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supportserviceagreement.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SUPPORT
SERVICES AGREEMENT

    

    Support Services Agreement
(this "Agreement") dated as of June 29, 2009 (the "Effective Date") between
Strands Management Company, LLC, a California limited liability company ("SSMC")
and Pinnacle Energy Corp., a Nevada corporation, (“PENC”).

    

    WHEREAS, PENC wishes to engage
SMC to provide the Services (as defined below) on the terms and conditions set
forth herein and SMC wishes to be so retained;

    

    NOW THEREFORE, in
consideration of the premises and of the mutual covenants, conditions and
agreements contained herein, the parties agree as follows:

    

    ARTICLE
ONE

    SERVICES

    

    1.1           Management
Services.  PENC hereby
engages SMC to perform the Management Services set forth in Schedule 1 hereto
for the benefit of PENC, and SMC agrees to perform such Management Services, on
the terms and conditions set forth herein.

    

    1.2           Other
Services.  PENC may, from
time to time, engage SMC to perform other services for the benefit of PENC
(“Other Services”).   The scope of, the applicable fee for, and
any additional terms and conditions relating to any such other services shall be
reflected in a Services Addendum to this Agreement in the form of Exhibit A
hereto.

    

    1.3           Reporting.  PENC
shall have the right to request written reports at any time during the term of
this Agreement, which shall be furnished within five (5) days after such
request, describing the progress, status of, and other matters pertaining to the
Management Services and any Other Services provided pursuant to Section 1.2
(collectively, the “Services”) as PENC shall request. PENC may freely utilize
all such information arising out of the performance of the Services under this
Agreement in any manner desired.

    

    ARTICLE
TWO

    COMPENSATION

    

    2.1           Compensation.

    

    
      	
              (a)  

            	
              Management
      Services.   For each month during the term of this
      Agreement, PENC will pay to SMC a fee in respect of the Management
      Services (the “MS Fee”) equal to $10,000 in cash.   SMC
      shall have the right to participate with PENC’s other executive officers
      in any executive stock option plan adopted by PENC, at a level
      commensurate with its responsibilities as defined in this
      Agreement.   In order to induce SMC to provide the
      Management Services, promptly following the execution and delivery of this
      Agreement, PENC shall issue to the certain executive of SMC set forth on
      Schedule A that
      number of shares of PENC’s common stock set forth opposite the name of
      such executive on Schedule A (the “Shares”).  Such
      Shares shall constitute a non-refundable retainer fee and inducement to
      SMC to continue to provide the Management
  Services.

            

    

    

    

    (b)  Other
Services.   IF PENC has engaged to perform any Other
Services, PENC will pay to SMC the fee specified for such Other Services in the
applicable Services Addendum (the “Other Services Fee”).  Unless
otherwise specified in the applicable Services Addendum, the Other Services Fee
will be due and payable in cash within fifteen (15) days following PENC’s
receipt of SMC’s invoice therefore.

    

    2.2           Reimbursement.  PENC will
reimburse SMC for any and all reasonable  expenses incurred by SMC in
connection with SMC's performance of the Management Services and any Other
Services; provided,
however, that any such expenses must be pre-approved by PENC and
otherwise adhere to control procedures implemented by PENC. All requests for
reimbursement for expenses must be accompanied by documentation in form and
detail satisfactory to PENC.  PENC will reimburse SMC for expenses
incurred in compliance with this Section 2.2 within fifteen (15) days following
PENC’s receipt of SMC’s invoice therefore.

    

    ARTICLE
THREE

    REPRESENTATIONS,
WARRANTIES AND COVENANTS

    

    3.1           Representations
and Warranties.  Each party
represents and warrants to the other that:

    

    (a) It has not entered into any
agreement, whether written or oral, in conflict with this Agreement;
and

    

    (b) It has the full power and authority
to enter into this Agreement.

    

    3.2           SMC’s
Covenants.  SMC:

    

    (a) shall act as an independent
contractor with no authority to obligate PENC by contract or
otherwise;

    

    (b) shall exercise only such powers and
perform such duties as may from time to time be vested in SMC or assigned to SMC
by PENC;

    

    (c) shall devote such time and effort
as is reasonably necessary to provide the Services;

    

    (d) shall comply with all applicable
laws in the performance including all applicable securities laws and regulations
of the Services; and

    

    (e) shall not assign or subcontract
performance of this Agreement or any of the Services to any person, firm,
company or organization without PENC’s prior written consent.

    
      
        
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    ARTICLE
FOUR

    CONFIDENTIAL
INFORMATION

    

    4.1           Confidentiality.  SMC shall, during
the term of this Agreement and for a period of five years thereafter, keep all
PENC Confidential Information confidential and use such information only for the
purposes expressly set forth herein.  PENC Confidential Information
shall mean all information concerning PENC or its current or planned business,
which is disclosed to SMC by PENC or which results from, or in connection with,
any Services performed pursuant to this Agreement.

    

    4.2           Access.  SMC agrees to
limit the access to PENC Confidential Information to only those persons under
SMC's direct control who, with PENC’s knowledge and consent, are responsible for
performing the Services set forth in Article One.

    

    4.3           Authorized
Disclosure.  SMC shall have no obligation of confidentiality
and non-use with respect to any portion of PENC Confidential Information which
(i) is or later becomes generally available to the public by use, publication or
the like, through no act or omission of SMC; (ii) is obtained from a third party
who had the legal right to disclose the information to SMC; or (iii) SMC already
possesses as evidenced by SMC’s written records predating receipt thereof from
PENC.

    

    4.4           Return of
Information.  Upon the
termination of this Agreement, SMC will promptly return to PENC all materials,
records, documents, and other PENC Confidential Information in tangible
form.  SMC shall retain no copies except as required by law of such
materials and information and, if requested by PENC, will delete all PENC
Confidential Information stored in any magnetic or optical disc or
memory.

    

    4.5           Third
Party Information.  SMC shall not, in connection with the
Services to be performed under this Agreement, disclose to PENC any information,
which is confidential or proprietary to SMC, or any third party.

    

    ARTICLE
FIVE

    INDEMNITY;
LIMITATION OF LIABILITY

    

    5.1           Indemnity.

    

    (a)  PENC will indemnify and
hold harmless SMC against any and all losses, claims, damages, obligations,
penalties, judgments, awards, liabilities, costs, expenses and disbursements
(and any and all actions, suits, proceedings and investigations in respect
thereof and any and all legal and other costs, expenses and disbursements in
giving testimony or furnishing documents in response to a subpoena or
otherwise), including, without limitation, the costs, expenses and
disbursements, reasonably incurred, as and when incurred, of investigating,
preparing or defending any such action, suit, proceeding or investigation
(whether or not in connection with litigation in which SMC is a party), directly
or indirectly, caused by, relating to, based upon, arising out of, or in
connection with this Agreement or SMC's performance hereunder, except to the
extent primarily caused by the gross negligence or willful misconduct of
SMC.

    

    (b)  The indemnification
provisions shall be in addition to any liability which PENC may otherwise have
to SMC or the persons indemnified below in this sentence and shall extend to the
following: SMC, its affiliated entities, members, employees, and controlling
persons (within the meaning of the federal securities laws). All references to
SMC in this Article Five shall be understood to include any and all of the
foregoing.

    

    5.2           Limitation
of Liability.  SMC shall not have any liability (whether direct
or indirect, in contract or tort or otherwise) to PENC for or in connection with
this Agreement or SMC’s performance hereunder, except to the extent that any
such liability is found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) to have resulted primarily from SMC's gross
negligence or willful misconduct.  In no case shall SMC’s liability
(whether direct or indirect, in contract or tort or otherwise) to PENC for or in
connection with this letter agreement or SMC’s performance hereunder exceed the
aggregate fees paid by PENC to SMC hereunder.

    

    ARTICLE
SIX

    TERM
AND TERMINATION

    

    6.1           Term. The initial term of this
Agreement shall be for a period of twelve (12) months from the Effective Date
(the “Initial Term”).  After the Initial Term, the term of this
Agreement will automatically be extended for additional successive twelve month
periods unless either party provides written notice to the other party of its
intent not to so extend the term at least 30 days before the expiration of the
then current term.  Upon each annual renewal the MS Fee shall be
increased by five percent.

