effect the transfer of the Purchased
Assets, and the Assumed Liabilities to Braden or in order for Braden properly to perform its
billing and collection functions or to prepare its tax returns or other documents or reports
required to be filed with governmental authorities or its financial statements. Each party further
agrees that, after the Closing, it shall provide reasonable cooperation and assistance to the other
party with respect to any matters, disputes, suits or claims by or against any Person not a party
to this Agreement; provided, however, that in connection with the cooperation and
assistance furnished by a party under this sentence, the party receiving such cooperation and
assistance shall reimburse the other party for any reasonable out-of-pocket expenses incurred in
connection therewith.

     6.4. Bulk Sales

     The Seller Entity shall be solely responsible for complying with the applicable bulk sales
laws of any jurisdiction in which the Seller Entity conducts business, and any bulk sales taxes due
as a result of the transaction shall be the sole responsibility of Sellers. Notwithstanding the
foregoing, Sellers shall not be required to open a Bulk Sales Escrow, but the failure to do so
shall not adversely affect Braden Indemnified Parties’ rights to require indemnification under
paragraph 9.2(a)(iv).

     6.5. Tax Returns

     The Sellers shall: (i) be responsible for and pay when due all of the Sellers’ Taxes
attributable to or levied or imposed upon the Purchased Assets relating or pertaining to the period
(or that portion of any period) ending on or prior to the Closing Date and (ii) all Taxes
attributable to, levied or imposed upon, or incurred in connection with the conduct of the Business
prior to the Closing Date. The Sellers shall continue to timely file within the time period for
filing, or any extension granted with respect thereto, all of the Sellers’ Tax Returns

19

 

required to be filed in connection with the Purchased Assets or the conduct of the Business prior
to the Closing Date and any portion of any such Tax Returns connected therewith shall be true and
correct and completed in accordance with applicable laws.

     6.6. Reimbursement of Funds

     From time to time after the Closing, Braden or the Sellers may receive funds that rightfully
belong to the other party. Each party hereto agrees to promptly deliver to the proper party all
such funds received in error.

     6.7. Referrals

     The parties acknowledge that there is no understanding, agreement, or commitment between
Braden and Sellers under which the Seller Entity or the Shareholders, or any Affiliate of either of
them, is required or expected to refer, recommend or arrange for patients to receive services or
items from Braden.

     6.8. Rehired Employees

          (a) Braden may extend offers of employment to certain employees of the Seller Entity (such
Employees are hereinafter referred to as the “Rehired Employees”), which offers shall be on terms
and conditions that Braden shall determine in its sole discretion. The Seller Entity shall
terminate the employment of the Rehired Employees on the Closing Date and shall cooperate with and
use its commercially reasonable efforts to assist Braden in its efforts to secure satisfactory
employment with those employees of the Seller Entity to whom Braden shall make offers of
employment.

          (b) The Seller Entity hereby irrevocably and unconditionally agrees not to sue, and releases,
absolves and discharges, each Rehired Employee from and against any non-competition,
non-solicitation, confidentiality, or non-disclosure agreement related to such Rehired Employees’
employment by the Seller Entity. Upon the request of Braden, the Seller Entity shall provide each
Rehired Employee with written documentation evidencing such release.

          (c) Nothing contained in this Agreement shall confer upon any Rehired Employee any right with
respect to continuance of employment by Braden, nor shall anything herein interfere with the right
of Braden to terminate the employment of any Rehired Employee at any time, with or without cause,
or restrict Braden in the exercise of its independent business judgment in modifying any of the
terms and conditions of the employment of the Rehired Employees. The Seller Entity shall be solely
responsible for any and all wages, vacations, holidays, union check-off dues, bereavement pay, jury
duty pay, disability income, supplemental unemployment benefits, personal or sick leave pay,
payroll expenses whether due or accumulated but unpaid, owing to its employees and independent
contractors in respect of any periods prior to the Closing Date.

          (d) Notwithstanding any other provision in this Section, if Mary Reynolds or Mariam Weber
become employed by a competitor of Braden’s in the Business in the states of Illinois, Indiana, or
the Commonwealth of Kentucky before the Deferred Disbursement Date without having first been
terminated without cause by Braden, then Braden shall be entitled to

20

 

withhold $60,000 for each such instance from the payment due to the Seller Entities on the
Deferred Distribution Date. This reduction shall only apply if the employee has been offered
employment that does not require she agree to a covenant not to compete before the Deferred
Disbursement Date. If Mary Reynolds does not accept employment with Braden, and Braden
subsequently employs her as a consultant in addition to one or more full-time sales
representatives, then Braden shall be entitled to withhold $40,000 from the payment due to the
Sellers on the Deferred Distribution Date.

     6.9. Patient Relationships

     After the Closing, Braden shall use its commercially reasonable efforts to continue and
maintain those patient relationships of the Seller Entities existing prior to Closing which pertain
to the Purchased Assets. Braden shall use its commercially reasonable efforts to ensure that (i)
all Oxygen Qualified Files and Sleep Qualified Files remain Qualified Files through and including
the Deferred Disbursement Date; and (ii) to the extent Braden determines that any patient file
lacks paperwork or documentation necessary to make it an Oxygen Qualified or Sleep Qualified File,
Braden will make commercially reasonable efforts to cure such deficiencies until Braden gives
notice of an adjustment to Purchase Price pursuant to Section 3.2(f).

ARTICLE VII — CONDITIONS TO CLOSING

     7.1. Conditions to Braden’s Obligations to Close

     Braden’s obligation to consummate this Agreement and the transactions contemplated hereby is
subject to fulfillment, or express written waiver by Braden, prior to or at the Closing, of the
following conditions precedent:

          (a) Representations and Warranties. The representations and warranties made by the
Sellers in this Agreement shall be true and correct in all material respects as of and at the
Closing Date. The Sellers shall also have performed and complied with all of their respective
covenants and obligations under this Agreement which are to be performed or complied with by them
prior to or on the Closing Date.

          (b) Seller Consents. All consents listed, or required to be listed, on Schedule
4.4 shall have been obtained by Sellers and evidence thereof delivered to Braden. 

          (c) Closing Deliveries. The Sellers shall have delivered to Braden the closing
deliveries listed in Section 8.2 hereof.

     7.2. Conditions to the Sellers’ Obligations to Close

     The Sellers’ obligation to consummate this Agreement and the transactions contemplated hereby
is subject to fulfillment, or express written waiver by the Seller Entity, prior to or at the
Closing, of the following conditions precedent:

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          (a) Representations and Warranties. The representations and warranties made by Braden
in this Agreement shall be true and correct in all material respects as of and at the Closing Date
with the same force and effect as though said representations and warranties had been again made on
the Closing Date. Braden shall also have performed and complied with all of its covenants and
obligations under this Agreement which are to be performed or complied with by it prior to or on
the Closing Date.

          (b) Braden Consents. The execution, delivery and performance and consummation of the
transactions contemplated hereby do not require on behalf of Braden any approval or consent by its
General Partner or Limited Partnership interests that has not been obtained.

          (c) Closing Deliveries. Braden shall have delivered to Sellers the closing deliveries
listed in Section 8.1 hereof.

ARTICLE VIII — CLOSING DELIVERIES

     The closing of the transactions contemplated hereby (the “Closing”) shall take place on May
18, 2009, or such other date mutually agreed upon among the parties (the “Closing Date”).

     8.1. Braden

     On or before the Closing Date, the Braden shall deliver to Sellers the Seller Entity:

          (a) the Closing Payment.

          (b) A certificate from Braden, in form and substance satisfactory to Sellers, certifying (i)
that attached thereto is a complete and correct copy of resolutions of the partnership authorizing
Braden’s execution and delivery of this Agreement, and that such resolutions have not been amended
or modified in any respect and remain in full force and effect as of the date thereof, (ii) that
the Persons named therein are all of the duly elected, qualified and acting officers of Braden and
that set forth therein is a genuine signature or true facsimile thereof of each such officer, and
(iii) that attached thereto is a complete and correct certificate, dated not more than thirty (30)
days prior to the Closing Date, of the Secretary of State of the State of the jurisdiction in which
Braden is registered, confirming the legal existence and good standing of Braden.

          (c) A certificate signed by an authorized officer of Braden to the effect that the statements
contained in Section 7.2(a) are true and correct.

     8.2. Seller Entity

     On or before the Closing Date, the Seller Entity shall deliver to Braden:

          (a) A certificate from the Seller Entity, in form and substance satisfactory to Braden, of the
Secretary or Assistant Secretary of the Seller Entity, certifying that (i) attached thereto are
complete and correct copies of the Articles of Incorporation and Bylaws, or applicable governing
documents, of the Seller Entity, both as amended to date, (ii) that attached

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thereto is a complete and correct copy of resolutions adopted by the Board of Directors of the
Seller Entity, and if necessary, the shareholders of the Seller Entity, authorizing the Seller
Entity’s execution and delivery of this Agreement, and that such resolutions have not been amended
or modified in any respect and remain in full force and effect as of the date thereof, (iii) that
the Persons named therein are all of the duly elected, qualified and acting directors and officers
of the Seller Entity and that set forth therein is a genuine signature or true facsimile thereof of
each such director and officer, (iv) that attached thereto is a complete and correct certificate,
dated not more than thirty (30) days prior to the Closing Date, of the Secretary of State of the
State of the jurisdiction in which the Seller Entity is incorporated, confirming the legal
existence and good standing of the Seller Entity, and (v) attached thereto are complete and correct
certificates, dated not more than thirty (30) days prior to the Closing Date, of the Secretaries of
State in each jurisdiction in which the Seller Entity conducts business, confirming the Seller
Entity’s good standing and authority to do business in each such jurisdiction.

          (b) A certificate signed by an authorized officer of the Seller Entity and by the Shareholders
to the effect that the statements contained in Section 7.1(a) are true and correct.

          (c) Original copies of all business records representing the patient files included in the
Purchased Assets.

          (d) Seller Entity and Sellers’ non-competes in substantially the form of Exhibit A attached
hereto.

          (e) A Bill of Sale in substantially the form of Exhibit B attached hereto.

          (f) All required landlord consents to the assignment of the real property leases for Peoria,
IL and Jackson, KY.

          (g) All required landlord consents to the subletting of the real property leases for Crystal
Lake, IL and Jacksonville, IL.

          (h) Sublease Agreements for Crystal Lake, IL and for Jacksonville, IL in substantially the
form of Exhibit C attached hereto.

          (i) Documents evidencing title to and warranties for the Purchased Assets (and any and all
keys, cards, codes, devices, or things necessary to access any of the Purchased Assets), which
shall be surrendered upon request to Braden’s representatives.

          (j) Uniform Commercial Code termination statements, lease termination statements, releases and
any other documents necessary to evidence that all of the Purchased Assets are being sold,
conveyed, transferred, assigned and delivered to Braden free and clear of all Liens or, in the
alternative and in the sole discretion of Braden, applicable payoff letters, together with payment
instructions, such that Braden may pay a portion of the Purchase Price directly to the holder of
any such Liens.

          (k) Such other instruments or documents of sale, assignment or conveyance of the Purchased
Assets to consummate the transactions contemplated by this Agreement as are reasonably requested by
Braden.

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     8.3. Joint Deliveries

     At the Closing, Braden, the Seller Entity and the Shareholders shall execute and deliver the
Non-Compete Agreement in the form attached hereto as Exhibit A.

ARTICLE IX — SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

     9.1. Representations, etc.

     It is the express intention and agreement of the parties to this Agreement that all
representations, and warranties made by Braden and the Seller Entity and Shareholders in this
Agreement or in any document or instrument delivered by Braden or the Seller Entity and
Shareholders pursuant to the provisions of this Agreement at or in connection with the Closing,
shall survive the Closing for a period of one (1) year and that all agreements and covenants of the
parties shall survive until fully performed except that:

          (a) All representations, covenants and agreements of the Seller Entity and Shareholders in
Section 4.6 or otherwise relating to Tax obligations of the Seller Entity with respect to any
period (or that portion of any period) ending on or prior to the Closing Date (“Tax Matters”) shall
survive the Closing until the expiration of all applicable statutes of limitations plus any
extensions or waivers granted or imposed with respect thereto;

          (b) All representations, covenants and agreements of the Seller Entity and Shareholders in
Section 4.15 and 4.16 or otherwise relating to compliance with the law with respect to any period
(or that portion of any period) ending on or prior or the Closing Date shall survive the Closing
for a period of three (3) years from the Closing Date.

          (c) The covenants and agreements of the Sellers set forth in the certain Non-Compete Agreement
shall survive the Closing for a period of five (5) years from the Closing Date as more fully set
forth therein.

     The right of either party to recover Damages (as defined in Section 9.2) on any claim shall
not be affected by the termination of any representations or warranties as set forth above,
provided that (i) notice of any Damages (including the amount of any such Damages) as a result of
such claim has been given by the indemnified party to the indemnifying party prior to such
termination, and (ii) the right of one party to recover any Damages that are caused by fraud or
intentional misrepresentation until claims are barred by the applicable provisions of Law.

     9.2. Indemnification

          (a) By Sellers. From and after the Closing, and subject to the provisions of Section 3.2(g),
the Seller Entity and the Shareholders shall jointly and severally indemnify and hold Braden, its
affiliates, members, partners, shareholders, officers, directors, employees, agents, and
representatives (collectively, the “Braden Indemnified Parties”) harmless, from and against any
liability, loss, expense, claim, lien or other damage including, without limitation, attorney’s
fees and expenses (all of the foregoing items for purposes of this Agreement are referred to as
“Damages”), resulting from, arising out of or incurred with respect to:

24

 

          (i) any breach of any representation, warranty, covenant or agreement by the Sellers
contained herein, including the Non-Compete Agreement or in any certificate, Schedule or
Exhibit delivered pursuant hereto;

          (ii) any and all liabilities of the Sellers (other than the Assumed Liabilities)
arising out of the Seller Entity’s or Shareholders’ conduct prior to the Closing;

          (iii) any failure of the Sellers to comply in all respects with the “bulk sales” or
“bulk transfer” laws of any jurisdiction in connection with the transactions contemplated
hereby; and

          (iv) any liability of Seller for Taxes, including without limitation, Taxes of any
Person pursuant to Treasury Regulations Section 1.1502-6 (or any similar provision of state,
local, or foreign law), as a transferee or successor, by contact or otherwise.

The foregoing shall not be interpreted to require Sellers to indemnify the Braden Indemnified
Parties, from and against any Damages resulting from, arising out of, or incurred with respect to
Sellers’ conduct occurring as a result of Braden’s breach of this Agreement.

          (b) By Braden. From and after the Closing, Braden shall indemnify and hold the Seller Entity
and Shareholders and their respective affiliates, shareholders, directors, officers, employees,
agents, and representatives (collectively, the “Seller Indemnified Parties”) harmless, from and
against any Damages resulting from, arising out of or incurred with respect to:

          (i) Any breach of any representation, warranty, covenant or agreement by Braden
contained herein or in any certificate, Schedule or Exhibit delivered pursuant hereto;

          (ii) any and all liabilities of Braden arising out of Braden’s conduct prior to the
Closing; and

          (iii) the assertion against Sellers, the Purchased Assets or the Business of any
Damages created by or attributable to any and all liabilities of Braden arising out of
Braden’s conduct or the operation of the Business or ownership of the Purchased Assets
subsequent to Closing.

The foregoing shall not be interpreted to require Braden to indemnify the Seller Indemnified
Parties from and against any Damages resulting from, arising our of, or incurred with respect to
Braden’s conduct occurring as a result of the Seller Entity’s or the Shareholders’ breach of this
Agreement.

25

 

     9.3. Payment of Claims for Damages; Right of Setoff by Braden

	 	(a)	 	Payment of claims for Damages shall be paid to the claimant in cash in the
amount to which the claimant may become entitled by reason of the provisions of this
Article IX within fifteen (15) days after such amount is finally determined by either
mutual agreement of the parties or pursuant to the dispute resolution process set forth
in Article X; provided, however, Braden acknowledges and agrees that no payment to any
Braden Indemnified Parties for any claims for indemnification under Section 9.2(a)(i)
shall be made prior to the date on which the Purchase Price has been finally determined
in accordance with the provisions of Section 3.2 and 3.3, it being acknowledged that
the aggregate liability for such claims are subject to the provisions of Section 9.5
and cannot be measured until the Purchase Price is finally determined. Except as
provided in Section 3.1(e), and in addition to any and all other rights and remedies
that may be available to it at law or in equity, Braden shall have the right to apply
any or all of the amount of any and all claims it may have against the Seller Entity
and/or the Shareholders (including, but not limited to, any and all claims arising
under Article X and/or Section 9.2 of this Agreement) against any payments it may owe
to the Seller Entity and/or the Shareholders pursuant to Article III of this Agreement.

     9.4. Limitations on Indemnification

     Notwithstanding anything herein to the contrary, the aggregate liability of all Sellers for
indemnification claims under Section 9.2(a)(i) shall not exceed the Purchase Price paid by Braden
(as adjusted pursuant to Section 3.2); provided, however, that the limitations of indemnification
in this sentence shall not apply and shall not relieve Sellers of any liability in the case of
fraud or intentional misrepresentation, by any Seller under this Agreement or in any certificate,
Schedule or Exhibit delivered pursuant hereto.

     9.5. Notice; Defense of Claims

     An indemnified party may make claims for indemnification hereunder by giving written notice
thereof to the indemnifying party within the period in which indemnification claims can be made
hereunder. If indemnification is sought for a claim or liability asserted by a third party, the
indemnified party shall also give written notice thereof to the indemnifying party promptly after
it receives notice of the claim or liability being asserted, but the failure to do so shall not
relieve the indemnifying party from any liability except to the extent that it is prejudiced by the
failure or delay in giving such notice. Such notice shall summarize the bases for the claim for
indemnification and any claim or liability being asserted by the third party. Within 20 days after
receiving such notice the indemnifying party shall give written notice to the indemnified party
stating whether it disputes the claim for indemnification and whether it will defend against any
third party claim or liability at its own cost and expense. If the indemnifying party fails to
give notice that it disputes an indemnification claim within 20 days after receipt of notice
thereof, it shall be deemed to have accepted and agreed to the claim, which shall become
immediately due and payable. The indemnifying party shall be entitled to direct the defense
against a third party claim or liability with counsel selected by it (subject to the consent of the
indemnified party, which consent shall not be unreasonably withheld) as long as the indemnifying
party is conducting a good faith and diligent defense. The indemnified party shall at all times
have the

26

 

right to fully participate in the defense of a third party claim or liability at its own expense
directly or through counsel; provided, however, that if the named parties to the action or
proceeding include both the indemnifying party and the indemnified party and the indemnified party
is advised that representation of both parties by the same counsel would be inappropriate under
applicable standards of professional conduct, the indemnified party may engage separate counsel at
the expense of the indemnifying party. If no such notice of intent to dispute and defend a third
party claim or liability is given by the indemnifying party, or if such good faith and diligent
defense is not being or ceases to be conducted by the indemnifying party, the indemnified party
shall have the right, at the expense of the indemnifying party, to undertake the defense of such
claim or liability (with counsel selected by the indemnified party), and to compromise or settle
it, exercising reasonable business judgment. If the third party claim or liability is one that by
its nature cannot be defended solely by the indemnifying party, then the indemnified party shall
make available such information and assistance as the indemnifying party may reasonably request and
shall cooperate with the indemnifying party in such defense, at the expense of the indemnifying
party.

     9.6. Sole Remedy

     The right to indemnification under this Article IX, subject to all the terms, conditions and
limitations hereof, shall constitute the sole and exclusive right and remedy available to any party
hereto for any actual or threatened breach of this Agreement and for any violation of laws in
connection with the transactions provided for in this Agreement and none of the parties hereto
shall initiate or maintain any legal action at law or in equity against any other party hereto
which is directly or indirectly related to any breach or threatened breach of this Agreement or for
any violation of laws in connection with the transactions provided for in this Agreement.

ARTICLE X — ARBITRATION

     10.1. Arbitration Rules

     Any and all disputes, controversies or claims whether of law or fact and of any nature
whatsoever arising from or respecting this Agreement, including claims for indemnity between the
parties hereto, that are not resolved by the parties hereto other than any disputes, controversies
or claims related to the Non-Compete Agreement shall be decided by arbitration in accordance with
this Article X or otherwise by the Arbitration Rules then in effect of the American Arbitration
Association (the “Arbitration Rules”), or as otherwise agreed between the parties. Unless
otherwise agreed to in writing, the arbitration shall be held in Novato, California. Reasonable
written notice of the time and place of arbitration shall be given to all parties to such
arbitration and their legal counsel as shall be required by Law, in which case such Persons or
their authorized representatives shall have the right to attend and/or participate in all the
arbitration hearings in such manner as the law shall require. The arbitrator shall be selected in
accordance with the Arbitration Rules. The arbitrator shall use his or her best efforts to render
a decision on the matter submitted to him or her pursuant hereto within sixty (60) days following
such person’s appointment. The parties to the arbitration shall equally bear the fees and expenses
of the arbitrator and each party shall bear its own attorney fees.

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     10.2. Binding Effect of Arbitration

     The arbitrator shall be able to decree any and all relief of an equitable nature, including
but not limited to such relief as a temporary restraining order, a temporary and/or a permanent
injunction, and shall also be able to award damages. The final decision of the arbitrator shall
constitute a conclusive determination of the matter in question, shall be binding upon the parties
hereto and shall not be contested by any of them. The decree or judgment of an award rendered by
the arbitrator may be entered in any court having jurisdiction thereof.

ARTICLE XI — MISCELLANEOUS PROVISIONS

     11.1. Entire Agreement: Amendment

     This Agreement (including the Exhibits hereto), contains the entire agreement among the
parties hereto and supersedes all prior oral or written agreements, promises, representations,
commitments or understandings with respect to the matters provided for therein. This Agreement may
be modified or amended only by a writing duly executed by Braden, the Seller Entity, and the
Shareholders, which modification or amendment shall be binding upon all of the parties hereto.

     11.2. Assignment and Binding Effect

     This Agreement and the rights and obligations of any party hereunder may not be assigned by
any party without the prior written consent of the other parties hereto. All covenants,
agreements, statements, representations and indemnities in this Agreement by and on behalf of any
of the parties hereto shall bind and inure to the benefit of their respective heirs, successors and
permitted assigns of the parties hereto.

     11.3. Waivers

     No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a
continuing waiver, and no waiver shall be binding unless executed in writing by the party making
the waiver.

     11.4. Notices

     All notices, demands or other communications which may be or are required to be given by any
party to any other party pursuant to this Agreement, shall be in writing and shall be mailed by
certified mail, return receipt requested, postage prepaid, or transmitted by hand delivery,
national overnight express, telegram or facsimile transmission (with a copy sent via certified mail
within two business days), addressed as follows:

	 	 	 
	If to Braden:

	 	with a copy (which shall not constitute notice) to:
	 
	 	 
	Braden Partners, L.P.

	 	Carolyn J. McElroy, Esquire
	88 Rowland Way, Suite 300

	 	88 Rowland Way, Suite 300
	Novato, California 94945

	 	Novato, California 94945
	 
	 	 
	Attn: Mr. Peter B. Kelly

	 	Phone No: (301) 765-1911
	 

	 	Fax No: (240) 644-6226

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	Phone No: (415) 893-1518
	 	 
	Fax No: (415) 893-1527
	 	 
	 
	 	 
	If to the Seller Entity or Shareholders:
	 	 
	 
	 	 
	Arcadia Resources, Inc.

	 	Arcadia Resources, Inc.
	9229 Delegates Row, Ste. 260

	 	9229 Delegates Row, Ste. 260
	Indianapolis, IN 46240

	 	Indianapolis, IN 46240
	Attn: Marvin R. Richardson, President

	 	Attn: General Counsel
	 
	 	 
	Phone No: (317) 569-8234

	 	Phone No: (317) 569-8234
	Fax No: (317) 575-6195

	 	Fax No: (317) 575-6195

until such time as either party notifies the other of a change of address. Each notice or other
communication which shall be mailed, delivered or transmitted in the manner described above shall
be deemed sufficiently given and received for all purposes at such time as it is delivered to the
addressee (with the return receipt, the delivery receipt, or the affidavit of messenger or telecopy
transmission log being deemed conclusive evidence of such delivery) or at such time as delivery is
refused by the addressee upon presentation.

     11.5. Governing Law

     This Agreement shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to the conflict of laws provisions thereof.

     11.6. No Third Party Beneficiaries

     This Agreement is intended for the sole and exclusive benefit of the parties hereto, and no
third party or Person is intended as a third party beneficiary of this Agreement or any part hereof
in any respect (including, but not limited to, any employee or contingent worker of the Seller
Entity or any former Seller Entity employee or contingent worker), and no third party or Person
shall obtain any rights, claims, benefits or privileges under or by virtue of this Agreement
whatsoever.

     11.7. Counterparts; Execution

     To facilitate execution, this Agreement may be executed in as many counterparts as may be
required, and each such counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute but a single agreement. This Agreement shall be deemed
to have been executed at the time when and location at which the last signature of any of the
parties is affixed hereto or to any counterpart hereof.

     11.8. Effect of Headings

     The section headings herein are for convenience only and shall not affect the construction or
interpretation of this Agreement.

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     11.9. Severability

     The parties agree that if any provisions of this Agreement shall under any circumstances be
deemed invalid or inoperative, the Agreement shall be construed with the invalid or inoperative
provision deleted and the rights and obligations of the parties shall be construed and enforced
accordingly.

     11.10. Construction; Complete Agreement

     Regardless of whether the parties are or have been represented by counsel in connection with
the negotiation and drafting of this Agreement, no principle of resolving ambiguities against the
drafter shall apply in construing any of the terms hereof. This Agreement and exhibits hereto
contain the full and complete agreement of among the parties hereto with respect to the subject
matter hereof and supersedes any prior agreements or understandings between the parties.

     11.11. Certain Definitions

          (a) For purposes of this Agreement, the term “Affiliate” shall mean, with respect to any
Person (as hereinafter defined), any other Person controlling, controlled by, or under common
control with such Person. For purposes of the foregoing definition, a “Person” shall be deemed to
“control” another Person if that Person has the direct or indirect ability to direct or cause the
direction of the management and policies of the “controlled” Person, through ownership of equity
securities, by contract (including any management agreement), or otherwise, and shall be deemed to
exist with respect to any entity as to which the Person in control owns, directly or indirectly,
20% or more of the outstanding voting rights. With respect to a trust, “Affiliate” shall include
the trustee and any direct or indirect beneficiary of such trust.

          (b) For purposes of this Agreement, “Billing Cycle” shall mean the interval of time between
permissible period rental fees for durable medical equipment and services, commencing with the
first day of any interval in which a patient or insurer may be charged a periodic rental fee for
durable medical equipment and services.

          (c) For purposes of this Agreement, an individual will be deemed to have “Knowledge” of a
particular fact or other matter if: (i) such individual is actually aware of such fact or other
matter, or (ii) a prudent individual could be expected to discover or otherwise become aware of
such fact or other matter by the exercise of reasonable diligence with regard to the matter. A
Person (other than an individual) will be deemed to have Knowledge of a particular fact or other
matter if any individual who is serving as a director or officer of such Person (or in any similar
managerial or supervisory capacity) (i) is, or at any time was, actually aware of such fact or
other matter, or (ii) a prudent individual could be expected to discover or otherwise become aware
of such fact or other matter by the exercise of reasonable diligence with regard to the matter.

          (d) For purposes of this Agreement, a “Person” shall mean any individual, corporation, Limited
Liability Company, partnership, government, government entity, or any other entity whatsoever.

30

 

          (e) For purposes of this Agreement, “Taxes” and “Tax” shall mean all taxes and any tax,
including without limitation, all foreign, federal, state, county and local income, sales,
employment, profit, payroll, use, trade, capital, occupation, property, excise, value-added,
unitary, withholding, stamp, transfer, registration, recordation, license, taxes measured on or
imposed by net worth, and other taxes, levies, imposts, duties, governmental obligations,
deficiencies and assessments, together with all interest, penalties and additions imposed with
respect thereto and including any transferee or secondary liability for Taxes and any liability in
respect of Taxes as a result of being a member of any affiliated, consolidated, combined or unitary
group

          (f) For purposes of any payment or disbursement made under this Agreement, “day” and “days”
shall mean any day and days when banks in San Francisco are open for business.

     11.12. Schedules and Exhibits

     The schedules and exhibits referred to herein are attached hereto, made a part of, and
incorporated into this Agreement by this reference.

[Signature page follows]

31

 

     IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or caused this
Agreement to be executed on its behalf, as of the date first above written.

	 	 	 
	BRADEN PARTNERS, L.P.
	 	 
	 
	 	 
	/s/ Peter Kelly

	 	 
	 
	 	 
	By, its President: Peter B. Kelly
	 	 
	 
	 	 
	ARCADIA HOME OXYGEN AND
	 	 
	     MEDIAL EQUIPMENT, INC.
	 	 
	 
	/s/ Marvin R. Richardson
	 	 
	 
	 	 
	By, its President: Marvin R. Richardson
	 	 
	 
	 	 
	AMERICAN OXYGEN AND MEDICAL
	 	 
	    EQUIPMENT, INC.
	 	 
	 
	 	 
	/s/ Marvin R. Richardson
	 	 
	 
	 	 
	By, its President: Marvin R. Richardson
	 	 
	 
	 	 
	THE SHAREHOLDERS:
	 	 
	 
	 	 
	ARCADIA PRODUCTS, INC.
	 	 
	 
	 	 
	/s/ Marvin R. Richardson
	 	 
	 
	 	 
	By, its President: Marvin R. Richardson
	 	 
	 
	 	 
	RKDA, INC.
	 	 
	 
	 	 
	/s/ Marvin R. Richardson
	 	 
	 
	 	 
	By, its President: Marvin R. Richardson
	 	 
	 
	 	 
	ARCADIA RESOURCES, INC.
	 	 
	 
	 	 
	/s/ Marvin R. Richardson
	 	 
	 
	 	 
	By, its President & CEO: Marvin R. Richardson
	 	 

32EX-10.1

Exhibit 10.1

GIBRALTAR INDUSTRIES, INC.

2005 EQUITY INCENTIVE PLAN

 

Third Amendment And Restatement

 

     Effective as of May 19, 2005, Gibraltar Industries, Inc., a Delaware corporation with offices
at 3556 Lake Shore Road, Buffalo, New York (the “Company”), adopted an equity based incentive
compensation plan known as the Gibraltar Industries, Inc. 2005 Equity Incentive Plan (the “Plan”)
for the purpose of carrying into effect its objective to provide its employees and its non-employee
directors, consultants and other service providers with equity based incentives to increase their
motivation to improve the profitability of the Company.