    

    6.2           Termination.  (a) This
Agreement may be terminated by either party upon the breach of a material term
hereof by the other party, which breach remains uncured for 30 days after the
date that the non-breaching party has served written notice on the other party,
which notice will set forth the basis of such breach and the non-breaching
party's intent to terminate the Agreement.

    

    (b) In
the event that SMC, any of its members or principals, or the individual made
available by SMC to serve as PENC’s Chief Financial Officer, is charged,
indicted or convicted of any securities laws violations, then PENC shall have
the right to terminate this Agreement and the remaining term hereof without
payment of any additional MS Fees for such remaining term.

    

    6.3           Effect of
Termination.  Upon the
expiration or termination of this Agreement, each party shall be released from
all obligations and liabilities hereunder except those arising under Articles
Four, Five and Eight; provided that, following such termination, SMC shall be
entitled to receive all amounts payable by PENC to SMC through the date of
expiration or termination of this Agreement.

    

    

    ARTICLE
SEVEN

    MISCELLANEOUS

    

    7.1           Relationship
of the Parties.

    

    (a)  PENC is a sophisticated
business enterprise that has retained SMC for the limited purposes set forth in
this letter agreement, and the parties acknowledge and agree that their
respective rights and obligations are contractual in nature. PENC recognizes
that the relationship contemplated hereby is not an exclusive relationship for
SMC or any of its personnel.  Each party disclaims an intention to
impose fiduciary obligations on the other by virtue of the engagement
contemplated by this Agreement.

    

    (b)  The Services do not
include requiring SMC to engage in any activities for which an investment
advisor's registration or license is required under the U.S. Investment Advisors
Act of 1940, or under any other applicable federal or state law; or for which a
"broker's" or "dealer's" registration or license is required under the U.S.
Securities Exchange Act of 1934, or under any other applicable federal or state
law.  SMC's work on this engagement shall not constitute the rendering
of legal advice, or the providing of legal services, to
PENC.  Accordingly, SMC shall not express any legal opinions with
respect to any matters affecting PENC.

    

    (c)  SMC will be responsible
for making appropriate filings and payments to the federal, state and local
taxing authorities, including payments of all withholding and payroll taxes due
on compensation received hereunder, estimated income payments, employment and
self-employment taxes, if applicable.

    

    7.2           Waiver. None of the terms of this
Agreement may be waived except by an express agreement in writing signed by the
party against whom enforcement of such waiver is sought.  The failure
or delay of either party in enforcing any of its rights under this Agreement
shall not be deemed a continuing waiver of such right.

    

    7.3           Entire
Agreement. This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements and understandings
among the parties (whether written or oral) relating to said subject
matter.

    

    7.4           Amendments.  This Agreement
may not be released, discharged, amended or modified in any manner except by an
instrument in writing signed by a duly authorized officer of PENC and
SMC.

    

    7.5           Assignment.  PENC has
specifically contracted for the Services of SMC and, therefore, SMC may not
assign or delegate SMC's obligations under this Agreement, either in whole or in
part, without the prior written consent of PENC.

    

    7.6           Severability.  If any provision
of this Agreement is, becomes, or is deemed invalid, illegal or unenforceable in
any jurisdiction, such provision shall be deemed amended to conform to the
applicable laws so as to be valid and enforceable, or, if it can not be so
amended without materially altering the intention of the parties hereto, it
shall be stricken and the remainder of this Agreement shall remain in full force
and effect.

    

    7.7           Headings. Article and Section headings
contained in the Agreement are included for convenience only and are not to be
used in construing or interpreting this Agreement.

    

    7.8              Notices.  All notices
provided for in this Agreement shall be in writing and shall be deemed effective
when either served by personal delivery or sent by express, registered or
certified mail, postage prepaid, return receipt requested, to the other party at
the corresponding mailing address set forth below or at such other address as
such other party may hereafter designate by written notice in the manner
aforesaid.

    

    7.9              Force
Majeure.  SMC shall be
excused for failure to provide the Services hereunder to the extent that such
failure is directly or indirectly caused by an occurrence commonly known as
force majeure, including, without limitation, delays arising out of acts of God,
acts or orders of a government, agency or instrumentality thereof (whether of
fact or law), acts of public enemy, riots, embargoes, strikes or other concerted
acts of workers (whether of SMC or other persons), casualties or accidents,
delivery of materials, transportation or shortage of cars, trucks, fuel, power,
labor or materials or any other causes, circumstances or contingencies that are
beyond the control of SMC; provided, however,
that SMC shall use its best efforts to resume provision of the Services as soon
as possible. Notwithstanding any events operating to excuse performance by SMC,
this Agreement shall continue in full force for the remainder of its term and
any renewals thereof.

    

    7.10                      Counterparts.  This Agreement
may be executed in any number of counterparts, each of which shall be an
original and all of which together shall constitute one and the same document,
binding on all parties notwithstanding that each of the parties may have signed
different counterparts.

    

    7.11                      Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of California and the parties to this
Agreement hereby submit to the exclusive jurisdiction of the courts, both state
and federal, in the County of Orange, State of California.

    

    IN WITNESS WHEREOF, the
parties have entered into this Agreement on the date first above
written.

    

    STRANDS
MANAGEMENT COMPANY,
LLC,                                                                                                                     Pinnacle
Energy Corp.

    a
California limited liability
company                                                                                                                                         
 a Nevada corporation

    

    

    

    ____________________________________                                                                                                                     

    By: Keith
Moore                                                                                                                                                                      
By: Scott Lawler

    Title:
Managing
Member                                                                                                                                                           
    Title: Chief Executive Officer

    Address:
30950 Rancho Viejo Rd #120

         San Juan
Capistrano, CA  9267

    

    
      
        
          

        

         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
1

    Management
Services

    

    
      	
              ·  

            	
              Make
      available an individual(s) acceptable to PENC in its sole discretion to
      serve as Chief Financial Officer and Secretary of the board of
      PENC.

            

    

    
      	
              ·  

            	
              Perform
      all principal accounting and financial officer
  duties.

            

    

    
      	
              ·  

            	
              Direct
      all finance, accounting and treasury functions including SEC filings,
      audits, cash forecasting, cash management, operational budgeting,
      month-end closing, and ensure accuracy and compliance in
      accounting/financial reporting.

            

    

    
      	
              ·  

            	
              Analyze
      financial and operating information for management to facilitate
      decision-making and provide input for corrective action, where
      applicable.

            

    

    
      	
              ·  

            	
              Forecast
      and monitor financial information against goals and operating
      strategy.

            

    

    
      	
              ·  

            	
              Manage/oversee
      relationships with independent auditors, banks and investment banking
      community.

            

    

    
      	
              ·  

            	
              Handle
      financial negotiations with other third party
    relationships.

            

    

    
      	
              ·  

            	
              Prepare
      quarterly updates to the financial
forecast.

            

    

    
      	
              ·  

            	
              Lead
      the financial due diligence
efforts.

            

    

    
      	
              ·  

            	
              Lead
      the integration of accounting and finance systems for
    mergers.

            

    

    
      	
              ·  

            	
              Provide
      all acquisition support functions, including due diligence, transaction
      and integration support.

            

    

    
      	
              ·  

            	
              Develop
      processes and systems to train Company personnel to succeed Management
      company in all roles

            

    

    
      	
              ·  

            	
              Support
      and evaluate all corporate capital formation activities including debt,
      equity, and debt issuance
transactions.

            

    

    
      	
              ·  

            	
              Develop
      long term corporate strategic plans with management input and direction
      from the Company’s Board

            

    

    

    
      
        
           

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
A

    Common
Stock to Be Issued:

    

    Matt
Szot:                                              50,000
common shares

    
      
        
           

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    Attachment
A

    Services
Addendum

    

    

    
      	
              Scope
      of Other Services:

               

               

               

               

            	 
      
	
              Other
      Services Fee:

               

               

               

            	 
      
	 
      	 
      
	
              Other
      Terms and Conditions:

               

               

               

               

               

            	 
      

    

    

     

    Acknowledged
and agreed by:

     

    

    PINNACLE  ENERGY
CORP.