     Effective as of December 18, 2006, the Company amended and restated the Plan to limit the form
of payment of certain Awards to an issuance of Shares and to make certain other technical changes.
Effective as of December 30, 2008, the Company amended and restated the Plan to conform the Plan to
the provisions of Section 409A of the Internal Revenue Code of 1986, as amended, and to make
certain other technical changes.

     The Company now desires to amend and restate the Plan, subject to the approval of the
stockholders of the Company: (1) to increase the number of shares which may be issued pursuant to
Awards made under the terms of the Plan by an amount equal to 750,000; (2) to provide that the
total number of shares of common stock of the Company which may be issued pursuant to awards made
under the terms of the Plan will not be reduced by restricted stock units or performance units
which are settled in cash rather than in shares of the Company’s common stock; (3) to permit
performance units to be settled in cash rather than in shares; (4) to eliminate (subject to the
3,000,000 overall limit on the maximum number of shares of common stock that may be issued pursuant
to awards made under the terms of the Plan) the limitation on the maximum number of restricted
stock units and restricted shares which may be issued under the terms of the Plan; (5) to eliminate
the limit of 200,000 on the aggregate number of shares of common stock which may be issued to any
individual participant over a five (5) year period in connection with awards of options,
performance shares, performance units and rights made under the Plan; and (6) to eliminate the
right of optionees to pay the exercise price of options awarded under the Plan by the execution and
delivery of a promissory note.

     In connection with the foregoing, subject to the approval of the stockholders of the Company,
the Company hereby adopts this document as the Third Amendment and Restatement of the Gibraltar
Industries, Inc. 2005 Equity Incentive Plan effective as of May 18, 2009.

ARTICLE 1.

DEFINITIONS

     The following words and phrases, when used in this Plan, shall have the following meanings,
unless a different meaning is plainly required by the context:

 

 

     1.01 Affiliate means any corporation under common control with the Company within the
meaning of Section 414(b) of the Internal Revenue Code and any trade or business (whether or not
incorporated) under common control with the Company within the meaning of Section 414(c) of the
Internal Revenue Code.

     1.02 Appreciation Period means the period of time between the Date of Grant of a Right
and the date that the Right is exercised.

     1.03 Award means any Option, Share, Right or Unit granted to any Person under the
Plan.

     1.04 Base Price means the dollar amount used to determine the amount of the increase,
if any, in the value of the Share used to determine the value of a Right, which amount shall not be
less than the Fair Market Value of the Share, determined as of the Date of Grant of the Right.

     1.05 Beneficiary means any person, firm, corporation, trust or other entity designated
by a Participant in accordance with Section 11.07 to receive any payment that is required to be
made under the Plan upon or after the Participant’s death.

     1.06 Board of Directors means the Board of Directors of the Company.

     1.07 CEO means the Chief Executive Officer of the Company.

     1.08 Change in Control means the occurrence of any of the following:

          (a) During any twelve-consecutive month period, any “person” or group of persons (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))
other than the Company, an Affiliate of the Company, an employee benefit plan sponsored by the
Company or any one or more members of the Lipke family becomes the “beneficial owner” (as defined
in section 13(d) of the Exchange Act) of thirty five percent (35%) or more of the then outstanding
voting stock of the Company through a transaction which has not (or a series of transactions which
have not) been arranged by or consummated with the prior approval of the Board of Directors; or

          (b) a majority of the members of the Board of Directors is replaced during any consecutive
twelve-month period by Directors whose appointment or election is not endorsed by a majority of the
members of the Board of Directors prior to the date of appointment or election;

          (c) the Company enters into a Merger Sale Agreement; provided however, that the entry into a
Merger Sale Agreement shall only be deemed a “Change in Control” if the Eligible Person’s
employment with or service to the Company and all of its Affiliates is terminated (without cause in
the case of an Eligible Person that is an Employee) during the period beginning on the date the
Merger Sale Agreement is executed and ending on the earlier of: (i) the date the transaction
contemplated by the Merger Sale Agreement is consummated; and (ii) the date the Merger Sale
Agreement is terminated; or

          (d) the consummation of a Merger Sale.

2

 

     1.09 Code and Internal Revenue Code mean the Internal Revenue Code of 1986, as
amended.

     1.10 Committee means: (a) the Board of Directors, with respect to any Award that has
been or may be granted to any Eligible Person who is not an Employee; (b) with respect to any Award
that has been or may be granted to any Executive Officer, the Board of Directors upon the
recommendation of the Compensation Committee; or (c) the Compensation Administration Committee,
with respect to Awards to Employees who are not Executive Officers.

     1.11 Common Stock means the common stock (par value $0.01 per share) of the Company.

     1.12 Company means Gibraltar Industries, Inc., a Delaware corporation.

     1.13 Compensation Administration Committee means a committee comprised of the
Company’s President and two (2) senior level management employees of the Company, selected by the
President and employed in a position which is at the director level or any more senior position;
provided that, the President may, in his discretion and at any time, remove and/or replace with
different senior level management employees, either or both of the senior level management
employees who serve with the President as members of the Compensation Committee.

     1.14 Compensation Committee means the Compensation Committee of the Board of
Directors.

     1.15 Covered Executive means, with respect to any Award granted hereunder, any
individual who at the Date of Grant of such Award is a “Covered Employee” of the Company for such
year for purposes of Section 162(m) of the Code.

     1.16 Covered Individual means any current or former member of the Committee, any
current or former officer or director of the Company or any individual designated by the Committee
to assist it in the administration of this Plan as provided for by the second paragraph of Section
11.02.

     1.17 Date of Grant means, with respect to any Award, the date on which the Committee
approves the grant of such Award, or such later date as may be specified as the date of grant of
such Award in the instrument evidencing the grant of such Award.

     1.18 Disability means, with respect to any Employee, such employee’s “permanent and
total disability” as defined in Section 22(e)(3) of the Code or any successor provision.

     1.19 Dividend Equivalent Units means additional Restricted Units, additional
Performance Units or additional Rights credited to a Participant pursuant to Section 5.04, Section
6.04 or Section 7.02.

     1.20 Dividend Payment Date means each date on which the Company pays a dividend on its
Common Stock.

3

 

     1.21 Eligible Person means: (a) each Employee of the Company or any Affiliate; (b)
each member of the Board of Directors who is not an Employee of the Company or any Affiliate; and
(c) any natural person that is a consultant or other independent advisor providing services to the
Company or any Affiliate.

     1.22 Employee means each natural person that is engaged in the performance of services
for the Company or any Affiliate for wages as defined in Section 3101(a) of the Code.

     1.23 Executive Officer means: (a) the CEO; (b) the Company’s President; (c) the
Company’s principal financial officer; (d) the Company’s principal accounting officer; (e) any Vice
President of the Company who is in charge of a principal business unit, division or function; (f)
any other officer of the Company who performs a policy making function for the Company; (g) any
officer of any Affiliate who performs policy making functions for the Company; and (h) any other
person who performs policy making functions for the Company.

     1.24 Fair Market Value means, for purposes of determining the value of any Share, Unit
or Right, except as otherwise expressly provided by the terms of the instrument containing the
terms of an Award, the closing price of a share of Common Stock as reported by the NASDAQ National
Market System on the date as of which the determination of Fair Market Value is to be made or, if
no sale of Common Stock shall have been made on the NASDAQ National Market System on that day, on
the next preceding day on which there was a sale of Common Stock.

     1.25 Incentive Stock Option means an Option that is an “incentive stock option” within
the meaning of Section 422 of the Code.

     1.26 Merger Sale means the consolidation, merger, or other reorganization of the
Company, other than: (a) any such consolidation, merger or reorganization of the Company in which
holders of Common Stock immediately prior to the earlier of: (i) the Board of Director’s approval
of such consolidation, merger or other reorganization; or (ii) the date of the stockholders meeting
in which such consolidation, merger or other reorganization is approved, continue to hold more than
seventy percent (70%) of the outstanding voting securities of the surviving entity immediately
after the consolidation, merger, or other reorganization; and (b) any such consolidation, merger or
other reorganization which is effected pursuant to the terms of a Merger Sale Agreement which
provides that the consolidation, merger or other reorganization contemplated by the Merger Sale
Agreement will not constitute a Change in Control for purposes of this Plan.

     1.27 Merger Sale Agreement means an agreement between the Company and any one or more
other persons, firms, corporations or other entities (which are not Affiliates of the Company)
providing for a consolidation, merger or other reorganization in which the holders of Common Stock
of the Company immediately prior to the Company’s execution of such agreement do not hold more than
seventy percent (70%) of the outstanding voting securities of the surviving entity immediately
after the consummation of the consolidation, merger, or other reorganization contemplated by such
agreement.

     1.28 Non-Qualified Stock Option means an Option that is not an Incentive Stock Option.

4

 

     1.29 Option means an option to purchase Shares granted pursuant to Article 4 of the
Plan or, solely for purposes of Section 4.08(b), granted under any other stock option plan
maintained by the Company.

     1.30 Option Cash Out Payment means an amount, payable to a Participant that is the
holder of Options, equal to the amount by which: (a)(i) the greatest of: (A) the Fair Market Value
of one Share, determined as of the date a Merger Sale Agreement is executed by the Company; (B) the
Fair Market Value of one Share, determined as of the day immediately preceding the date a Change in
Control occurs; and (C) the amount, if any, of cash payable with respect to one Share in connection
with the consummation of the Change in Control as provided for by the certificate filed with the
Delaware Secretary of State to effect the Change in Control; multiplied by (ii) the total number of
Shares which the Participant is entitled to acquire pursuant to all Options (whether or not such
Options are then currently exercisable pursuant to the provisions of the instruments containing the
terms of the Option Awards held by the Participant) held by the Participant on the date the Change
in Control is effective; exceeds (b) the aggregate amount which the Participant would be required
to pay to the Company in connection with the purchase by the Participant of all Shares which the
Participant is entitled to purchase pursuant to the exercise of all unexpired and unexercised
Options held by the Participant as of the date the Change in Control is effective (whether or not
such Options are then currently exercisable pursuant to the provisions of the instruments
containing the terms of the Option Awards held by the Participant).

     1.31  Participant means any Eligible Person who holds an Award granted under the Plan,
and any successor, permitted transferee or Beneficiary that succeeds to such individual’s interest
in such Award.

     1.32 Performance Goals means the performance goals established by the Committee in
connection with Awards granted to Eligible Persons under Article 6, which performance goals are
used to determine whether any payment will be made to Eligible Persons in connection with Awards
granted under Article 6 and, if any such payments are to be made, the amount of the payments.

     1.33  Performance Period means the period established by the Committee for measuring
whether, and to what extent, any Performance Goals established in connection with any Award granted
under Article 6 hereof have been met.

     1.34 Performance Shares means Shares that may be issued and delivered pursuant to an
Award made to an Eligible Person under Article 6, depending on the achievement, or the level of
achievement, of one or more Performance Goals within such period, as provided in Article 6.

     1.35 Performance Units means Units credited to an Eligible Person at the beginning of
a Performance Period pursuant to an Award made to such individual under Article 6, and any Dividend
Equivalent Units that are credited to the individual with respect to such Units during such
Performance Period, payment with respect to which Units and related Dividend Equivalent Units
depends on the achievement, or the level of achievement, of one or more Performance Goals within
such period, as provided in Article 6.

5

 

     1.36 Plan means the Gibraltar Industries, Inc. 2005 Equity Incentive Plan, as set
forth herein and as amended from time to time hereafter.

     1.37 Pro Rata Portion means, with respect to any portion of any Award of Restricted
Shares or Restricted Units made hereunder, with respect to any portion of any Award of Performance
Shares or Performance Units made hereunder, or with respect to any portion of any Award of Rights
made hereunder, the percentage determined by dividing: (a) the number of full and partial calendar
months in the period beginning on the first day of: (i) the Restricted Period established for such
portion of the Restricted Shares or Restricted Units so granted; (ii) the Performance Period
established for such portion of the Performance Shares or Performance Units so awarded; or (iii)
the Appreciation Period established for such portion of the Rights so awarded, and ending on the
date the Eligible Person’s employment with or service to the Company and each of its Affiliates is
terminated; by (b) the total number of full and partial calendar months in such Restricted Period,
in such Performance Period, or in such Appreciation Period, whichever the case may be.

     1.38 Restricted Period means the period of time during which Restricted Shares or
Restricted Units are subject to Restrictions as set forth in Article 5.

     1.39 Restricted Shares means Shares which are granted subject to Restrictions pursuant
to Article 5.

     1.40 Restricted Units means Units credited to an Eligible Person which are subject to
Restrictions at the beginning of a Restricted Period pursuant to an Award made to such Eligible
Person under Article 5, and any Dividend Equivalent Units that are credited to the Eligible Person
with respect to such Units during such Restricted Period as provided in Article 5.

     1.41 Restrictions means the restrictions to which Restricted Shares or Restricted
Units are subject under the provisions of Section 5.02.

     1.42 Retirement means the termination of a Participant’s employment with or service to
the Company and all of its Affiliates, provided that such termination occurs after: (a) the
Participant has either: (i) been continuously employed by or provided services (as a non-employee
director, consultant or other service provider) to the Company or any of its Affiliates for a
period of at least five (5) years and attained at least age sixty (60); or (ii) attained at least
age sixty-five (65); and (b) the Participant has given at least thirty (30) days advance written
notice to the Company or, if applicable, the Affiliate of the Company by whom the Participant is
employed or for whom the Participant is providing services, which notice states that the
Participant will retire from his or her employment with or service to the Company and its
Affiliates.

     1.43 Right means an Award which enables the Eligible Person to whom the Award has been
made to receive Shares having a Fair Market Value equal to an amount which is based on the amount
by which the Fair Market Value of one Share at the end of the Appreciation Period exceeds the Base
Price of one Share at the beginning of the Appreciation Period.

     1.44 Right Cash Out Payment means an amount, payable to a Participant that is the
holder of Rights, equal to the amount by which: (a)(i) the greatest of: (A) the Fair Market Value

6

 

of one Share, determined as of the date a Merger Sale Agreement is executed by the Company;
(B) the Fair Market Value of one Share, determined as of the day immediately preceding the date a
Change in Control occurs; and (C) the amount, if any, of cash payable with respect to one Share in
connection with the consummation of the Change in Control as provided for by the certificate filed
with the Delaware Secretary of State to effect the Change in Control; multiplied by (ii) the total
number of Shares represented by the Rights held by the Participant; exceeds (b) the aggregate Base
Price of the Shares used to calculate the value of the Rights held by the Participant, determined,
with respect to each Right, as of the date the Right was granted to the Participant and adjusted,
if applicable, pursuant to Section 3.02.

     1.45 Share means a share of Common Stock.

     1.46 Termination of Service means: (a) with respect to any Employee, his or her
ceasing to be employed by the Company and each of its Affiliates; (b) with respect to any
non-employee director, his or her ceasing to serve as a member of the Board of Directors; and (c)
with respect to any consultant or other service provider, that is a natural person, the termination
of all consulting or other service providing arrangements which such consultant or service provider
has with the Company and each Affiliate of the Company.

     1.47 Unit means a unit of measurement equivalent to one Share, with none of the
attendant rights of a shareholder of such Share, (including among the rights which the holder of a
Unit does not have are the right to vote such Share and the right to receive dividends thereon),
except to the extent otherwise specifically provided herein.

ARTICLE 2.

AWARDS

     2.01 Form of Awards. Awards under the Plan may be made in the form of Options,
Restricted Shares, Restricted Units, Performance Shares, Performance Units and Rights. An Award in
any of the foregoing forms may be granted to any Eligible Person or to any group of Eligible
Persons, upon terms and conditions that differ from the terms and conditions upon which any other
Awards in the same form are made to other Eligible Persons or groups of Eligible Persons.

     2.02 Written Instrument. Each Award made to an Eligible Person under the Plan shall
be evidenced by a written instrument in such form as the Committee shall prescribe, setting forth
the terms and conditions of the Award. The instrument evidencing the grant of any Award hereunder
shall specify that the Award shall be subject to all of the terms and provisions of the Plan as in
effect from time to time but subject to the limitation on amendments set forth in Section 11.09 of
the Plan.

     2.03 Surrender and Exchange of Awards. The Committee may, in its discretion, grant an
Award to a Participant who has previously been granted an Award under the Plan or an award under
any other employee compensation or benefit plan maintained by the Company or any of its Affiliates
(any such previously granted Award or award being hereinafter referred to as a “Prior Award”), in
exchange for the surrender and cancellation of such Prior Award or any portion thereof. The new
Award so granted may, in the discretion of the Committee, be in a form which is different than
that of the Prior Award surrendered, and may be granted subject to terms and

7

 

conditions that differ from those to which the surrendered Prior Award were subject.
Notwithstanding the foregoing, no grant of a new Award in exchange for a Prior Award may be made
hereunder unless: (a) the aggregate fair value of the new Award does not exceed the aggregate fair
value of the Prior Award, determined as of the time the new Award is granted; and (b) the grant of
the new Award would not constitute a “repricing” of any Option or would not otherwise be treated as
a “material revision” of the Plan.

ARTICLE 3.

SHARES SUBJECT TO THE PLAN

     3.01 Shares Available for Awards. Shares distributed in respect of Awards made under
the Plan may be authorized but unissued Shares, Shares held in the treasury of the Company or
Shares purchased by the Company on the open market at such time or times and in such manner as it
may determine. The Company shall be under no obligation to issue or acquire Shares in respect of
an Award made under the Plan before the time when delivery of Shares is due under the terms of the
Award. The number of Shares available for distribution in respect of Awards made under the Plan
shall be subject to the following limitations:

          (a) Subject to the provisions of Section 3.02 hereof, effective as of May 19, 2005 (the date
on which this Plan became effective) the aggregate number of Shares that were authorized to be
issued in respect of Awards made under the Plan was limited to two million two hundred fifty
thousand (2,250,000) Shares. Effective as of the date this amendment and restatement is approved
by the Company’s stockholders, in addition to the number of Shares available for issuance pursuant
to the terms of the Plan as of December 31, 2008, an additional seven hundred fifty thousand
(750,000) Shares may be issued in respect of Awards made under the Plan and shall be reserved for
issuance pursuant to the terms of the Plan. Accordingly, the total number of Shares which may be
issued pursuant to Awards issued under the terms of the Plan shall, subject to the provisions of
Section 3.02 hereof, be equal to three million (3,000,000) Shares. The maximum number of Shares
that are available for issuance pursuant to the Plan shall not be reduced by Awards of Restricted
Units that are payable only in cash in an amount equal to the Fair Market Value of the Restricted
Units which are the subject of such Awards and shall not be reduced by Awards of Performance Units
that are payable only in cash in an amount equal to the Fair Market Value of the Performance Units
which are the subject of such Awards. The maximum aggregate number of Shares that may be issued
pursuant to all Awards of Incentive Stock Options and Rights granted under the Plan shall not
exceed nine hundred thousand (900,000) Shares.

          (b) Subject to the provisions of Section 3.01(a) and Section 3.01(c), upon the grant of any
Award, the overall aggregate number of Shares available for further Awards under the Plan, and if
the Award so granted was in a form subject to a limitation on the aggregate number of Shares
available for Awards in that form, the aggregate number of Shares available for further Awards
under the Plan in that form, shall be reduced by the number of Shares subject to the Award so
granted.

          (c) There shall be added back to the aggregate number of Shares available for the grant of
Awards under the Plan, as determined under (a) and (b) above, the following: (i) any Shares as to
which an Option granted hereunder has not been exercised at the time of its expiration,
cancellation or forfeiture; (ii) any Shares included in any other form of Award

8

 

granted to an Eligible Person hereunder, to the extent that the person’s right to receive such
Shares, or any cash payment in settlement of such Award, is forfeited; (iii) any Shares represented
by Restricted Units granted hereunder as to which payment is to be made in cash instead of by the
issuance and delivery of Shares; (iv) any Shares represented by Performance Units granted hereunder
as to which payment is to be made in cash instead of by the issuance of Shares; and (v) any Shares
subject to an Option granted hereunder, or covered by any other form of Award made hereunder, to
the extent such Option or other Award is surrendered in exchange for any other Award made
hereunder.

     3.02 Certain Adjustments to Shares. In the event of any change in the number of
outstanding Shares of Common Stock without receipt of consideration by the Company resulting from
any stock dividend, stock split, recapitalization, reorganization, merger, consolidation, split-up,
combination or exchange of Shares, or any rights offering to purchase Shares of Common Stock at a
price substantially below fair market value, or any similar change affecting the Shares of Common
Stock: (a) the maximum aggregate number and kind of Shares specified herein as available for the
grant of Awards, or for the grant of any particular form of Award, under the Plan; (b) the number
and kind of Shares that may be issued and delivered to Participants upon the exercise of any
Option, or in payment with respect to any Award of Restricted Shares or Performance Shares, that is
outstanding at the time of such change; (c) the number and kind of Shares represented by any
Restricted Units, Performance Units, Rights or Dividend Equivalent Units that are outstanding at
the time of such change; (d) the number of Shares represented by any Award of Rights; (e) the
exercise price per share of any Options granted hereunder that are outstanding at the time of such
change; and (f) the Base Price established with respect to any Rights granted hereunder that are
outstanding at the date of such change, shall be appropriately adjusted consistent with such change
in such manner as the Compensation Administration Committee, in its sole discretion, may deem
equitable to prevent substantial dilution or enlargement of the rights granted to, or available
for, the Participants hereunder.

     In the case of any outstanding Incentive Stock Option, any such change shall be made in the
manner that satisfies the requirements that must be met under Section 424 of the Code in order for
such change not to be treated as a “modification” of such Option as defined under Section 424 of
the Code.

     The Committee shall give notice to each Participant of any adjustment made pursuant to this
Section and, upon such notice, such adjustment shall be effective and binding for all purposes.

     3.03 Listing and Qualification of Shares. The Company, in its discretion, may
postpone the issuance, delivery, or distribution of Shares with respect to any Award until
completion of such stock exchange listing or other qualification of such Shares under any state or
federal law, rule or regulation as the Company may consider appropriate, and may require any
Participant to make such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of the Shares in compliance with applicable
laws, rules and regulations.

9

 

ARTICLE 4.

OPTIONS

     4.01 Awards of Options. Subject to the limitations set forth in Article 3 above and
to the other terms and conditions of the Plan, Options may be granted under the Plan to Eligible
Persons for the purchase of such number of Shares, at such times and, upon such terms and
conditions, as the Committee in its discretion may determine.

     4.02 Type of Options. Each Option granted hereunder shall be identified in the
instrument evidencing such grant as either: (a) an Option intended to be treated as an Incentive
Stock Option; or (b) an Option that shall be treated as a Non-Qualified Stock Option.

     4.03 Term of Options. The period of time during which an Option may be exercised
shall be such period of time as is determined by the Committee and specified in the instrument
setting forth the terms of the Option Award; provided that, in no event may the period of time
during which an Option may be exercised exceed ten (10) years from the Date of Grant of the Option.
Notwithstanding any other provision in this Plan to the contrary, no Option may be exercised after
its expiration.

     4.04 Exercise of Options. Each Option granted hereunder shall become exercisable, in
whole or in part, at such time or times during its term as the instrument evidencing the grant of
such Option shall specify. To the extent that an Option has become exercisable, it may be
exercised thereafter, in whole or in part, at any time or from time to time prior to its
expiration, as to any or all Shares as to which the Option has become and remains exercisable,
subject to the provisions of Section 4.05 below.

     4.05 Termination of Service. Except as the instrument evidencing the grant of an
Option may otherwise provide, the portion of any outstanding Option held by an Eligible Person on
the date of his or her Termination of Service that has not become exercisable prior to such date,
and the portion of such Option which was exercisable but had not been exercised prior to the date
of the Eligible Person’s Termination of Service, shall be forfeited on such date.

     Notwithstanding the foregoing, if the Committee so determines, in its discretion, the
instrument evidencing the grant of an Option may provide that the portion of the Option that is
exercisable at the time of the Eligible Person’s Termination of Service will continue to be
exercisable, and that the portion of such Option that is not exercisable at such time will become
exercisable in accordance with the terms of the Option and remain exercisable thereafter, during
such period of time after the date on which the Eligible Person’s Termination of Service occurs
(but not beyond the expiration of the term of the Option), in such circumstances and subject to
such terms and conditions, as are specified in such instrument. However, to the extent that any
Option granted hereunder to an Employee as an Incentive Stock Option is exercised more than three
months after the date of such Employee’s Termination of Service for any reason other than
Disability, or more than one year after such date if the Employee’s Termination of Service occurred
because of Disability, the Option shall be treated as a Non-Qualified Stock Option for purposes of
the Plan.

     4.06 Exercise Price and Method of Exercise. The price at which Shares may be
purchased upon any exercise of an Option shall be the price per share determined by the

10

 

Committee and specified in the instrument evidencing the grant of such Option; provided that,
in no event shall the exercise price per Share be less than: (a) the Fair Market Value of a Share
determined as of the Date of Grant of the Option; or (b) if greater, the par value of a Share.

     An Option shall be exercised by delivery of a written notice of exercise, in a form
satisfactory to the Committee, to the Company at its principal business office and addressed to the
attention of the Company’s Secretary or such other person as the Company’s Secretary may have
designated to receive such notice. The notice shall specify the number of Shares with respect to
which the Option is being exercised. The notice shall be accompanied by payment of the exercise
price of the Shares for which the Option is being exercised, which payment shall be made under one
or more of the methods of payment provided in Section 4.07 below.

     4.07 Payment. Payment of the exercise price for Shares purchased upon the exercise of
an Option shall be made by one, or by a combination of any, of the following methods: (a) in cash,
which may be paid by check or other instrument acceptable to the Company, or by wire transfer of
funds, in each case in United States dollars; (b) if permitted by the Committee and subject to any
terms and conditions it may impose on the use of such methods, by: (i) the delivery to the Company
of other Shares owned by the Participant; provided that such shares have been owned by the
Participant for the requisite period necessary to avoid a charge to the Company’s earnings; or (ii)
the surrender to the Company of Shares that otherwise would have been delivered to the Participant
upon exercise of the Option; and (c) to the extent permissible under applicable law, through any
cashless exercise sale and remittance procedure that the Committee in its discretion may from time
to time approve.

     For purposes of determining the portion of the exercise price payable upon the exercise of an
Option that will be treated as satisfied by the delivery or surrender of Shares pursuant to clause
(b) (i) or (ii) above, Shares so delivered or surrendered shall be valued at their Fair Market
Value determined as of the business day next preceding the date on which the Option is exercised .

     4.08 Incentive Stock Options. Notwithstanding any other provisions of the Plan,
Incentive Stock Options granted under the Plan shall be subject to the following provisions:

          (a) No Incentive Stock Option may be granted under the Plan after February 9, 2015.

          (b) To the extent that the aggregate Fair Market Value of Shares with respect to which
Incentive Stock Options granted under the Plan and under all other stock option plans maintained by
the Company are exercisable for the first time by a Participant during any calendar year exceeds
$100,000, the Incentive Stock Options so exercisable shall be treated as Non-Qualified Stock
Options. For purposes of the foregoing, the Fair Market Value of Shares as to which any Incentive
Stock Option may be exercised shall be determined as of the Date of Grant of such Option. The
determination of whether the limitation set forth in the first sentence of this Section 4.08(b)
applies with respect to any Incentive Stock Option granted under the Plan shall be made in
accordance with applicable provisions of Section 422 of the Code and the regulations issued
thereunder.

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          (c) No Incentive Stock Option shall be granted to an Employee if, as of the Date of Grant of
such Option, such Employee owns stock possessing more than ten percent of the total combined voting
power of all classes of stock of the Company, unless: (i) the exercise price per Share under such
Option is at least 110% percent of the Fair Market Value of a Share determined as of the Date of
Grant of such Option; and (ii) such Option is not exercisable after the expiration of five (5)
years from the Date of Grant of such Option. If an Option, designated as an Incentive Stock
Option, is granted to an Employee who owns more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company and either the price per Share at which the Option is
exercisable or the date on which the Option expires does not satisfy the limitations specified
above, such Incentive Stock Option shall be treated as a Non-Qualified Stock Option.

          (d) The instrument evidencing the grant of any Incentive Stock Option shall require that if
any Shares acquired upon the exercise of such Option are disposed of within 2 years from the Date
of Grant of such Option, or within one year from the date as of which the Shares disposed of were
transferred to the Participant pursuant to the exercise of such Option, the Participant shall give
the Company written notice of such disposition, within ten days following the date of such
disposition.

     4.09 Other Option Provisions. The instrument evidencing the grant of any Option
hereunder may contain such other terms and conditions, not inconsistent with the provisions of the
Plan or any applicable law, as the Committee may determine.

     4.10 Rights of a Shareholder. Upon the exercise by a Participant of an Option or any
portion thereof in accordance with the Plan, the provisions of the instrument evidencing the grant
of such Option and any applicable rules and regulations established by the Committee and the
issuance to the Participant of a certificate representing the Shares with respect to which the
Option has been exercised, the Participant shall have all of the rights of a stockholder of the
Company with respect to the Shares issued as a result of such exercise. Prior to the issuance to a
Participant of a certificate representing Shares issuable to the Participant upon his or her
exercise of an Option, the Participant shall not have any rights as a stockholder of the Company
with respect to such Shares.

ARTICLE 5.

RESTRICTED SHARES AND RESTRICTED UNITS

     5.01 Awards of Restricted Shares and Restricted Units. Subject to the limitations set
forth in Article 3 and to the other terms and conditions of the Plan, Restricted Shares and
Restricted Units may be granted to such Eligible Persons, at such times, and in such amounts, as
the Committee may determine in its discretion. In addition to Awards of Restricted Shares or
Restricted Units which may be made to any Eligible Person in recognition of services provided to
the Company and its Affiliates or as an incentive for such Eligible Person to continue to
contribute to the profitability and growth of the Company and its Affiliates, effective as of May
19, 2005, the Company adopted a framework under which a specific type of Restricted Unit Awards
will be made, which framework, as amended from time to time prior to the effective date hereof, is
known as the Gibraltar Industries, Inc. Management Stock Purchase Plan (the “MSPP”). The MSPP is
intended to be treated as an integral part of this Plan and provides for the granting of Awards of
Restricted Units to Eligible Persons in consideration for and

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recognition of the agreement of such Eligible Persons to authorize the Company to credit
Restricted Units to an account established for the benefit of such Eligible Persons under the MSSP
in lieu of the payment to such Eligible Persons of a portion of the base salary and/or a portion of
the annual incentive bonus (in the case of an Eligible Person that is an Employee) or all or part
of the Director fees (in the case of an Eligible Person that is a member of the Company’s Board of
Directors) which such Eligible Persons would otherwise be entitled to receive from the Company and
its Affiliates.