    

    

    
      	
               
      

            	
              By:/s/ W. SCOTT
      LAWLER

            

    

    
      	
               
      

            	
              Date:
      JUNE 30, 2009

            

    

    

    

    STRANDS
MANAGEMENT COMPANY, LLC

    

    

    
      	
               
      

            	
               By:/s/ KEITH
      MOORE

            

    

             Date: JUNE 30,
2009Exhibit 10.22.1

 

SECOND RESTATED EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
between Talecris Biotherapeutics Holdings Corporation (the “Company”) and
Lawrence D. Stern (the “Executive”) (together, the “Parties”) was effective as
of April 1, 2005 (the “Effective Date”) and was amended and restated as of
April 1, 2007 (the “Original Restatement Date”), with all terms
retroactive to such date, and is hereby amended and restated as of January 1,
2009 (the “Second Restatement Date”).

 

WHEREAS, the Parties have
previously entered into this Agreement and they now wish to amend its terms in
order to establish its compliance with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), with the understanding that this
Agreement supersedes all prior versions and hereinafter shall solely establish
the terms of Executive’s employment with the Company.

 

Accordingly, the Parties
agree as follows:

 

1.                                       Employment
and Acceptance.  The Company shall employ the
Executive, and Executive shall accept employment, subject to the terms of this
Agreement, as of the Effective Date. From and after the Second Restatement
Date, “Agreement” shall refer to the terms of the Executive’s employment with
the Company as stated herein

 

2.                                       Term. 
Subject to earlier termination pursuant to Section 5 of this
Agreement, this Agreement and the employment relationship hereunder shall
continue for two years from the Original Restatement Date (“Initial Renewal
Term”) and shall renew for additional one (1) year intervals (each a “Subsequent
Term”) upon written notification by the Board of Directors.  If the Board does not provide such written
notification thirty days prior to the expiration of the Term, then the
Agreement shall not be extended.  If the
Board provides such written notification then the Agreement shall be so
extended unless the Executive provides written notification to the Board that
Executive does not wish to extend the Term. 
Executive’s written notice of his desire not to extend the Term shall be
provided to the Board by sixty (60) days prior to the expiration of the Term
or, if the Board has not then provided such notification, then by seven (7) days
after written notification from the Board. 
As used in this Agreement, the “Term” shall refer to the period
beginning on the Effective Date and ending on the date the Executive’s
employment terminates in accordance with this Section 0 or Section 5.  In the event that the Executive’s employment
with the Company terminates for any reason, the Company’s obligation to continue
to pay all base salary, as adjusted, bonus and other benefits then accrued
shall terminate except as may be provided for in Section 5 of this
Agreement.

 

3.                                       Duties
and Title.

 

3.1                                 Title. 
The Company shall employ the Executive to render services to the Company
and its subsidiaries.  Executive
currently serves in the capacity of Chairman and Chief Executive Officer of
Talecris Biotherapeutics Holdings Corporation. 
At any time during the Initial Renewal Term or Subsequent Term, upon 60
days notice, the Board of Directors (the “Board”) of the Company may 

 

 

change the Executive’s
capacity and title from From Chairman and Chief Executive Officer to Executive
Chairman or to Chairman (in a non-executive capacity).  (As used herein, all references to the position
of “EC/CEO” shall include the position of Executive Chairman and Chairman and
Chief Executive Officer and all references to the position of “Chairman” shall
mean Chairman of the Board of Directors in a non-executive capacity.) If the
Agreement is renewed for a Subsequent Term, Executive shall serve in the
capacity of Chairman, unless otherwise agreed upon in writing by the
parties.  In each of these capacities,
Executive shall report to the Board.

 

3.2                                 Duties. 
The Executive will have such authority and responsibilities and will
perform such executive duties customarily performed by individuals holding such
roles in a company in similar lines of business as the Company and its
subsidiaries or as may be assigned to Executive by the Board.  While serving in the position of EC/CEO, the
Executive will devote all his full working-time and attention to the
performance of such duties and to the promotion of the business and interests
of the Company and its subsidiaries.  While
serving in the position of Chairman, Executive will devote such time as
necessary to perform the duties associated therewith, but will not be required
to devote his full time and attention to the Company.  For avoidance of doubt, while serving as Chairman,
Executive will be permitted to pursue outside activities so long as such
activities do not interfere or conflict with his duties hereunder or in any way
violate the terms of Section 6 herein.

 

4.                                       Compensation
and Benefits by the Company.  As
compensation for all services rendered pursuant to this Agreement, the Company
shall provide the Executive the following from the Second Restatement Date:

 

4.1                                 Base
Salary.  The Company will pay to the Executive an
annual base salary of Six Hundred Thousand Dollars ($600,000) for so long as he
holds the position of EC/CEO and an annual base salary of Three Hundred and
Fifty Thousand Dollars ($350,000) while he holds the position of Chairman (the “Base
Salary”).  The Base Salary shall be
payable (not less often than monthly) in accordance with the customary payroll
practices of the Company.  Executive’s
Base Salary shall be reviewed consistent with the normal merit and pay
adjustment cycle for executives.  In
evaluating adjustments to Executive’s Base Salary, such factors as corporate
performance, individual merit, inflation, and other appropriate considerations
shall be taken into account.

 

4.2                                 Performance
Bonus.  The Executive will be eligible to receive an
annual performance bonus (“Performance Bonus”) under a plan established by the
Company in the amount determined by the Board based upon achievement of
performance measures derived from the annual business plan presented by
management and approved by the Board, except as provided in Section 5 of
this Agreement.  The Executive’s target
Performance Bonus shall be 200% of his Base Salary while he holds the position
of EC/CEO and 100% of his Base Salary while he holds the position of Chairman
(the “Target Performance Bonus”), with 

 

2

 

the actual amount of each
Performance Bonus being determined under the Bonus Plan in effect at that time
as approved by the Board.  The
Performance Bonus shall be paid to the Executive within two and one-half (21⁄2)
months after the end of the year to which the bonus relates.

 

4.3                                 Participation
in Employee Benefit Plans.  The Executive
shall be entitled, if and to the extent eligible, to participate in all of the
applicable benefit plans of the Company, which may be available to other senior
executives of the Company, on the same terms as such other executives.  The Company may at any time or from time to
time amend, modify, suspend or terminate any employee benefit plan, program or
arrangement for any reason without Executive’s consent if such amendment,
modification, suspension or termination is consistent with the amendment,
modification, suspension or termination for other employees of the Company.

 

4.3.1                        Reimbursement of Group Health Insurance if Executive
is Deemed Ineligible to Participate in the Company Plan. 
To the extent that Executive is deemed ineligible to participate in the
Company’s health care benefit plans for which other senior executives are
eligible due to a change in his position at the Company from EC/CEO to
Chairman, then the Company shall reimburse Executive for the cost of
independently procuring reasonably similar health care benefits.  The Executive shall apply for all
reimbursements hereunder for a particular calendar year not later than
forty-five (45) days after it ends, and payment shall occur not later than two
and one-half (21⁄2) months after the end of the calendar year to which the
reimbursable expenses relate.

 

4.4                                 Personal
Time Off.  The Executive shall be entitled to 30 days
(240 hours) of Personal Time Off (PTO). 
PTO time is to be used for vacation, sick leave, personal business,
observance of non-company holidays, and other time off.  The PTO schedule assumes a maximum of 4 weeks
(160 hours) of vacation, and 10 days (80 hours) for sick time, personal holidays,
and other personal business.  The carry-over
and accrual of PTO hours shall be in accordance with Company policy as in
effect from time to time, except that 10 days of PTO will immediately accrue.

 

4.5                                 Business
Expense Reimbursement.  The Executive
shall be entitled to receive reimbursement for all appropriate business
expenses incurred by him in connection with his duties under this Agreement in
accordance with the policies of the Company as in effect from time to
time.  The Executive shall apply for all
reimbursements hereunder for a particular calendar year not later than
forty-five (45) days after it ends, and payment shall occur not later than two
and one-half (21⁄2) months after the end of the calendar year to which the
reimbursable expenses relate.

 

4.6                                 Other
Expense Reimbursement.

 

3

 

4.6.1                        Home Office Expenses.  The Company
shall reimburse Executive for all reasonable expenses he incurs for the
maintenance of a home office.  The
Executive shall apply for all reimbursements hereunder for a particular
calendar year not later than forty-five (45) days after it ends, and payment
shall occur not later than two and one-half (21⁄2) months after the end of the
calendar year to which the reimbursable expenses relate.

 

4.6.2                        North Carolina Living and Travel Expenses. 
While Executive holds the position of EC/CEO, the Company shall
reimburse Executive for living expenses in North Carolina (including housing
and meals).  In the alternative, if
Executive determines to establish a secondary residence in North Carolina while
Executive holds the position of EC/CEO, the Company shall reimburse Executive
for documented realtor and closing costs plus trucking/moving expenses.  In addition, Executive will be entitled to
reimbursement of travel expenses for weekly travel (for either Executive’s
travel or travel by his spouse) to and from Raleigh North Carolina and
Executive’s then current primary residence. 
To the extent that the Company determines it must withhold tax on any
such living or travel expenses, the Company will “gross up” Executive for the
amount of the withholding taxes in accordance with the Company’s customary
procedure.  The Executive shall apply for
all reimbursements described in this section for a particular calendar year not
later than forty-five (45) days after it ends, and payment shall occur not
later than two and one-half (21⁄2) months after the end of the calendar year to
which the reimbursable expenses relate.

 

4.6.3                        Car Allowance.  While
Executive holds the position of EC/CEO, the Company shall pay Executive a car
allowance of $750 per month.  The
Executive shall apply for all reimbursements hereunder for a particular
calendar year not later than forty-five (45) days after it ends, and payment
shall occur not later than two and one-half (21⁄2) months after the end of the
calendar year to which the reimbursable expenses relate.

 

4.6.4                        Continuing Professional Education. 
The Company agrees to pay reasonable costs associated with the
continuing education requirements of maintaining the Executive’s professional
designation, including related professional organization memberships, as well
as seminars to advance the Executive’s skills. 
Such costs include the reasonable costs of seminars, travel, lodging and
meals while attending such functions. 
The Executive shall apply for all reimbursements hereunder for a
particular calendar year not later than forty-five (45) days after it ends, and
payment shall occur not later than two and one-half (21⁄2) months after the end
of the calendar year to which the reimbursable expenses relate.

 

4.7                                 Stock
Options.  The Executive shall be eligible to
participate in the 2005 Stock Option and Incentive Plan established by the
Company (the “Stock Option Plan”) 

 

4

 

pursuant to the terms of
the Stock Option Plan and any applicable agreements thereunder as determined
from time to time by the Board.

 

4.7.1                        In addition, if Executive holds the position of EC/CEO
at the time of the initial public offering by the Company of its common stock
to the public, the Compensation Committee will grant Executive an option under
the terms of the Stock Option Plan, effective immediately prior to the initial
public offering by the Company of its common stock to the public, with an
exercise a price equal to Fair Market Value at the time of the grant to
purchase a number of shares equal to one percent (1%) of the then fully diluted
outstanding shares prior to such public offering at an exercise price equal to
the public offering price.  Such stock
options will be on the terms of the Stock Option Award Agreement attached to
this Agreement.

 

4.8                                 Parachute
Payments.  Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of
the Tax Code) to or for the benefit of the Executive, whether paid or payable
pursuant to this Agreement (including, without limitation, the accelerated
vesting of incentive or equity awards held by the Executive) or otherwise would
be subject to the excise tax imposed by Section 4999 of the code, then the
amount of “parachute payments” (as defined in Section 280G of the Code)
payable or required to be provided to the Executive shall be automatically
reduced to the minimum extent necessary to avoid imposition of such excise tax
(with the types of benefits or compensation that are reduced to be determined
by the Company at its discretion, which shall be exercised first with respect
to compensation and benefits that are not exempt from Code Section 409A);
provided that this reduction shall not apply if the Executive would be better
off, on a net after-tax basis, receiving the parachute payments that would
otherwise be reduce and paying such excise tax. 
Notwithstanding the foregoing, the Company shall use its reasonable
efforts to have any payments or distributions that would be reduced or
eliminated as a result of the application of this Section 4.9 approved by
the Company’s shareholders in the manner contemplated by Q&A 7 of Treasury
Regulation Section 1.280G-1.  All
determinations required to be made under this Section 4.8 shall be made by
the Company’s accounting firm (the “Accounting Firm”); provided that the
Executive may select which, if any, parachute payments shall be reduced.  The Accounting Firm shall provide detailed
supporting calculations both to the Company and the Executive.  All fees and expenses of the Accounting Firm
shall be borne solely by the Company. 
Absent manifest error, any determination by the Accounting Firm shall be
binding upon the Company and the Executive.

 

5.                                       Termination
of Employment.

 

5.1                                 By
the Company for Cause or by the Executive Without Good Reason. 
If: (i) the Company terminates the Executive’s employment with the
Company for Cause (as defined below) or (ii) Executive terminates his
employment without Good 

 

5

 

Reason (as defined
below), the Executive or the Executive’s legal representatives (as
appropriate), shall be entitled to receive, within 60 days of the Executive’s
Separation from Service (subject to Section 9.10 below) the following:

 

5.1.1                      the Executive’s accrued but unpaid Base Salary, and
unpaid benefits set forth in Section 4.3 and 4.4, if any, to the date of
Separation from Service;

 

5.1.2                      the Executive’s earned but unpaid Bonus, if any, for
the performance year prior to the date of Separation from Service and only if
the Company and not the Executive terminates employment;

 

5.1.3                      expenses reimbursable under Section 4.5 and 4.6
incurred but not yet reimbursed to the Executive to the date of Separation from
Service.

 

5.1.4                      vesting and exercise of Stock Options to the extent
set forth in Executive’s Stock Option Award Agreements

 

5.1.5                      vesting of Restricted Stock to the extent set forth in
Executive’s Restricted Stock Agreements.

 

For the purposes of this Agreement, “Cause” means,
as determined by the Board (or its designee), with respect to conduct during
the Executive’s employment with the Company, whether or not committed during
the Term, (i) commission of a felony by Executive; (ii) acts of
dishonesty by Executive resulting or intending to result in personal gain or
enrichment at the expense of the Company or its subsidiaries; (iii) Executive’s
material breach of his obligations under this Agreement; (iv) conduct by
Executive in connection with his duties hereunder that is fraudulent, unlawful
or grossly negligent, including, but not limited to, acts of discrimination; (v) engaging
in personal conduct by Executive (including but not limited to employee
harassment or discrimination, the use or possession at work of any illegal
controlled substance) which discredits or damages the Company or its
subsidiaries; (vi) contravention of specific lawful direction from the
Board of Directors that would not otherwise conflict with Executive’s
responsibilities or duties or the failure to adequately perform the duties to
be performed by Executive under the terms of Section 3.2 of this Agreement
or (vii) breach of the Executive’s covenants set forth in Section 6
below before termination of employment; provided, that, the Executive shall
have fifteen (15) days after notice from the Company to cure the deficiency
leading to the Cause determination (except with respect to (i) and (ii) above),
if curable.  A termination for “Cause”
shall be effective immediately (or on such other date set forth by the
Company).

 

For the purposes of this Agreement, “Good Reason”
means, without the Executive’s consent, (i) a material reduction in the
nature or status of Executive’s responsibilities, authority, or duties; (ii) the
removal of Executive, without his consent, from the position of Chairman of the
Board other than for Cause; (iii) a material adverse reduction in the
amount of aggregate compensation provided for herein or failure to pay such
compensation; (iv) the Company’s material breach of the Agreement;
provided that a suspension of the Executive and the requirement that the
Executive not report to work shall not constitute “Good Reason” if the
Executive continues to receive the compensation and benefits required by this
Agreement; or (v) the failure by the 

 

6

 

Company to continue in effect any incentive
compensation plan in which the Executive participates unless an equitable
alternative compensation arrangement has been provided, except to the extent
that participation in such plans has been reduced or eliminated for all other
eligible executives; (vii) except as required by law, the failure by the
Company to continue to provide Executive with benefits at least as favorable as
those enjoyed by Executive under the employee benefit and welfare plans of the
Company including, without limitation, profit sharing, life insurance, medical,
dental, health and accident , disability, deferred compensation and savings
plans commensurate with those generally available to all Executives.  Notwithstanding the foregoing, a reduction in
the amount of Executive’s aggregate compensation in an amount proportional to
such a reduction in the aggregate compensation of other senior executives shall
not constitute Good Reason.  The
Executive shall provide notice to the Company of the existence of (i) through
(vii) of this Section within ninety (90) days of the initial
existence of such condition, upon the notice of which the Company shall have at
least thirty (30) days within which to cure such condition.  If the Company fails to cure the condition
within the cure period specified in the preceding sentence, the Executive must
terminate employment within thirty (30) days of the Company’s failure to
cure.  For the avoidance of doubt, a
change of position from EC/CEO to Chairman does not constitute a termination of
employment or the termination of Executive’s status as a Key Person under the
Stock Option Plan.