     5.02 Restrictions and Restricted Period. At the time of each grant of Restricted
Shares or Restricted Units to any Participant, the Committee shall establish a period of time
within which the Restricted Shares or Restricted Units covered by such grant (and the Participant’s
right to receive payment with respect to such Restricted Units) may not be sold, assigned,
transferred (other than a transfer to the Participant’s Beneficiary occurring by reason of the
Participant’s death), made subject to gift, or otherwise disposed of, or mortgaged, pledged or
otherwise encumbered, whether voluntarily or by operation of law. The Committee in its discretion
may prescribe a separate Restricted Period for any specified portion of the Restricted Shares or
Restricted Units granted pursuant to any Award.

     5.03 Rights While Restricted Shares Remain Subject to Restrictions. Restricted Shares
granted to a Participant hereunder may be issued to the Participant as of the Date of Grant as
uncertificated shares or as Shares represented by a stock certificate bearing a legend or legends
making appropriate references to the Restrictions. Until the Restrictions which apply to
Restricted Shares lapse in accordance with the provisions of Section 5.05 below or Section 9.01(c),
the Restricted Shares granted to a Participant which are not certificated shall be held in the
Participant’s name in a bookkeeping account maintained by the Company and Restricted Shares granted
to a Participant and represented by a stock certificate shall continue to bear the legend or
legends making reference to the Restrictions. A separate account shall be maintained for all
Restricted Shares granted to a Participant with a Restricted Period ending on the same date.

     Except for the Restrictions which apply to Restricted Shares, and subject to the forfeiture
provisions applicable under Section 5.06 below, a Participant shall have, with respect to all
Restricted Shares so held for his account, all of the rights of a stockholder of the Company,
including full voting rights with respect to such Shares and the right to receive currently with
respect to the Participant’s Restricted Shares all dividends and other distributions payable
generally on the Company’s Shares. If any dividends or distributions so payable are paid in Shares,
the Shares paid as a dividend or distribution with respect to a Participant’s Restricted Shares
shall be subject to the same Restrictions and provisions relating to forfeiture as apply to the
Restricted Shares with respect to which they were paid. Such stock dividend Shares shall
themselves be treated as Restricted Shares, and shall be credited to the same account which the
Company maintains for those Restricted Shares of the Participant with respect to which such stock
dividends or distributions were paid.

     Notwithstanding the foregoing, if the instrument evidencing the grant of any Restricted Shares
to a Participant so provides, all cash dividends and distributions payable generally on the
Company’s Shares that are otherwise payable with respect to the Restricted Shares granted to the
Participant shall not be paid currently to the Participant but instead, shall be applied to the
purchase of additional Shares for the Participant’s account. The additional Shares so purchased

13

 

shall be subject to the same Restrictions and provisions relating to forfeiture as apply to
the Restricted Shares with respect to which they were paid. Such additional Shares shall
themselves be treated as Restricted Shares, and shall be credited to the same account which the
Company maintains for those Restricted Shares of the Participant with respect to which such
dividends or distributions were paid. The purchase of any such additional Shares shall be made in
accordance with such other procedure as may be specified in the instrument evidencing the grant of
the Restricted Shares on which such dividends are paid.

     5.04 Rights While Restricted Units Remain Subject to Restrictions. No Shares shall be
issued at the time an award of Restricted Units is made. Except as provided in the following
paragraph or otherwise provided by the instrument evidencing an Award of Restricted Units, a
Participant that is the holder of an Award of Restricted Units shall not have any rights as a
shareholder with respect to such Restricted Units. Restricted Units granted to a Participant
hereunder shall be credited to a bookkeeping account maintained by the Company for the Participant.
A separate account shall be maintained for all Restricted Units granted to a Participant with a
Restricted Period ending on the same date and for all Dividend Equivalent Units that are to be
credited to such account in accordance with the next following paragraph.

     If any dividends or other distributions payable on the Company’s Shares are paid in Shares
during any period that a Participant holds an Award of Restricted Units, as of the applicable
Dividend Payment Date, a number of additional Restricted Units shall be credited to each account
established for the Participant to reflect the number of Restricted Units held by the Participant
as of such Dividend Payment Date. The number of additional Restricted Units to be credited shall
be determined by first multiplying: (a) the total number of Restricted Units standing to
the Participant’s credit in such account on the day immediately preceding such Dividend Payment
Date (including all Dividend Equivalent Units credited to such account on all previous Dividend
Payment Dates); by (b) the per share dollar amount of the dividend paid on such Dividend Payment
Date; and then, (c) dividing the resulting amount by the Fair Market Value of one Share on
such Dividend Payment Date. Dividend Equivalent Units awarded pursuant to this paragraph to a
Participant that holds an Award of Restricted Units shall have the same Restricted Period as the
Restricted Units with respect to which such Dividend Equivalent Units have been awarded.

     5.05 Lapse of Restrictions and Payment. Upon the expiration of the Restricted Period
for any Restricted Shares or Restricted Units granted to a Participant hereunder but subject to the
provisions of Section 5.06 below, the Restrictions applicable to such Restricted Shares or
Restricted Units shall lapse, and payment with respect to such Restricted Shares or Restricted
Units (including any related Dividend Equivalent Units) shall be made in accordance with the
following provisions:

          (a) In the case of Restricted Shares, payment shall be made by delivery to the Participant of
a stock certificate for the number of such Restricted Shares, free and clear of all Restrictions to
which such shares were subject. However, if the Restricted Shares with respect to which the
applicable Restrictions have lapsed includes a fractional Share, payment for such fractional Share
shall be made in cash, in an amount equal to the Fair Market Value of such fractional Share
determined as of the date on which such Restrictions lapsed. Delivery of such stock certificate
and any such cash payment shall be made to the Participant as soon as practicable following the
lapse of the applicable Restrictions.

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          (b) In the case of Restricted Units (including related Dividend Equivalent Units), payment
shall be made: (i) in all cases other than Restricted Units issued in connection with the MSPP, by
the issuance and delivery to the Participant of a stock certificate for a number of Shares equal to
the number of whole Restricted Units and related Dividend Equivalent Units with respect to which
the applicable Restrictions have lapsed, and (ii) by payment in cash for any fractional Restricted
Unit payable as a result of the lapse of such Restrictions, in an amount equal to the Fair Market
Value of such fractional Restricted Unit determined as of the date as of which such Restrictions
lapsed. In the case of Restricted Units issued pursuant to the terms of the MSPP, payment shall be
made, in cash, in an amount and at the time provided for in the MSPP. Issuance of certificates for
Shares shall be made in such manner and at such time or times as provided in such instrument.
Unless otherwise provided by the instrument evidencing a grant of Restricted Units, payment with
respect to any part or all of a Participant’s Restricted Units (including related Dividend
Equivalent Units) may be deferred, at the Participant’s election, upon such terms and conditions as
are specified by the Participant, in writing, subject to the restrictions on deferral of
compensation contained in Code Section 409A.

     5.06 Termination of Service. Except as the instrument evidencing the grant of
Restricted Shares or Restricted Units may otherwise provide, upon an Eligible Person’s Termination
of Service for any reason prior to the expiration of the Restricted Period which is in effect for
any Restricted Shares or Restricted Units (and related Dividend Equivalent Units) standing to his
or her credit immediately prior to such Termination of Service, the Eligible Person’s right to
receive payment with respect to such Restricted Shares, Restricted Units and Dividend Equivalent
Units shall be forfeited and cancelled as of the date of such Termination of Service, and no
payment of any kind shall be made with respect to such Restricted Shares, Restricted Units and
Dividend Equivalent Units.

     Notwithstanding the foregoing, if the Committee so determines, in its discretion, the
instrument evidencing the Award of such Restricted Shares or Restricted Units may provide that if
the Eligible Person’s Termination of Service occurs prior to the end of the Restricted Period
established for such Restricted Shares or Restricted Units as a result of the Eligible Person’s
death, Disability or Retirement (but not for any other reason), payment will be made with respect
to all or a Pro Rata Portion of such Restricted Shares or Restricted Units and any related Dividend
Equivalent Units. In such case, only the Eligible Person’s right to receive payment with respect
to any remaining portion of the Restricted Shares or Restricted Units (and related Dividend
Equivalent Units) for which such Restricted Period was established shall be cancelled and
forfeited. Any payment required to be made with respect to an Eligible Person’s Restricted Shares
or Restricted Units (and related Dividend Equivalent Units) pursuant to this paragraph shall be
made as soon as practicable after the date of such Eligible Person’s Termination of Service, and
shall be made in the manner specified in Section 5.05.

     Notwithstanding the provisions of Section 5.03 or of the above and notwithstanding the absence
of the provisions of this paragraph from provisions of any instrument containing the provisions of
an Award issued prior to the effective date of this Amendment and Restatement, if an Eligible
Person’s Termination of Service occurs, for any reason, prior to the expiration of the Restricted
Period which is in effect for an Award of Restricted Shares, the Eligible Person shall, upon such
Termination of Service, be deemed to forfeit his right to all cash dividends received with respect
to the portion of the Restricted Shares previously awarded to such Eligible Person

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with respect to which the Restrictions have not lapsed. In connection with the forfeiture by
an Eligible Person of the cash dividends received by the Eligible Person with respect to the
Restricted Shares previously awarded to the Eligible Person with respect to which the Restrictions
have not lapsed, the Eligible Person shall be obligated to pay to the Company, no later than thirty
(30) days following such Eligible Person’s Termination of Service, the amount of the dividends
received by such Eligible Person which is deemed to be forfeited pursuant to the provision of the
preceding sentence. In connection with the foregoing, if, pursuant to the provisions of the
preceding paragraph, the Committee has provided in the instrument evidencing the Award of
Restricted Shares that the Eligible Person’s right to receive payment for all or a Pro Rata portion
of the Restricted Shares will not be forfeited if the Eligible Person’s Termination of Service
occurs prior to the end of the Restricted Period established for such Restricted Shares as a result
of the Eligible Person’s death, Disability or Retirement (but not for any other reason), the
Eligible Person will not forfeit his right to all cash dividends received with respect to the
portion of Restricted Shares as to which the Restrictions have not lapsed and such Eligible Person
shall be entitled to retain all or a portion of such cash dividends.

     5.07 Notice of Code Section 83(b) Election. A Participant who files an election under
Section 83(b) of the Code to include in gross income the Fair Market Value of any Restricted Shares
granted hereunder while such Shares are still subject to Restrictions shall furnish the Company
with a copy of the election so filed by the Participant, within ten days of the filing of such
election with the Internal Revenue Service.

ARTICLE 6.

PERFORMANCE SHARES AND PERFORMANCE UNITS

     6.01 Awards of Performance Shares and Performance Units. Subject to the limitations
set forth in Article 3 and to the other terms and conditions of the Plan, Performance Shares or
Performance Units may be granted to such Eligible Persons, at such times, in such amounts, and
upon such terms and conditions, as the Committee may determine in its discretion. Performance
Shares and Performance Units shall be granted in accordance with the provisions set forth below.

     6.02 Establishment of Performance Goals and Performance Targets. In connection with
each Award of Performance Shares or Performance Units, the Committee shall establish in writing,
and the instrument evidencing the grant of such Award shall specify: (a) the Performance Goal or
Goals and the Performance Period that will apply with respect to such Award; (b) the level or
levels of achievement of the Performance Goal or Goals that must be met in order for payment to be
made with respect to the Award; (c) the number of Performance Shares that will be issued and
delivered to the recipient of the Award, or the percentage of the Performance Units (and any
related Dividend Equivalent Units) credited to the recipient in connection with the Award as to
which payment will be made, if the Performance Goal or Goals applicable to such Award: (i) have
been fully achieved; (ii) have been exceeded; or (iii) have not been fully achieved but have been
achieved at or beyond any minimum or intermediate level of achievement specified in the instrument
evidencing the grant of such Award; and (d) such other terms and conditions pertaining to the Award
as the Committee in its discretion may determine. In connection with any such Award made to any
Covered Executive, the matters described in the preceding sentence shall be established within such
period of time as may be permitted by the regulations issued under Section 162(m) of the Code.

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     6.03 Rights While Performance Shares Remain Subject to Achievement of Performance
Goals. Performance Shares granted to a Participant hereunder may be issued to the Participant
as of the Date of Grant as uncertificated shares or as Shares represented by a stock certificate
bearing a legend or legends making appropriate reference to the restrictions on transferability of
such Performance Shares as hereinafter set forth. Until the Performance Period which applies to
the Performance Shares expires, the Performance Shares granted to a Participant which are not
certificated shall be held in the Participant’s name in a bookkeeping account maintained by the
Company and Performance Shares granted to a Participant and represented by a stock certificate
shall continue to bear the legend or legends making reference to the restrictions on
transferability of such Performance Shares as hereinafter set forth.

          Until the Performance Period which applies to an award of Performance Shares has expired, the
Performance Shares shall not be sold, assigned, transferred (other than a transfer to the
Participant’s Beneficiary occurring by reason of the Participant’s death), made subject to gift or
otherwise disposed of, mortgaged, pledged or otherwise encumbered, whether voluntarily or by
operation of law. A separate account shall be maintained for all Performance Shares granted to a
Participant with a Performance Period ending on the same date.

     Except for the restrictions on transferability which apply to Performance Shares, and subject
to the forfeiture provisions applicable under Section 6.10 below, a Participant shall have, with
respect to all Performance Shares so held for his account, all of the rights of a stockholder of
the Company, including full voting rights with respect to such Shares and the right to receive
currently with respect to the Participant’s Performance Shares, all dividends and other
distributions payable generally on the Company’s Shares. If any dividends or distributions so
payable are paid in Shares, the Shares paid as a dividend or distribution with respect to a
Participant’s Performance Shares shall be subject to the same Performance Goals and provisions
relating to forfeiture as apply to the Performance Shares with respect to which they were paid.
Such stock dividend Shares shall themselves be treated as Performance Shares, and shall be credited
to the same account which the Company maintains for those Performance Shares of the Participant
with respect to which such stock dividends or distributions were paid.

     Notwithstanding the foregoing, if the instrument evidencing the grant of any Performance
Shares to a Participant so provides, all cash dividends and distributions payable generally on the
Company’s Shares that are otherwise payable with respect to the Performance Shares granted to the
Participant shall not be paid currently to the Participant but instead, shall be applied to the
purchase of additional Shares for the Participant’s account. The additional Shares so purchased
shall be subject to the same Performance Goals and provisions relating to forfeiture as apply to
the Performance Shares, and shall be credited to the same account which the Company maintains for
those Performance Shares of the Participant with respect to which such dividends or distributions
were paid. The purchase of any such additional Shares shall be made in accordance with such other
procedure as may be specified in the instrument evidencing the grant of the Performance Shares on
which such dividends are paid.

     6.04 Rights While Performance Units Remain Subject to Achievement of Performance
Goals. No Shares shall be issued at the time an Award of Performance Units is made. Except as
provided in the following paragraph or otherwise provided in the instrument evidencing an Award of
Performance Units, a Participant that is the holder of an Award of Performance Units

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shall not have any rights of a shareholder with respect to such Performance Units.
Performance Units granted to a Participant hereunder shall be credited to a bookkeeping account
maintained by the Company for the Participant. A separate account shall be maintained for all
Performance Units granted to a Participant with a Performance Period ending on the same date and
for all Dividend Equivalent Units that are to be credited to such account in accordance with the
following paragraph.