 

For purposes of this Agreement, “Separation from
Service” shall mean the termination of services provided by Executive, whether
voluntary or involuntary, as determined by the Company in accordance with
Treas.  Reg. § 1.409A-1(h).  In determining whether the Executive has
experienced a Separation from Service, the following provisions shall apply:

 

(a)           Separation from Service shall occur
when the Executive experiences a termination of employment with the Company and
any affiliate in which the Company has more than a 50% ownership interest
(together with the Company, the “Employer”), which shall be considered to have
occurred when the facts and circumstances indicate that the Executive is not
reasonably expected to perform further services for the Employer after a
certain date.

 

(b)           If the Executive is on military
leave, sick leave, or other bona fide leave of absence, the employment
relationship between the Executive and the Employer shall be treated as
continuing intact, provided that the period of such leave does not exceed six
months, or longer, so long as the Executive retains a right to reemployment
with the Employer under an applicable statute or by contract.  If the period of leave exceeds six months and
the Executive does not retain a right to reemployment under an applicable
statute or by contract, the Executive will incur a Separation from Service as
of the first day immediately following the end of such six-month period.  However, where the Executive’s leave of
absence is due to his or her Disability, a 29-month period of absence will be
substituted for such six-month period. 
In applying the provisions of this paragraph, a leave of absence shall
be considered a bona fide leave of absence only if there is a reasonable
expectation that the Executive will return to perform services for the
Employer.

 

5.2                                 Due
to Death or Disability.  If: (i) the
Executive’s employment terminates due to his death; or (ii) the Company
terminates the Executive’s employment with the 

 

7

 

Company due to the
Executive’s Disability (as defined below) and (i) the Executive honors all
applicable provisions of this Agreement following such termination due to
Disability, (ii) Executive agrees to make a good faith effort to provide
consulting services to the Company as requested by the Company during the
severance period at no additional payment or remuneration other than the
severance amount stated herein, (iii) Executive or Executive’s legal representative
executes, without revoking, a valid release agreement in a form reasonably
acceptable to the Company (but which does not require Executive or Executive’s
legal representative to release any rights under this Section 5.2 of the
Agreement or indemnification rights under Section 8 of the Agreement or
under the articles of incorporation or by-laws of the Company or any of its
subsidiaries), the Executive or the Executive’s legal representatives (as
appropriate), shall be entitled to receive the incremental severance payments
set forth in this section 5.2 (in addition to the payments upon termination set
forth in Section 5.1) , with payment to be made within two and one-half (2’/2)
months following the end of the year in which the Executive’s death or Disability
occurs, unless otherwise indicated below (subject to Section 9.10 below):

 

5.2.1                       the unpaid portion of the Performance Bonus, if any,
relating to the calendar year prior to the calendar year of the Executive’s
death or Disability;

 

5.2.2                       payment for accrued unused PTO days, payable in
accordance with Company policy;

 

5.2.3                       if the Company achieves the performance objectives for
the year in which Executive’s employment is terminated as a result of Executive’s
death or Disability pursuant to this Section 5.2, a pro-rata share of the
Performance Bonus in such performance year (based upon the number of days he
was employed by the Company in the year in question) at 100% of Target
Performance Bonus;

 

5.2.4                       the vesting and exercising of stock options to the
extent set forth in Executive’s stock option award agreements.

 

5.2.5                       the vesting of all Restricted Shares granted under the
2006 Restricted Stock Plan;

 

5.2.6                       payment of all Special Recognition Bonus Compensation
awarded pursuant to the Special Recognition Bonus Plan effective as of October 1,
2006, which shall be paid no later than two and one-half (21⁄2) months after the
end of the calendar year in which the Executive’s right to the payment vests
hereunder;

 

5.2.7                       payment of all of the Special Recognition Bonus Award
made to Executive on December 6, 2007, which shall be paid no later than
two and 

 

8

 

one-half (2 ‘/2) months after the end of the calendar year in which the
Executive’s right to the payment vests hereunder;

 

5.2.8                       vesting of Stock Renewal Bonus to the extent set forth
in Executive’s Restricted Stock Agreement;

 

For the purposes of this Agreement, “Disability”
means a reasonable determination by a physician reasonably acceptable to the
Company in accordance with applicable law that as a result of a physical or
mental injury or illness, the Executive is unable to perform the essential
functions of his job with or without reasonable accommodation for a period of (i) 60
consecutive days; or (ii) 90 days in any one (1) year period.

 

5.3                                 By the Company Without Cause or By the
Executive for Good Reason.  If during the
Term the Company terminates Executive’s employment without Cause (which may be
done at any time without prior notice) or Executive terminates his employment
for Good Reason upon at least fifteen (15) days prior written notice, the
Executive shall receive, subject to Section 9.10 below, the incremental
severance payments set forth in this Section 5.3, as described below (in
addition to the payments upon termination specified in Section 5.1) upon
execution without revocation of a valid release agreement in a form reasonably
acceptable to the Company and provided that the Executive honors all applicable
provisions of this Agreement following termination and that Executive has made
a good faith effort to support the transition including periodic consulting
services to the Company during this eighteen (18) month time period (except
that no consulting services shall be required the event of a Change of
Control), at no additional payment or remuneration other than the severance
amount stated herein:

 

5.3.1                       a lump sum payment equal to Base Salary for the
greater of eighteen (18) months after the date of Separation from Service or
the remainder of the number of months remaining in the then current contract
term, payable in a lump sum on the last business day of the month following the
Separation from Service;

 

5.3.2                       Performance Bonus payments in an aggregate amount
equal to the lesser of the Performance Bonus amount earned by the Executive for
the year prior to the calendar year of the Executive’s Separation from Service
or the Target Performance Bonus, payable in a lump sum on the last business day
of the month following the Separation from Service;

 

5.3.3                       reimbursement of the cost of continuation coverage of
group health coverage pursuant to COBRA for a maximum of twelve (12) months to
the extent Executive elects such continuation coverage and is eligible and
subject to the terms of the plan and the law, payable in a lump sum on the last
business day of the month following the Separation from Service; and

 

5.3.4                       the vesting and exercising of stock options to the
extent set forth in Executive’s stock option award agreements.

 

9

 

5.3.5        the
vesting of all Restricted Shares granted under the 2006 Restricted Stock Plan;

 

5.3.6        payment
of all Special Recognition Bonus Compensation awarded pursuant to the Special
Recognition Bonus Plan effective as of October 1, 2006, payable in a lump
sum on the last business day of the month following the Separation from
Service;

 

5.3.7        payment
of all of the Special Recognition Bonus Award made to Executive on December 6,
2007, payable in a lump sum on the last business day of the month following the
Separation from Service;

 

5.3.8        vesting
of Stock Renewal Bonus to the extent set forth in Executive’s Restricted Stock
Agreement.

 

5.4           Termination
Due to Completion of Term Without Renewal.  If the
contract lapses due to non-renewal by the Company upon expiration of the
Initial Renewal Term, the Executive or the Executive’s legal representatives
(as appropriate) shall be entitled to receive the severance benefits set forth
in section 5.3 (in the time and manner described above, and subject to Section 9.10
below), but specifically excluding the benefits set forth in section 5.3.2,
upon execution without revocation of a valid release agreement in a form
reasonably acceptable to the Company and provided that the Executive honors all
applicable provisions of this Agreement following termination and that
Executive has made a good faith effort to support the transition including
periodic consulting services to the Company during this eighteen (18) month
time period, at no additional payment or remuneration other than the severance
amount stated herein.  Notwithstanding
the foregoing, the amount of severance to be paid to Executive under this Section 5.4
shall be reduced by any amount of compensation that Executive earns from other
employment or the provision of consulting services during the 18 month time
frame in which severance is to be paid. 
For purposes of this paragraph compensation shall include all forms of
compensation (e.g. base salary, bonus payments, equity grants), but shall not
include investment income earned by Executive.

 

5.5           Termination
by Executive following Change in Control.  If Executive
terminates his employment during the 90-day period commencing immediately after
a Change in Control not involving an Initial Public Offering, the Executive
shall be entitled to receive the incremental severance payments set forth in Section 5.3.  For purposes of this Agreement, a “Change in
Control” means the occurrence of any one of the following:

 

(i)            any Person, other than a Permitted Investor, is or
becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing (A) more
than 30% of the total voting power of the Company’s then outstanding securities
generally eligible to vote for the election of directors (the “Company Voting
Securities”) and (B) a greater percentage of the then 

 

10

 

outstanding Company
Voting Securities that are than held by all the Permitted Investors in the aggregate;
provided, however, that any of the following acquisitions shall not be deemed
to be a Change in Control: (1) by the Company or any subsidiary or
affiliate, (2) by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any subsidiary or affiliate, (3) by any
underwriter temporarily holding securities pursuant to an offering of such
securities, or (4) pursuant to a Non-Qualifying Transaction (as defined in
paragraph (ii));

 

(ii)           the consummation of a merger, consolidation, statutory
share exchange or similar form of corporate transaction involving the Company
or any of its subsidiaries or affiliates (a “Business Combination”), unless
immediately following such Business Combination:

 

(A)          more than 50% of the total voting power of (x) the
corporation resulting from such Business Combination (the “Surviving
Corporation”), or (y) if applicable, the ultimate parent corporation
that directly or indirectly has beneficial ownership of a majority of the
voting securities eligible to elect directors of the Surviving Corporation (the
“Parent Corporation”), is represented by Company Voting Securities that
were outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which such Company Voting Securities
were converted pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same proportion as the voting
power of such Company Voting Securities among the holders thereof immediately prior
to the Business Combination,

 

(B)           no Person, other than a Permitted Investor or any
employee benefit plan (or related trust) sponsored or maintained by the
Surviving Corporation or the Parent Corporation, is or becomes the beneficial
owner, directly or indirectly, of securities of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation) representing (A) 30%
of the total voting power of the securities then outstanding generally eligible
to vote for the election of directors of the Parent Corporation (or the
Surviving Corporation) (the “Parent Voting Securities”), and (B) a
greater percentage of the then outstanding Parent Voting Securities that are
then held by all the Permitted Investors in the aggregate, and

 

(C)           at least a majority of the members of the board of
directors of the Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) following the consummation of the Business Combination
were Incumbent Directors at the time of the Board’s approval of the execution
of the initial agreement providing for such Business Combination; (any Business
Combination which satisfies all of the criteria specified in (A), (B) and (C) above
shall be deemed to be a “Non-Qualifying Transaction”) ;

 

11

 

(iii)          the shareholders of the Company approve a plan of
complete liquidation or dissolution of the Company; or

 

(iv)          the consummation of a sale of all or substantially all
of the Company’s assets to an entity that is not an affiliate of the Company
(other than pursuant to a Non-Qualifying Transaction).

 

Notwithstanding
the foregoing, a Change in Control of the Company shall not be deemed to occur
solely because any person acquires beneficial ownership of more than 30% of
Company Voting Securities as a result of the acquisition of Company Voting
Securities by the Company which reduces the number of Company Voting Securities
outstanding; provided, that if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a Change in Control of the
Company may then occur.

 

5.6           Conduct
Constituting a Breach.  The Company’s
obligation to provide the payments and benefits set forth above in sections
5.2, 5.3, 5.4 and 5.5 will immediately cease in the event the Executive engages
in conduct constituting a breach of the provision of Sections 5.9 or 6 of this
Agreement.

 

5.7           Compliance
with Code Section 409A.  This
Agreement is intended to comply with (or be exempt from) Code Section 409A,
and the Company shall have complete discretion to interpret and construe this
Agreement and any associated documents in any manner that establishes an
exemption from (or otherwise conforms them to) the requirements of Code Section 409A.  If, for any reason including imprecision in
drafting, the Agreement does not accurately reflect its intended establishment
of an exemption from (or compliance with) Code Section 409A, as
demonstrated by consistent interpretations or other evidence of intent, the
provision shall be considered ambiguous and shall be interpreted by the Company
in a fashion consistent herewith, as determined in the sole and absolute
discretion of the Company.  The Company
reserves the right to unilaterally amend this Agreement without the consent of
the Executive in order to accurately reflect its correct interpretation and
operation, as well as to maintain an exemption from or compliance with Code Section 409A.  Nevertheless, and notwithstanding any other
provision of this Agreement, neither the Company nor any of its employees,
directors, or their agents shall have any obligation to mitigate, nor to hold
the Executive harmless from, any or all taxes (including any imposed under Code
Section 409A) arising under this Agreement.

 

5.8           Removal
from any Boards and Position.  If the
Executive’s employment is terminated for any reason under this Agreement, he
shall be deemed to resign (i) if a member, from the Board or board of
directors of any subsidiary of the Company or any other board to which he has
been appointed or nominated by or on behalf of the Company and (ii) from
any position with the Company or any subsidiary of the Company, including, but
not limited to, as an officer of the Company and any of its subsidiaries.

 

12

 

5.9           Non-disparagement. 
The Company and Executive agree that neither party will not at any time
(whether during or after the Term) publish or communicate to any person or
entity except in the case of the Executive to his spouse, or in the case of the
Company and Executive to legal counsel, any Disparaging (as defined below)
remarks, comments or statements concerning the Executive or the Company,
Cerberus Capital Management, L.P., Ampersand Ventures, their parents,
subsidiaries and affiliates, and their respective present and former members,
partners, directors, officers, shareholders, employees, agents, attorneys, successors
and assigns, except as required by law or an order of a court or governmental
agency with jurisdiction..  “Disparaging”
remarks, comments or statements are those that impugn the character, honesty,
integrity or morality or business acumen or abilities in connection with any
aspect of the operation of business of the individual or entity being
disparaged.

 

6.             Restrictions and Obligations of the Executive

 

6.1           Confidentiality.  (a) During
the course of the Executive’s employment by the Company (prior to and during
the Term), the Executive has had and will have access to certain trade secrets
and confidential information relating to the Company and its subsidiaries (the “Protected
Parties”) which is not readily available from sources outside the Company.  The confidential and Proprietary information
and, in any material respect, trade secrets of the Protected Parties are among
their most valuable assets, including but not limited to, their customer,
supplier and vendor lists, databases, competitive strategies, computer
programs, frameworks, or models, their marketing programs, their sales,
financial, marketing, training and technical information, their product
development (and proprietary product data) and any other information, whether
communicated orally, electronically, in writing or in other tangible forms
concerning how the Protected Parties create, develop, acquire or maintain their
products and marketing plans, target their potential customers and operate
their retail and other businesses.  The
Protected Parties invested, and continue to invest, considerable amounts of
time and money in their process, technology, know-how, obtaining and developing
the goodwill of their customers, their other external relationships, their data
systems and data bases, and all the information described above (hereinafter
collectively referred to as “Confidential Information”), and any
misappropriation or unauthorized disclosure of Confidential Information in any
form would irreparably harm the Protected Parties.  The Executive acknowledges that such
Confidential Information constitutes valuable, highly confidential, special and
unique property of the Protected Parties. 
The Executive shall hold in a fiduciary capacity for the benefit of the
Protected Parties all Confidential Information relating to the Protected
Parties and their businesses, which shall have been obtained by the Executive
during the Executive’s employment by the Company or its subsidiaries and which
shall not be or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement).  Except as required by law or an order of a
court or governmental agency with jurisdiction, the Executive shall not, during
the period the Executive is employed by the Company or its subsidiaries or at
any time for 

 