          If any dividends or other distributions payable on the Company’s Shares are paid in Shares
during any period that a Participant holds an Award of Performance Units, as of the applicable
Dividend Payment Date, a number of additional Performance Units shall be credited to each account
established for the Participant to reflect the number of Performance Units held by the Participant
as of such Dividend Payment Date. The number of such additional Performance Units to be credited
shall be determined by first multiplying: (a) the total number of Performance Units
standing to the Participant’s credit in such account on the day immediately preceding such Dividend
Payment Date (including all Dividend Equivalent Units credited to such account on all previous
Dividend Payment Dates); by (b) the per Share dollar amount of the dividend paid on such Dividend
Payment Date; and then, (c) dividing the resulting amount by the Fair Market Value
of one Share on such Dividend Payment Date. Dividend Equivalent Units awarded pursuant to this
paragraph to a Participant that holds an Award of Performance Units shall have the same Performance
Goals and Performance Period as the Performance Units with respect to which such Dividend
Equivalent Units have been awarded.

     6.05 Performance Goals for Covered Executives. In the case of any Award of
Performance Shares or Performance Units to any Eligible Person who is a Covered Executive, the
Performance Goal or Goals established in connection with such Award shall be based on one or more
of the following business criteria, as determined by the Committee in its discretion: (a) the
attainment of specified levels of, or increases in, the Company’s after-tax or pretax return on
stockholder’s equity; (b) the attainment of specified levels in the fair market value of the
Company’s Shares; (c) the attainment of specified levels of growth in the value of an investment in
the Company’s Shares, assuming that all dividends paid on the Company’s Common Stock are reinvested
in additional Shares; (d) the attainment of specified levels of, or increases in, the Company’s
pre-tax or after-tax earnings, profits, net income, or earnings per share; (e) the attainment of
specified levels of, or increases in, the Company’s earnings before income tax, depreciation and
amortization (EBITDA); (f) attainment of specified levels of, or increases in, the Company’s net
sales, gross revenues or cash flow from operations; (g) the attainment of specified levels of, or
increases in, the Company’s working capital, or in its return on capital employed or invested; (h)
the attainment of specified levels of, or decreases in, the Company’s operating costs or any one or
more components thereof, or in the amount of all or any specified portion of the Company’s debt or
other outstanding financial obligations; and (i) such other business performance criteria as may,
from time to time, be established by the Committee in the instrument which contains the Award of
Performance Shares or Performance Units.

     Any of the business criteria described in the preceding paragraph which the Committee
establishes as a Performance Goal may be measured either by the performance of the Company and its
Affiliates on a consolidated basis, or by the performance of any one or more of the Company’s
subsidiaries, divisions, or other business units, as the Committee in its discretion may determine.
In its discretion, the Committee may also establish Performance Goals, based on

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any of the business criteria described in this Section 6.05, that require the attainment of a
specified level of performance of the Company, or any of its subsidiaries, divisions or other
business units, relative to the performance of other specified corporations, in order for such
Performance Goals to be met.

     The Committee may also, in its discretion, include in any Performance Goal the attainment of
which depends on a determination of the net earnings or income of the Company or any of its
subsidiaries, divisions or other business units, provisions which require such determination to be
made by eliminating the effects of any decreases in or charges to earnings for: (a) the effect of
foreign currency exchange rates; (b) any acquisitions, divestitures, discontinuances of business
operations, restructurings or other special charges; (c) the cumulative effect of any accounting
changes; and (d) any “extraordinary items” as determined under generally accepted accounting
principles, to the extent that such decreases or charges referred to in clauses (a) through (d) of
this paragraph are separately disclosed in the Company’s Annual Report for each fiscal year within
the applicable Performance Period.

     6.06 Performance Goals for Non-Covered Executives. In the case of Awards of
Performance Shares or Performance Units made hereunder to Eligible Persons who are not Covered
Executives, the Performance Goal or Goals applicable to such Awards shall be such corporate or
individual goals as the Committee in its discretion may determine.

     6.07 Measurement of Performance. At the end of the Performance Period established in
connection with any Award of Performance Shares or Performance Units, the Committee shall determine
the extent to which the Performance Goal or Goals established for such Award have been met, and
shall determine, on that basis, the number of Performance Shares or Performance Units included in
such Award that have been earned and as to which payment will be made pursuant to Section 6.09
below, subject to the adjustments provide for in Section 6.08 and the forfeiture provisions of
Section 6.10. In the case of any Award granted to a Covered Executive, unless the Committee shall
certify in writing the extent to which it has determined that the Performance Goal or Goals
established by it for such Award have been met, the issuance of Performance Shares to the Covered
Executive shall be subject to Section 162(m) of the Code.

     6.08 Adjustment of Award Amounts. The number of Shares issuable with respect to an
Award on the basis of the level of attainment of the applicable Performance Goals as determined by
the Committee under Section 6.07 shall be subject to adjustment in accordance with the following
provisions:

          (a) To the extent not inconsistent with the terms of the Plan and if the instrument evidencing
the Award so provides, the number of Shares otherwise issuable with respect to an Award to an
Eligible Person who is not a Covered Executive may be increased or decreased to the extent
determined by the Committee in its discretion, based on the Committee’s evaluation of the Eligible
Person’s individual performance or to reflect such other events, circumstances or factors as the
Committee in its discretion deems appropriate in determining the extent to which payment should be
made with respect to the Eligible Person’s Award.

          (b) Notwithstanding the provisions of Section 6.08(a) above, the Committee shall not have any
authority to increase the number of Shares otherwise issuable with respect to any Award of
Performance Shares or Performance Units to a Covered Executive. However, if

19

 

the instrument evidencing an Award to a Covered Executive so provides, the Committee may, in
its discretion, reduce the number of Shares otherwise issuable with respect to such Award: (i) to
reflect any decreases in or charges to earnings that were not taken into account pursuant to clause
(a), (b), (c), or (d) of the last paragraph of Section 6.05 in determining net earnings or income
for purposes of any Performance Goal established in connection with such Award; (ii) to reflect any
credits to earnings for extraordinary items of income or gain that were taken into account in
determining net earnings or income for such purposes; (iii) to reflect the Committee’s evaluation
of the Covered Executive’s individual performance; or (iv) to reflect any other events,
circumstances or factors which the Committee believes to be appropriate in determining the extent
to which payment should be made with respect to the Covered Executive’s Award.

     6.09 Payment of Awards. Payment with respect to that number of Performance Shares or
Performance Units subject to any Award which the Committee has determined under Section 6.07 above
to have been earned, as adjusted to the extent determined by the Committee under Section 6.08,
shall be made in accordance with the following provisions:

          (a) In the case of any such Performance Shares, payment shall be made by the issuance and
delivery to the Participant of a stock certificate for the requisite number of such Shares free of
the legends making reference to restrictions on transferability of the Performance Shares provided
for by this Plan. However, if the Performance Shares with respect to which payment is to be made
include a fractional Share, payment of such fractional Share shall be made in cash, in an amount
equal to the Fair Market Value of such fractional Share determined as of the end of the Performance
Period. Such Shares shall be issued and delivered, and, if applicable, such cash payment shall be
made, to the Participant as soon as practicable after the end of the Performance Period applicable
to the Award in question.

          (b) In the case of Performance Units, (including related Dividend Equivalent Units), payment
shall be made: (i) by the issuance and delivery to the Participant of a stock certificate for a
number of Shares equal to the total number of such whole Performance Units and related Dividend
Equivalent Units; and (ii) by payment in cash for any fractional Unit in an amount equal to the
Fair Market Value of such fractional Unit determined as of the day immediately preceding the date
as of which payment is to be made. Notwithstanding the foregoing, payment for such Performance
Units (including related Dividend Equivalent Units) may be made wholly or partly in cash, in an
amount equal to the Fair Market Value of all of the Units and any fractional Unit as to which a
cash payment is to be made, if the instrument evidencing the grant of such Performance Units so
provides. Payment shall be made in such manner and at such time or times as provided in such
instrument. Unless otherwise provided by the instrument evidencing the grant of Performance Units,
payment with respect to any part or all of a Participant’s Performance Units (including any related
Dividend Equivalent Units) may be deferred, at the Participant’s election, upon such terms and
conditions as are specified by the Participant, in writing, subject to the restrictions on deferral
of compensation contained in Code Section 409A.

     6.10 Termination of Service. Except as the instrument evidencing the grant of
Performance Shares or Performance Units may otherwise provide, upon an Eligible Person’s
Termination of Service for any reason prior to the end of the Performance Period established for
any Award of Performance Shares or Performance Units, such Award shall be cancelled, all
Performance Shares or Performance Units included in such Award, and all Dividend Equivalent

20

 

Units that were credited with respect to such Performance Shares or Performance Units, shall
be forfeited, and no payment of any kind shall be made with respect to such Award.

     Notwithstanding the foregoing, if the Committee so determines, in its discretion, the
instrument evidencing any such Award may provide that if the Eligible Person’s Termination of
Service occurs prior to the end of the Performance Period established for such Award as a result of
the Eligible Person’s death, Disability or Retirement (but not for any other reason), payment will
be made at the end of the Performance Period, in accordance with the provisions of Section 6.09,
with respect to all or a Pro Rata Portion of the number of Shares and/or the amount of cash that
otherwise would have been payable to the Eligible Person, as determined in accordance with the
provisions of Sections 6.07 and 6.08, if the Eligible Person’s Termination of Service had not
occurred prior to the end of such Performance Period. In such case, only the Eligible Person’s
right to receive payment with respect to any remaining portion of the Performance Shares or
Performance Units (and related Dividend Equivalent Units) included in such Award shall be cancelled
and forfeited.

     Notwithstanding the provisions of Section 6.03 above and notwithstanding the absence of the
provisions of this paragraph from provisions of any instrument containing the provisions of an
Award issued prior to the effective date of this Amendment and Restatement, if an Eligible Person’s
Termination of Service occurs, for any reason, prior to the expiration of the Performance Period
which is in effect for an Award of Performance Shares, the Eligible Person shall, upon such
Termination of Service, be deemed to forfeit his right to all cash dividends received with respect
to the portion of the Performance Shares previously awarded to such Eligible Person with respect to
which the Restrictions have not lapsed. In connection with the forfeiture by an Eligible Person of
the cash dividends received by the Eligible Person with respect to the Performance Shares
previously awarded to the Eligible Person with respect to which the Restrictions have not lapsed,
the Eligible Person shall be obligated to pay to the Company, no later than thirty (30) days
following such Eligible Person’s Termination of Service, the amount of the dividends received by
such Eligible Person which is deemed to be forfeited pursuant to the provision of the preceding
sentence. In connection with the foregoing, if, pursuant to the provisions of the preceding
paragraph, the Committee has provided in the instrument evidencing the Award of Performance Shares
that the Eligible Person shall have the right to receive payment for Performance Shares awarded to
the Eligible Person if the Eligible Person’s Termination of Service occurs prior to the end of the
Performance Period established for such Performance Shares as a result of the Eligible Person’s
death, Disability or Retirement (but not for any other reason), the Eligible Person will not
forfeit his right to all cash dividends received with respect to the portion of Performance Shares
as to which the Restrictions have not lapsed and that such Eligible Person shall be entitled to
retain all or a portion of such cash dividends.

     6.11 Notice of Code Section 83(b) Election. A Participant who files an election under
Section 83(b) of the Code to include in gross income the Fair Market Value of any Performance
Shares granted hereunder while such Shares are still subject to achievement of Performance Goals
shall furnish the Company with a copy of the election so filed by the Participant within ten (10)
days of the filing of such election with the Internal Revenue Service.

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ARTICLE 7.

RIGHTS

     7.01 Awards of Rights. (a) Subject to the limitations set forth in Article 3 above
and to the other terms and conditions of the Plan, Rights may be granted under the Plan to any
Eligible Person at such times and upon such terms and conditions as the Committee, in its
discretion may determine. Rights shall be granted in accordance with the provisions of this
Article 7.

          (b) The terms of the instrument which contains the terms of an Award of Rights shall specify
the number of Shares which shall be used as the basis for determining the value of the Rights at
the end of the Appreciation Period and the Base Price in effect for those Shares.

          (c) Rights shall be exercisable at such time and upon such terms as may be established by the
Committee in the instrument setting forth the terms of the Award; provided that, in no event shall
the period of time that an Award of Rights is exercisable extend beyond the ten (10) year period
beginning on the Date of Grant.

          (d) Rights shall be subject to the same transferability restrictions applicable to all Awards
and may not be transferred during the holder’s lifetime, except to one or more family members as
provided in Section 8.02.

          (e) The holder of a Right shall not have any stockholder rights with respect to the Shares
used to determine the value of the Right.

     7.02 Dividend Equivalent Units. If any dividends or other distributions payable on
the Company’s Shares are paid in Shares during any period that a Participant holds an Award of
Rights, as of the applicable Dividend Payment Date, a number of additional Rights shall be credited
to any account established for the Participant to reflect the number of Rights held by the
Participant as of such Dividend Payment Date. The number of such additional Rights to be credited
shall be determined by first multiplying: (a) the total number of Rights standing to the
Participant’s credit in such account on the day immediately preceding such Dividend Payment Date
(including all Dividend Equivalent Units credited to such account on all previous Dividend Payment
Dates); by (b) the per share dollar amount of the dividend paid on such Dividend Payment Date; and
then (c) dividing the resulting amount by the Fair Market Value of one Share on such
Dividend Payment Date. Additional Rights awarded pursuant to this Section to a Participant that
holds an Award of Rights shall be exercisable at the same time and upon the same terms as the
Rights with respect to which such additional Rights are to be issued; provided that, the Base Price
of such rights shall be equal to the Fair Market Value of a Share, determined as of the applicable
Dividend Payment Date.

     7.03 Termination of Service. Except as the instrument evidencing the grant of an
Award of Rights may otherwise provide, upon an Eligible Person’s Termination of Service for any
reason prior to the expiration of the Appreciation Period which is in effect for any Right (and
related Dividend Equivalent Units) standing to his or her credit immediately prior to such
Termination of Service, the Eligible Person’s right to exercise such Right shall be forfeited and
cancelled as of the date of such Termination of Service, and no payment of any kind shall be

22

 

made with respect to such Right and related Dividend Equivalent Units.

          Notwithstanding the foregoing, if the Committee so determines, in its discretion, the
instrument evidencing the Award of such Right may provide that if the Eligible Person’s Termination
of Service occurs prior to the end of the Appreciation Period established for such Right as a
result of the Eligible Person’s death, Disability or Retirement (but not for any other reason),
payment will be made with respect to all or a Pro Rata Portion of such Right and any related
Dividend Equivalent Units. In such case, only the Eligible Person’s right to receive payment with
respect to any remaining portion of the Right (and related Dividend Equivalent Units) for which
such Appreciation Period was established shall be cancelled and forfeited. Any payment required to
be made with respect to an Eligible Person’s Right (and related Dividend Equivalent Units) pursuant
to this paragraph shall be made as soon as practicable after the date of such person’s Termination
of Service, and shall be made in the manner specified in Section 7.04.

     7.04 Payment of Awards. In the case of Rights, (including related Dividend Equivalent
Units), payment shall be made: (a) by the issuance and delivery to the Participant of a stock
certificate for a number of Shares having a Fair Market Value on the date the Rights are exercised
equal to: (i) the aggregate Fair Market Value of the Shares used as the basis for determining the
value of the Rights being exercised, determined as of the date the Rights are exercised; minus (ii)
the aggregate Base Price in effect for the Rights being exercised; and (b) by payment in cash for
any fractional Shares which would be issued using the formula contained in (a) above. Issuance of
certificates for Shares shall be made in such manner and at such time or times as provided in such
instrument. Unless otherwise provided by the instrument evidencing the grant of Rights, issuance
of certificates for Shares with respect to any part or all of a Participant’s Rights (including any
related Dividend Equivalent Units) may be deferred, at the Participant’s election, upon such terms
and conditions as are specified by the Participant, in writing, subject to the restrictions on
deferral of compensation contained in Code Section 409A.

ARTICLE 8.

TRANSFERABILITY OF AWARDS

     8.01 Restrictions on Transfers. Except as otherwise provided by Section 8.02 below:
(a) any Option granted to an Eligible Person under the Plan shall be nontransferable and may be
exercised during the Eligible Person’s lifetime only by the Eligible Person; (b) any Restricted
Shares, Restricted Units, Performance Shares, Performance Units and Rights granted to an Eligible
Person under the Plan shall not be transferrable by the Eligible Person during his or her lifetime;
and (c) a Participant’s right to receive payment of Shares or cash with respect to any Award
granted to the Participant under the Plan shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by
creditors of the Participant.

     8.02 Permitted Transfers. Notwithstanding the provisions of Section 8.01 above, if
the instrument evidencing the grant of any Award other than an Incentive Stock Option so provides,
the recipient of such Award may transfer his or her rights with respect to such Award, or any
portion thereof, to any “family member” of the recipient, as that term is defined in the General
Instructions to Form S-8 promulgated by the Securities and Exchange Commission under the
Securities Act of 1933, as amended, subject to such limitations, terms and conditions as may
be specified in such instrument.

23

 

ARTICLE 9.

EFFECTS OF CHANGE IN CONTROL

     9.01 Change in Control. Notwithstanding any other provision in the Plan to the
contrary, except as otherwise provided in the Merger Sale Agreement entered into by the Company in
connection with a Change in Control, upon the occurrence of a Change in Control, the following
provisions shall apply:

          (a) Each Option outstanding on the day immediately preceding the date on which the Change in
Control occurs shall be converted to a right to receive an Option Cash Out Payment. Payment of the
Option Cash Out Payment shall be made to the holder of the Option in one lump sum payment, less
applicable withholding taxes, on the date on which the Change in Control occurs.

          (b) Each Right outstanding on the day immediately preceding the date on which the Change in
Control occurs shall be converted to a right to receive the Right Cash Out Payment. Payment of the
Right Cash Out Payment shall be made to the holder of the Right in one lump sum payment, less
applicable withholding taxes, on the date on which the Change in Control occurs.

          (c) The Restricted Periods applicable to all Restricted Shares and Restricted Units (including
any related Dividend Equivalent Units) granted to a Participant hereunder that are still
outstanding on the day immediately preceding the date on which such Change in Control occurs shall
expire on such date; all Restrictions applicable to such outstanding Restricted Shares, Restricted
Units and related Dividend Equivalent Units shall lapse on such date; and the Participant’s rights
to receive delivery or payment with respect to all such outstanding Restricted Shares, Restricted
Units and related Dividend Equivalent Units shall become nonforfeitable as of such date. Payment
with respect to such outstanding Restricted Shares, Restricted Units and related Dividend
Equivalent Units shall be made on the date the Change in Control occurs. Unless the Committee
determines that payment with respect to Restricted Shares and Restricted Units is to be made in the
form of a cash payment instead of the issuance and delivery of Shares, the Company shall take
whatever steps are necessary to cause all such Restricted Shares and Shares attributable to
Restricted Units to be issued to the applicable Participants, and to be treated as outstanding, as
of the date the Change in Control occurs.

          (d) The Performance Periods applicable to all Performance Shares and Performance Units
(including any related Dividend Equivalent Units) granted to a Participant hereunder that are still
outstanding on the day immediately preceding the date on which such Change in Control occurs shall
end on such date; all Performance Goals that were established in connection with the Award of such
Performance Shares or Performance Units shall be deemed to have been satisfied in full as of such
date; the number of Performance Shares or the percentage of the Performance Units as to which
payment is to be made in the event the Performance Goal or Goals applicable to the Award of such
Shares or Units are met at the targeted level of performance, as specified in the instrument
evidencing the grant of such Award, shall be deemed
to be earned in full as of such date; and the Participant shall acquire on such date a
nonforfeitable right to receive payment with respect to such number of Performance Shares
(including any cash payment for dividends payable thereon, if the instrument evidencing the grant
of such shares

24

 

provides for such cash payment), or with respect to such percentage of the
Performance Units (and any related Dividend Equivalent Units), determined without any adjustment
under Section 6.09(a) or (b). Payment with respect to such Performance Shares, Performance Units
and related Dividend Equivalent Units shall be made on the date the Change in Control occurs.
Unless the Committee determines that payment with respect to such Performance Shares and
Performance Units is to be made in the form of a cash payment instead of by the issuance and
delivery of Shares, the Company shall take whatever steps are necessary to cause all such
Performance Shares and Shares attributable to Performance Units to be issued to the applicable
Participants, and to be treated as outstanding, as of the date the Change in Control occurs.

     9.02 Substitution of New Awards. Notwithstanding the provisions of Section 9.01, if
provided for by a Merger Sale Agreement entered into in connection with a Change in Control, the
rights of Participants under any Awards outstanding on the day immediately preceding the Change in
Control shall be honored or assumed or new rights issued therefor by the entity which survives the
Change in Control (each such honored, assumed or substituted option being hereinafter an
“Alternative Award”); provided that, any such Alternative Award satisfies the following criteria:

          (a) the Alternative Award must be based on stock which is traded on an established securities
market, or which will be so traded within thirty (30) days of the Change in Control;

          (b) the Alternative Award must provide the Participant with rights and entitlements
substantially equivalent to or better than the rights, terms and conditions applicable under such
Award, including, but not limited to, an identical or better exercise schedule; and

          (c) the Alternative Award must have economic value substantially equivalent to the value of
such Award (determined at the time of the Change in Control).

ARTICLE 10.

COMPLIANCE WITH CODE SECTION 409A

     10.01 In General.  This Article 10 is intended to comply with final regulations
promulgated under Code Section 409A. It is effective January 1, 2009 and shall govern
notwithstanding any contrary provision elsewhere in the Plan or in any instrument pursuant to which
an Award is granted under the Plan (an “Award Instrument”).

     10.02 409A Excluded Stock Rights. All Non-Qualified Stock Options and Rights awarded
under the Plan are intended not to provide for the deferral of compensation, in accordance with
Treas. Reg. §1.409A-1(b)(5)(i)(A) and (B) (said Awards are hereinafter referred to as “409A
Excluded Stock Rights”), except where an Award Instrument states explicitly that the Award is
intended to provide for a deferral of compensation (such Award is hereinafter referred to as a
“409A Non-Excluded Stock Right”). Accordingly, the Plan shall be construed,
and may be amended, in such manner as will ensure that 409A Excluded Stock Rights remain
excluded from the application of Code Section 409A. Without limiting the generality of the
foregoing:

25

 

          (a) no 409A Excluded Stock Right shall be awarded with an exercise price that is less than the
Fair Market Value of the Common Stock on the Date of Grant where Fair Market Value is determined in
a manner permitted under Treas. Reg. §1.409A-1(b)(5)(iv);

          (b) no 409A Excluded Stock Right shall be modified, extended or exchanged for a new Award if
such modification, extension or exchange would cause the 409A Excluded Stock Right to become (or be
replaced by) a 409A Non-Excluded Stock Right or other Award that is subject to Code Section 409A;

          (c) a 409A Excluded Stock Right shall expire no later than its original expiration date and,
if a Excluded Stock Right would expire after its original expiration date, because the Participant
has died or otherwise become unable to exercise the Stock Right due to a mental or physical
disability, the Stock Right shall be deemed exercised by the owner thereof on the day preceding its
original expiration date if the then Fair Market Value of the Common Stock exceeds the exercise
price;

          (d) any extension of a 409A Excluded Stock Right, whether pursuant to a provision of the Plan
or an exercise of Committee discretion, shall not extend the term of the Award beyond the earlier
of (i) the original expiration date stated in the Award Instrument, or (ii) the tenth anniversary
of the Award;

          (e) no 409A Excluded Stock Right shall permit the deferral of compensation beyond the date of
exercise;

          (f) no dividends shall be paid or credited on a 409A Excluded Stock Right that would have the
effect of reducing the exercise price of the 409A Excluded Stock Right below Fair Market Value of
the Common Stock on the Date of Grant in violation of Code Section 409A and the Treas. Reg.
§1.409A-1(b)(5)(i)(E); and

          (g) any Common Stock, cash or other consideration to be transferred to the Participant in
connection with the exercise of the 409A Excluded Stock Right shall be transferred as soon as
practicable and in all events within 30 days following the exercise date and the Participant shall
have no right to determine the calendar year in which such transfer occurs.

     10.03 409A Non-Excluded Stock Rights. If an Award Instrument states explicitly that
the Non-Qualified Stock Option or the Right granted thereunder is intended to provide for a
deferral of compensation in accordance with Treas. Reg. §1.409A-1(b)(5)(i)(C) (such Award is
hereinafter referred to as “409A Non-Excluded Stock Right”), the Award Instrument shall be deemed
to incorporate the terms and conditions necessary to avoid inclusion of the Award in the
Participant’s gross income pursuant to Section 409A(a)(1) of the Code and the Plan and Award
Instrument shall be interpreted in accordance with Section 409A of the Code and the regulations and
other interpretive guidance issued thereunder so as to avoid the inclusion of the Award in
gross income pursuant to Section 409A(a)(1) of the Code. Without limiting the generality of
the foregoing:

26

 

          (a) the Award Instrument shall specify that the 409A Non-Excluded Stock Right will expire on
the last day of the calendar year in which the 409A Non-Excluded Stock Right becomes exercisable,
and that any Common Stock, cash or other consideration to be transferred to the Participant in
connection with the exercise of the 409A Non-Excluded Stock Right shall be transferred to the
Participant on or before March 15 of the calendar year following the calendar year in which the
409A Non-Excluded Stock Right becomes exercisable;

          (b) the date on which the 409A Non-Excluded Stock Right becomes exercisable may not be
accelerated except as may be permitted under Treas. Reg. §1.409A-3(j); and

          (c) in the case of a 409A Non-Excluded Stock Right that becomes exercisable as a result of the
separation from service of a Participant who is a “specified employee” within the meaning of Treas.
Reg. §1.409A-1(i) as applied by the Company, no Common Stock, cash or other consideration shall be
transferred to the Participant in connection with the exercise of the 409A Non-Excluded Stock Right
until the day following the 6-month anniversary of the Participant’s separation from service.

     10.04 409A Excluded Current Property Transfers. Restricted Shares and Performance
Shares (“Current Property Transfers”) awarded under the Plan are intended not to provide for the
deferral of compensation, in accordance with Treas. Reg. §1.409A-1(b)(6) (said Awards are
hereinafter referred to as “409A Excluded Current Property Transfers”), unless the Award Instrument
states explicitly that the Award is intended to provide for a deferral of compensation (such an
Award is hereinafter referred to as “409A Non-excluded Current Property Transfer”). Accordingly,
the Plan shall be construed, and may be amended, to ensure that 409A Excluded Current Property
Transfers remain excluded from the application of Code Section 409A. Without limiting the
generality of the foregoing, no Award Instrument shall provide for or permit the deferral of
compensation resulting from a 409A Excluded Current Property Transfer beyond the date on which the
409A Excluded Current Property Transfer would otherwise become includable in gross income in
accordance with the rules of Code Section 83 (or would have become includable but for the exercise
of an election under Code Section 83(b)).

     10.05 409A Non-Excluded Current Property Transfers. If, under the terms of an Award
Instrument, a Current Property Transfer would be deemed to be a deferral of compensation under
Section 409A of the Code (such Award is hereinafter referred to as “409A Non-Excluded Current
Property Transfer”), the Award Instrument shall be deemed to incorporate the terms and conditions
necessary to avoid inclusion of the Award in the Participant’s gross income pursuant to Section
409A(a)(1) of the Code and the Plan and Award Instrument shall be interpreted in accordance with
Section 409A of the Code and the regulations and other interpretive guidance issued thereunder so
as to avoid the inclusion of the Award in gross income pursuant to Section 409A(a)(1) of the Code.
Without limiting the generality of the foregoing:

          (a) the Award Instrument shall specify one or more dates or events permitted under Code
Section 409A(a)(2)(A) at which time the Award will be settled in cash or vested property;

27

 

          (b) the Award Instrument shall specify the manner in which the Award will be paid (e.g., lump
sum or installments) and the dates on or periods within which payment will occur;

          (c) the date of settlement of the Award shall not be accelerated except as otherwise permitted
under Treas. Reg. §1.409A-3(j); and

          (d) in the case of a 409A Non-excluded Current Property Transfer that becomes payable as a
result of the separation from service of a Participant who is a “specified employee” within the
meaning of Treas. Reg. §1.409A-1(i) as applied by the Company, no cash or property shall be paid to
the Participant in connection with the settlement of the Award until the day following the 6-month
anniversary of the Participant’s separation from service.

     10.06 409A Excluded Future Property Transfers. Any Awards permitted under the Plan
other than those referred to in Sections 10.02, 10.03, 10.04 and 10.05 including, but not limited
to, Restricted Units and Performance Units (“Future Property Transfers”), are intended not to
provide for the deferral of compensation, in accordance with the short-term deferral rule set forth
in Treas. Reg. §1.409A-1(b)(4) (said Awards are hereinafter referred to as “409A Excluded Future
Property Transfers”) unless the terms of the Award Instrument, the Future Property Transfer would
be deemed to result in a deferral of compensation under Section 409A of the Code (such an Award is
hereinafter referred to as a “409A Non-excluded Future Property Transfer”). Accordingly, the Plan
shall be construed, and may be amended, to ensure that 409A Excluded Future Property Transfers
remain excluded from the application of Code Section 409A. Without limiting the generality of the
foregoing, the Award Instrument shall provide (or shall be construed to provide) that a 409A
Excluded Future Property Transfer must be settled in cash or vested property on or before March 15
of the calendar year following the calendar year in which the 409A Excluded Future Property
Transfer ceased to be subject to a substantial risk of forfeiture within the meaning of Treas. Reg.
§1.409A-1(b)(4).

     10.07 409A Non-excluded Future Property Transfers. If, under the terms of an Award
Instrument, a Future Property Transfer would be deemed to result in a deferral of compensation in
accordance with Treas. Reg. §1.409A-1(b)(4) (“409A Non-excluded Future Property Transfer”), the
Award Instrument shall be deemed to incorporate the terms and conditions necessary to avoid
inclusion of the Award in the Participant’s gross income pursuant to Section 409A(a)(1) of the Code
and the Plan and Award Instrument shall be interpreted in accordance with Section 409A of the Code
and the regulations and other interpretive guidance issued thereunder so as to avoid the inclusion
of the Award in gross income pursuant to Section 409A(a)(1) of the Code. Without limiting the
generality of the foregoing:

          (a) the Award Instrument shall specify one or more dates or events permitted under Code
Section 409A(a)(2)(A) at which time the Award will be settled in cash or vested property;

          (b) the Award Instrument shall specify the manner in which the Award will be paid (e.g., lump
sum or installments) and the dates on or periods within which payment will occur;

28

 

          (c) the date of settlement of the Award shall not be accelerated except as otherwise permitted
under Treas. Reg. §1.409A-3(j); and

          (d) in the case of a 409A Non-excluded Future Property Transfer that becomes payable as a
result of the separation from service of a Participant who is a “specified employee” within the
meaning of Treas. Reg. §1.409A-1(i) as applied by the Company, no cash or property shall be paid to
the Participant in connection with the settlement of the Award until the day following the 6-month
anniversary of the Participant’s separation from service.