13

 

five (5) years
thereafter, disclose any Confidential Information, directly or indirectly, to
any person or entity for any reason or purpose whatsoever, nor shall the
Executive use it in any way, except in the course of the Executive’s employment
with, and for the benefit of, the Protected Parties or to enforce any rights or
defend any claims hereunder or under any other agreement to which the Executive
is a party, provided that such disclosure is relevant to the enforcement of
such rights or defense of such claims and is only disclosed in the formal
proceedings related thereto.  The
Executive shall take all reasonable steps to safeguard the Confidential Information
and to protect it against disclosure, misuse, espionage, loss and theft.  The Executive understands and agrees that the
Executive shall acquire no rights to any such Confidential Information. (b) All
files, records, documents, drawings, specifications, data, computer programs,
evaluation mechanisms and analytics and similar items, except for those
evaluation mechanisms and analytics and similar items which are of prior art or
common practice within the Executive’s professional capacity, relating thereto
or to the Business (for the purposes of this Agreement, “Business” shall be as
defined in Section 6.3 hereof), as well as all customer lists, specific
customer information, compilations of product research and marketing techniques
of the Company and its subsidiaries, whether prepared by the Executive or
otherwise coming into the Executive’s possession, shall remain the exclusive
property of the Company and its subsidiaries, and the Executive shall not
remove any such items from the premises of the Company and its subsidiaries,
except in furtherance of the Executive’s duties under any employment agreement.
(c) It is understood that while employed by the Company or its
subsidiaries, the Executive will promptly disclose to it, and assign to it the
Executive’s interest in any invention, improvement or discovery made or
conceived by the Executive, either alone or jointly with others, which: (i) relate
in any manner to the existing or contemplated business, research or activities
of the Company; (ii) are suggested by or result from Executive’s work with
the Company, or (iii) result from the Executive’s use of the Company’s
time, materials, information, employees or facilities even if made or conceived
during other than working hours.  At the
Company’s request and expense, the Executive will assist the Company and its
subsidiaries during the period of the Executive’s employment by the Company or
its subsidiaries and thereafter in connection with any controversy or legal
proceeding relating to such invention, improvement or discovery and in
obtaining domestic and foreign patent or other protection covering the same. (d) As
requested by the Company and at the Company’s expense, from time to time and
upon the termination of the Executive’s employment with the Company for any
reason, the Executive will promptly deliver to the Company and its subsidiaries
all copies and embodiments, in whatever form, of all Confidential Information
in the Executive’s possession or within his control (including, but not limited
to, memoranda, records, notes, plans, photographs, manuals, notebooks,
documentation, program listings, flow charts, magnetic media, disks, diskettes,
tapes and all other materials containing any Confidential Information)
irrespective of the location or form of such material.  If requested by the Company, the Executive
will provide the Company with written 

 

14

 

confirmation that all
such materials have been delivered to the Company as provided herein.

 

6.2           Non-Solicitation or Hire. 
During the Term and for a period of twenty-four (24) months following
the Executive’s Separation of Service with the Company for any reason, the
Executive shall not solicit or attempt to solicit or induce, directly or
indirectly: (a) any person or entity who is a customer of the Company or
its subsidiaries, or who was a customer of the Company or its subsidiaries at
any time during the twelve (12) month period immediately prior to the date the
Executive’s employment terminates for any reason, to market, sell or provide to
any such person or entity any services or products offered by or available from
the Company or its subsidiaries (provided that if the Executive intends to
solicit any such person or entity for any other purpose, he shall notify the
Company of such intention and receive prior written approval from the Company);
(b) any supplier to the Company or any subsidiary to terminate, reduce or
alter negatively its relationship with the Company or any subsidiary or in any
manner interfere with any agreement or contract between the Company or any
subsidiary and such supplier; or (c) any employee of the Company or any of
its subsidiaries or any person who was an employee of the Company or any of its
subsidiaries during the twelve (12) month period immediately prior to the date
the Executive’s employment terminates for any reason, to terminate such
employee’s employment relationship with the Protected Parties in order, in
either case, to enter into a similar relationship with the Executive or any
other person or any entity in competition with the Business of the Company or
any of its subsidiaries.

 

6.3           Non-Competition.  During the
Term and following the Executive’s Separation from Service with the Company for
any reason, Executive, for the greater of eighteen (18) months or the period in
which the Company is making payments to the Executive in accordance with
sections 5.2, 5.3, 5.4 and 5.5 above, shall not, whether individually, as a
Director, Manager, member, stockholder, partner, owner, employee, consultant or
agent of any business, or in any other capacity, other than on behalf of the
Company or its subsidiaries, directly or indirectly organize, establish, own,
operate, manage, control, engage in, participate in, invest in, permit his name
to be used by, act as a consultant or advisor to, render services which are
materially similar to his services provided to the Company under this Agreement
for, alone or in association with any person, firm, corporation or business
organization, including but not limited to Baxter, CSL, Octapharma, Grifols,
Biotest, Kedrion, Kamada and Sanguine or otherwise assist any person or entity
that engages in or owns, invests in, operates, manages or controls any venture
or enterprise which engages or proposes to engage in any business conducted by
the Company or any of its subsidiaries on the date of the Executive’s
termination of employment or within eighteen (18) months of the Executive’s
termination of employment in the geographical areas of: (i) Johnston and
Wake Counties, North Carolina; (ii) the State of North Carolina; (iii) the
states of Pennsylvania, California, New York and Florida; (iv) the United
States of America; and (v) any geographic locations where the Company and
its subsidiaries engage, in such business (the “Business”).  Notwithstanding the 

 

15

 

foregoing, nothing in
this Agreement shall prevent the Executive from owning for passive investment
purposes not intended to circumvent this Agreement, less than five percent (5%)
of the publicly traded common equity securities of any company engaged in the
Business (so long as the Executive has no power to manage, operate, advise,
consult with or control the competing enterprise and no power, alone or in conjunction
with other affiliated parties, to select a director, manager, general partner,
or similar governing official of the competing enterprise other than in
connection with the normal and customary voting powers afforded the Executive
in connection with any permissible equity ownership).

 

6.4           Property.  The Executive
acknowledges that all originals and copies of materials, records and documents
generated by him or coming into his possession during his employment by the
Company or its subsidiaries are the sole property of the Company and its
subsidiaries (“Company Property”). 
During the Term, and at all times thereafter, the Executive shall not
remove, or cause to be removed, from the premises of the Company or its
subsidiaries, copies of any record, file, memorandum, document, computer
related information or equipment, or any other item relating to the business of
the Company or its subsidiaries, except in furtherance of his duties under the
Agreement.  When the Executive’s
employment with the Company terminates for any reason, or upon request of the
Company at any time, the Executive shall promptly deliver to the Company all
copies of Company Property in his possession or control.

 

6.5           Sections 6.1, 6.2, 6.3 and 6.4 of this Agreement,
including each provision within those sections, are independent and
severable.  In the event that a court of
competent jurisdiction finds any provision of Sections 6.1, 6.2, 6.3 and 6.4 of
this Agreement to be overbroad or unenforceable for any reason, Executive and
Company hereby specifically agree and request that the court modify each such
provision in a manner that will make each such provision enforceable to the
maximum extent allowed by law.

 

16

 

7.             Remedies;
Specific Performance.  The Parties
acknowledge and agree that the Executive’s breach or threatened breach of any
of the restrictions set forth in Section 6 will result in irreparable and
continuing damage to the Protected Parties for which there may be no adequate
remedy at law and that the Protected Parties shall be entitled to equitable
relief, including specific performance and injunctive relief as remedies for
any such breach or threatened or attempted breach.  The Executive also agrees that such remedies
shall be in addition to any and all remedies, including damages, available to
the Protected Parties against him for such breaches or threatened or attempted
breaches.  In addition, without limiting
the Protected Parties’ remedies for any breach of any restriction on the
Executive set forth in Section 6, except as required by law, the Executive
shall not be entitled to any payments set forth in Section 5.2, 5.3, 5.4
and 5.5 hereof if the Executive has breached the covenants applicable to the
Executive contained in Section 5.9 or 6. 
The Executive will immediately return to the Protected Parties any such
payments previously received under Sections 5.2, 5.3, 5.4 and 5.5 upon such a
breach, and, in the event of such breach, the Protected Parties will have no
obligation to pay any of the amounts that remain payable by the Company under
Sections 5.2, 5.3, 5.4 and 5.5.