     10.08 Authority To Amend Plan And/Or Award Instrument. Notwithstanding any provision
of the Plan to the contrary, in the event that the Committee determines that any Award may be
subject to Section 409A of the Code and related Department of Treasury guidance (including such
Department of Treasury guidance as may be issued after the date of this Plan amendment), the
Committee may adopt such amendments to the Plan and/or the applicable Award Instrument as the
Committee determines are necessary or appropriate to (1) exempt the Award from Section 409A of the
Code and/or preserve the intended tax treatment of the benefits provided with respect to the
Award, or (2) comply with the requirements of Section 409A of the Code and related Department of
Treasury guidance.

     10.09 Protection of the Committee and Others. Notwithstanding the foregoing
provisions of this Article 10, neither the Company, nor any officer, employee, director or agent of
the Company or any affiliate of the Company, nor any member of the Committee, shall have any
liability to any Participant on account of an Award hereunder being taxable under Code Section 409A
regardless of whether such person could have taken action to prevent such result and failed to do
so. To the extent permitted by law, the Company shall indemnify and defend any officer, employee,
director or agent of the Company or of any affiliate of the Company, and any member of the
Committee, from any claim based on an Award becoming taxable under Code Section 409A resulting from
such person’s action taken, or action failed to be taken, in connection with the Plan or any Award
Instrument.

ARTICLE 11.

ADMINISTRATION

     11.01 Administration of the Plan. (a)  Except as otherwise specifically provided in the
Plan, the Plan shall be administered by: (i) the Board of Directors, with respect to all matters
pertaining to Awards that may be granted or that have been granted hereunder to any Director that
is an Eligible Person; (ii) by the Compensation Committee, with respect to all matters pertaining
to Awards that may be made or that have been made to Employees, except as otherwise provided in
(iii); and (iii) by the Compensation Administration Committee, with respect to those specific
matters pertaining to Awards to Employees who are not Executive Officers that are within the scope
of the authority granted to the Compensation Administration Committee under Section 11.04 below or
delegated
by the Compensation Committee to the Compensation Administration Committee pursuant to Section
11.05 below.

          (b) No Covered Individual shall be liable for any action or determination made in good faith
with respect to the Plan or any Award granted under the Plan. The Company

29

 

shall, to the maximum
extent permitted by applicable law and the Certificate of Incorporation and By-laws of the Company,
indemnify and hold each Covered Individual harmless from and against any loss, cost or expense
(including reasonable attorney fees) or liability (including any amount paid in settlement of a
claim with the approval of the Company) arising out of any act or omission to act in connection
with the Plan or any Award granted pursuant to the Plan. Such indemnification shall be in addition
to any rights of indemnification such individuals may have under applicable law or under the
Certificate of Incorporation and By-laws of the Company.

     11.02 The Committee’s Power and Authority. In addition to the responsibilities and
powers assigned to the Committee elsewhere in the Plan, the Committee shall have the authority, in
its discretion, to establish, from time to time, guidelines or regulations for the administration
of the Plan, to interpret the Plan, and to make all determinations it considers necessary or
advisable for the administration of the Plan. All decisions, actions or interpretations of the
Committee under the Plan shall be final, conclusive and binding upon all parties.

          The Committee may designate Employees of the Company and professional advisors to assist the
Committee in its administration of the Plan and may grant authority to Employees of the Company to
execute agreements or other documents on behalf of the Committee in connection with the
administration of the Plan. The Committee may employ such legal counsel, consultants and agents as
it may deem desirable for the administration of the Plan and may rely upon any advice and any
computation received from any such counsel, consultant or agent. The Company shall pay all
expenses and costs incurred by the Committee for the engagement of any such counsel, consultant or
agent.

     11.03 Modification of Awards. (a) To the extent not inconsistent with the terms of the
Plan or any provision of applicable law (including, but limited to Code Section 409A), the
Committee, in its discretion, may waive or modify any of the terms and conditions set forth in the
instrument evidencing the grant of any Award made to a Participant hereunder, including without
limitation: (i) in the case of any Option, to permit such Option to become exercisable as to any
portion of the Shares subject to the Option at any time earlier than the time specified in such
instrument, to extend the term of such Option beyond the date specified in such instrument as the
expiration date for the term of the Option (but not beyond the day immediately preceding the tenth
anniversary of the Date of Grant of the Option), or to permit such Option, to the extent it has
become or becomes exercisable, to remain exercisable for any period of time (including any period
after the Eligible Person’s Termination of Service for any reason) beyond the period of time
specified in such instrument but not beyond the date of expiration of the Option, including any
extension thereof permitted under this clause (a); (ii) in the case of any Award of Restricted
Shares or Restricted Units, to cause the Restricted Period applicable to such Restricted Shares or
Restricted Units (including any related Dividend Equivalent Units) to expire, and the Restrictions
applicable to such Restricted Shares or Restricted Units to lapse, as of any date earlier than the
date provided for in such instrument; (iii) in the case of any Award of
Performance Shares or Performance Units (including any related Dividend Equivalent Units), to
cause the Performance Period applicable to such Performance Shares or Performance Units to expire
and to treat the Performance Goal or Goals established with respect to such Performance Shares or
Performance Units as having been met, in full or in part; and (iv) in the case of any Award of
Rights (including any related Dividend Equivalent Units), to cause the Appreciation

30

 

Period
applicable to such Rights to expire as of any date earlier than the date provided for in such
instrument.

          (b) Notwithstanding the foregoing, no waiver or amendment may be authorized or directed by the
Committee pursuant to this Section 11.03 without the consent of the Participant if: (i) it would
adversely affect, to any material extent, any of the rights or obligations of the Participant with
respect to such Award; or (ii) in the case of any Option granted hereunder that was intended to
constitute an Incentive Stock Option, if such waiver or amendment would cause such Option to fail
to be treated as an “incentive stock option” within the meaning of Section 422 of the Code. In
addition, no such waiver or amendment may be authorized or directed by the Committee pursuant to
this Section 11.03 with respect to any Option, Restricted Shares or Restricted Units, Performance
Shares or Performance Units or Rights awarded to any Covered Executive, if such waiver or amendment
would cause the delivery of Shares or the payment of any cash amounts that are made with respect to
such Award to fail to be deductible for federal income tax purposes pursuant to the applicable
provisions of Section 162(m) of the Code and the regulations issued thereunder.

     11.04  Power and Authority of the Compensation Administration Committee. With respect
to such number of Shares as the Compensation Committee may in its discretion determine to be
available from time to time for the grant of Awards in any form to Employees who are not Executive
Officers, the Compensation Administration Committee shall have the authority: (a) to determine
which of such Employees shall receive Awards in each form; (b) to determine the time or times when
Awards in such form shall be made to such Eligible Employees; (c) to determine the number of Shares
that will be subject to any Option, or the number of Restricted Shares, Restricted Units,
Performance Shares, Performance Units or Rights, to be included in any Award to any such Employee;
(d) with respect to any Award of Performance Shares or Performance Units made to any such
Employees, to make all determinations which the Committee is authorized to make with respect to
such Award under the provisions of Section 6.02, Section 6.07 and Section 6.09(a); and (e) with
respect to any Awards made to any such Employees pursuant to the Compensation Administration
Committee’s exercise of the authority granted to it under this Section 11.04, to exercise all of
the authority and powers granted to the Committee under Section 11.02 above and under the second
paragraph of Section 11.05 below, but only to the extent that any such exercise by the Compensation
Administration Committee is not inconsistent with any action taken by the Compensation Committee,
or with any determination, decision or interpretation of the Plan made by the Compensation
Committee, under Section 11.02 above or any delegation made by the Compensation Committee under the
second paragraph of Section 11.05 below.

     Except for the matters specified in the foregoing paragraph and any additional matters
pertaining to Awards to Employees who are not Executive Officers with respect to which authority
has been granted to the Compensation Administration Committee pursuant to this Section 11.04, the
Compensation Administration Committee shall not have any of the authority
or powers otherwise granted to the Compensation Committee under any other provisions of the Plan.

     The Compensation Committee in its discretion may at any time, by resolution duly adopted by it
and without any amendment of the Plan, revoke or modify in any manner or respect

31

 

the authority and
powers granted to the Compensation Administration Committee under this Section 11.04.

     11.05 Delegation. In addition to the authority and powers granted to the Compensation
Administration Committee under Section 11.04 above, the Compensation Committee in its discretion
may, by resolution duly adopted by it, delegate to the Compensation Administration Committee
authority with respect to such other matters pertaining to Awards to Employees who are not
Executive Officers as the Compensation Committee may specify in such resolution. Any authority so
delegated to the Compensation Administration Committee may be revoked or modified by the
Compensation Committee, in whole or in part, at any time.

     The Committee may delegate any ministerial or nondiscretionary function pertaining to the
administration of the Plan to any one or more officers or other employees of the Company or any of
its Affiliates.

     11.06 Non-U.S. Participants. In order to comply with any applicable provisions of
local law and regulations in any foreign country in which the Company or any of its Affiliates
operates, the Committee may in its sole discretion: (a) modify the terms and conditions of Awards
granted under the Plan to Eligible Persons located in such foreign country; (b) establish subplans
with such modifications to the terms of the Plan as it determines to be necessary or appropriate
under the circumstances applicable in such foreign country; or (c) take any other action that it
deems necessary or appropriate in order to comply with, or obtain any exemptions from the
applicability of, the local laws and regulations in such foreign country.

     11.07 Designation and Change of Beneficiary. Each Participant shall file with the
Committee, or with such Employee of the Company who has been designated by the Committee to receive
same, a written designation of one or more persons as the Beneficiary who shall be entitled to
receive any Shares or cash amount payable with respect to any Award upon or after the Participant’s
death. A Participant may, from time to time, revoke or change his or her Beneficiary designation
without the consent of any previously designated Beneficiary by filing a new designation with the
Committee or its designee. The last such designation received by the Committee or its designee
shall be controlling; provided, however, that no designation, or change or revocation thereof,
shall be effective unless received by the Committee prior to the Participant’s death, and in no
event shall it be effective as of a date prior to such receipt. If at the date of a Participant’s
death, there is no designation of a Beneficiary in effect for the Participant pursuant to the
provisions of this Section 11.07, or if no Beneficiary designated by the Participant in accordance
with the provisions hereof survives to receive any Shares or cash amount payable under the Plan
with respect to the Participant after his or death, the Participant’s estate shall be treated as
the Participant’s Beneficiary for purposes of the Plan.

     11.08 Taxes. Notwithstanding any other provision of the Plan, the Company and each of
its Affiliates may make such provisions and take such steps as it may deem necessary or
appropriate for the withholding of all federal, state and local taxes required by law to be
withheld with respect to the exercise of any Option or with respect any payments to be made in
respect of any other form of Award granted to a Participant under the Plan, including but not
limited to: (a) deducting the amount of taxes so required to be withheld from any other
compensation or other amounts then or thereafter payable to the Participant, and/or (b) withholding
delivery of

32

 

any Shares or payment of any cash amount otherwise required to be delivered or paid to
the Participant with respect to the exercise of such Option, or with respect to such other form of
Award, until the amount of taxes so required to be withheld has been paid in full to the Company or
any of its Affiliated Companies. With the approval of the Compensation Committee and subject to
such terms and conditions as it may require, such amount may be paid in Shares previously owned by
the Participant, or by the surrender of a portion of the Shares that otherwise would be delivered
or paid to such Participant with respect to his or her Award, or by a combination of payments in
cash and Shares.

     11.09 Amendment or Termination. The Board of Directors may, with prospective or
retroactive effect, amend, suspend or terminate the Plan or any portion thereof at any time;
provided, however, that: (a) no amendment, suspension or termination of the Plan shall, without the
Participant’s written consent, adversely affect the rights of any Participant with respect to any
Awards previously granted to the Participant; and (b) no amendment which constitutes a “material
revision” of the Plan, as the term material revision is defined in the applicable NASDAQ rules,
shall be effective unless approved by the stockholders of the Company in the manner required by
such rules and by applicable law.

     11.10 Participant Rights Unsecured. A Participant shall have the status of a general
unsecured creditor of the Company with respect to his or her right to receive any cash payment
provided for by the instrument containing the terms of any Award made pursuant to the Plan. The
Plan and the instrument containing the terms of any Award providing for the payment of cash shall
constitute a mere promise by the Company to make payments in the future of the benefits provided
for therein. It is intended that the arrangements reflected in the Plan be treated as unfunded for
tax purposes, as well as for purposes of any applicable provisions of Title I of ERISA.

     11.11 Terms of Employment Not Affected. Neither the Plan nor any Award granted to a
Participant hereunder or any other action taken in connection with the Plan shall be construed as
giving any Participant any right to be retained in the employment of the Company or any of its
Affiliates. In addition, the Plan, any Award granted to a Participant hereunder and any other
action taken by the Committee pursuant to the Plan shall not be deemed or construed to interfere
with the right of the Company or any of its Affiliates to terminate a Participant’s employment or
service at any time subject, however, to the Participant’s rights under any employment contract in
effect between the Participant and the Company or any of its Affiliates.

     No Award made to a Participant under the Plan, and no payment made with respect to such Award,
shall be considered as compensation or wages payable to the Participant for purposes of determining
the amount of contributions or benefits the Participant may be entitled to receive under any
employee benefit plan of the Company or any of its Affiliates, except as specifically provided in
such plan or as otherwise determined by the Board of Directors.

     11.12 Successors. The obligations of the Company under the Plan shall be binding upon
any successor Company or organization resulting from the merger, consolidation or other
reorganization of the Company, or upon any successor Company or organization succeeding to
substantially all of the assets and business of the Company. The Company agrees that it will make
appropriate provision for the preservation of Participants’ rights under the Plan in any

33

 

agreement
or plan which it may enter into or adopt to effect any such merger, consolidation, reorganization
or transfer of assets.

     11.13 Binding Effect. The provisions of the Plan and the terms and conditions
contained in the instrument evidencing any Award made to a Participant hereunder shall be binding
upon the Participant, his or her successors and permitted transferees.

     11.14 Governing Law. The Plan shall be governed by and construed in accordance with
the laws of the State of New York without reference to its conflicts of law principles.

     11.15 Effective Date. The initial adoption of the Plan was approved by the Board of
Directors on November 30, 2004, and by the stockholders of the Company on May 19, 2005. This
amendment and restatement was approved by the Board of Directors on February 25, 2009 and, subject
to approval by the stockholders of the Company at the annual meeting of the Company’s stockholders
to be held May 18, 2009 and, upon execution by an authorized officer of the Company, shall be
effective as of May 18, 2009, and shall supercede the provisions of the Plan as in effect
immediately prior to such date. In the event that the terms of this amendment and restatement are
not approved by the stockholders of the Company, this amendment and restatement shall not become
effective and the terms of Plan shall be governed by the Second Amendment and Restatement of the
Plan which was effective as of December 31, 2008.

     IN WITNESS WHEREOF, Gibraltar Industries, Inc. has caused this Plan to be executed as of the
21 day of May, 2009.

	 	 	 	 	 
	 	GIBRALTAR INDUSTRIES, INC.

 	 
	 	By:  	/s/
Kenneth W. Smith 
 	 
	 	 	 	 
	 	 	 	 
	 

34

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