 

8.             Indemnification. 
The Company agrees, to the extent permitted by applicable law and its
organizational documents, to indemnify, defend and hold harmless the Executive
from and against any and all losses, suits, actions, causes of action,
judgments, damages, liabilities, penalties, fines, costs or claims of any kind
or nature (“Indemnified Claim”), including reasonable legal fees and related
costs incurred by Executive in connection with the preparation for or defense
of any Indemnified Claim, whether or not resulting in any liability, to which
Executive may become subject or liable or which may be incurred by or assessed
against Executive, relating to or arising out of his employment by the Company
or the services to be performed pursuant to this Agreement, provided that: (i) the
Company shall only defend but not indemnify or hold Executive harmless from and
against an Indemnified Claim in the event there is a final, non-appealable
determination that Executive’s liability with respect to such Indemnified Claim
resulted from Executive’s gross misconduct or gross negligence; and (ii) in
the event that the Executive’s actions, inactions, decisions or directions
which gave rise to the Indemnified Claim were outside the scope of his
authority or were plainly contrary to instructions provided him by the Board
then the Company shall not be obligated to either defend or indemnify Executive
for the Indemnified Claim and its responsibilities under this section of the
Agreement are null and void.

 

9.             Other Provisions.

 

9.1           Notices.  Any notice or
other communication required or which may be given hereunder shall be in
writing and shall be delivered personally, telegraphed, telexed, sent by
facsimile transmission or sent by certified, registered or express mail,
postage prepaid or overnight mail and shall be deemed given when so delivered
personally, telegraphed, telexed, or sent by facsimile transmission or, if
mailed, four (4) days after the date of mailing or one (1) day after
overnight mail, as follows:

 

17

 

If
the Company, to:

 

Attn.:
General Counsel

P.O. Box 13887

79 TW Alexander Drive

4101 Research Commons

Research Triangle Park

Raleigh, NC 27709

Fax: (919) 316-6669

 

If
the Executive, to:

 

Executive’s
home address reflected in the Company’s records.

 

9.2           Entire Agreement.  This
Agreement contains the entire agreement between the Parties with respect to the
subject matter hereof and supersedes all prior agreements, written or oral,
with respect thereto.

 

9.3           Representations and Warranties by Executive. 
The Executive represents and warrants that he is not a party to or
subject to any restrictive covenants, legal restrictions or other agreements in
favor of any entity or person which would in any way preclude, inhibit, impair
or limit the Executive’s ability to perform his obligations under this
Agreement, including, but not limited to, non-competition agreements,
non-solicitation agreements or confidentiality agreements.

 

9.4           Waiver and Amendments.  This
Agreement may be amended, modified, superseded, canceled, renewed or extended,
and the terms and conditions hereof may be waived, only by a written instrument
signed by the Parties or, in the case of a waiver, by the party waiving
compliance.  No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any right, power or
privilege hereunder, nor any single or partial exercise of any right, power or
privilege hereunder, preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.

 

9.5           Governing Law, Dispute Resolution and Venue (a) This Agreement shall be
governed and construed in accordance with the laws of the State of North
Carolina. (b) The parties agree irrevocably to submit to the exclusive
jurisdiction of the United States Federal District Court of North Carolina,
Eastern Division, or if no federal jurisdiction exists, to the state courts
located in the city of Raleigh, North Carolina for the purposes of any suit,
action or other proceeding brought by any party arising out of any breach of
any of the provisions of this Agreement and hereby waive, and agree not to
assert by way of motion, as a defense or otherwise, in any such suit, action,
or proceeding, any claim that it is not personally subject to the jurisdiction
of the above-named courts, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding 

 

 

18

 

is improper, or that the
provisions of this Agreement may not be enforced in or by such courts.  In addition, the parties agree to the waiver
of a jury trial.

 

9.6           Assignability by the Company and the Executive. 
This Agreement, and the rights and obligations hereunder, may not be
assigned by the Company or the Executive without written consent signed by the
other party; provided that the Company may assign the Agreement to any
successor that continues the business of the Company.

 

9.7           Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same instrument.

 

9.8           Headings.  The headings
in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning of terms contained herein.

 

9.9           Severability.  If any term,
provision, covenant or restriction of this Agreement, or any part thereof, is
held by a court of competent jurisdiction of any foreign, federal, state,
county or local government or any other governmental, regulatory or
administrative agency or authority to be invalid, void, unenforceable or
against public policy for any reason, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected or impaired or invalidated.  The Executive acknowledges that the
restrictive covenants contained in Section 6 are a condition of this
Agreement and are reasonable and valid in temporal scope and in all other
respects.

 

9.10         Tax Withholding.  The Company
or other payor is authorized to withhold from any benefit provided or payment
due hereunder, the amount of withholding taxes due any federal, state or local
authority in respect of such benefit or payment and to take such other action
as may be necessary in the opinion of the Board to satisfy all obligations for
the payment of such withholding taxes. 
The Executive is solely responsible for the payment of any tax liability
(including any taxes and penalties arising under Code Section 409A) that
Executive incurs as a result of any payments or benefits that the Executive
receives pursuant to this Agreement.  The
Company shall not have any obligation to pay the Executive for any such tax
liabilities if, at the time of Executive’s Separation from Service, the
Executive is a “specified employee” (within the meaning of Code Section 409A
and Treas. Reg. §1.409A-3(i)(2)), the Company will not pay or provide any “Specified
Benefits” (as defined herein) during the six-month period (the “409A Suspension
Period”) beginning immediately after the Executive’s Separation from Service.  For purposes of this Agreement, “Specified
Benefits” are any amounts or benefits that would be subject to Section 409A
penalties if the Company were to pay them, pursuant to this Agreement, on
account of the Executive ‘s Separation from Service.  Within 14 calendar days after the end of the
409A Suspension Period, the Company will make a lump-sum payment to the
Executive, in cash, in an amount equal to any payments and benefits that the
Company does not make on account of the 409A Suspension Period.  At the close of the 409A Suspension 

 

19

 

Period, the Executive
will receive any remaining payments and benefits due pursuant to Section 4
in accordance with the terms of that Section (as if there had not been any
suspension beforehand).  Notwithstanding
the foregoing, in the event that this Agreement or any payment or benefit paid
to the Executive hereunder is deemed to be subject to Section 409A of the
Code, Executive and the Company agree to negotiate in good faith to adopt such
amendments that are necessary to comply with Section 409A of the Code or
to exempt such payments or benefits from Section 409A of the Code.

 

IN WITNESS WHEREOF, the Parties hereto, intending to
be legally bound hereby, have executed this Agreement.

 

	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Lawrence D. Stern

  	
   

  
	
   

  	
  Name:

  	
  Lawrence
  D. Stern

  	
   

  
	
   

  	
  Title:

  	
  Chairman
  and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  December 19,
  2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Talecris
  Biotherapeutics Holdings Corp

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  W. Brett Ingersoll

  	
   

  
	
   

  	
  Name:

  	
  W.
  Brett Ingersoll

  	
   

  
	
   

  	
  Title:

  	
  Chairman,
  Compensation Committee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  December 30, 2008

  	
   

  

 

Executive’s Separation from Service, the Executive
is a “specified employee” (within the meaning of Code Section 409A and
Treas. Reg. § 1.409A-3(i)(2)), the Company will not pay or provide any “Specified
Benefits” (as defined herein) during the six-month period (the “409A Suspension
Period”) beginning immediately after the Executive’s Separation from
Service.  For purposes of this Agreement,
“Specified Benefits” are any amounts or benefits that would be subject to Section 409A
penalties if the Company were to pay them, pursuant to this Agreement, on
account of the Executive ‘s Separation from Service.  Within 14 calendar days after the end of the
409A Suspension Period, the Company will make a lump-sum payment to the
Executive, in cash, in an amount equal to any payments and benefits that the
Company does not make on account of the 409A Suspension Period.  At the close of the 409A Suspension Period,
the Executive will receive any remaining payments and benefits due pursuant to Section 4
in accordance with the terms of that Section (as if there had not been any
suspension beforehand).  Notwithstanding
the foregoing, in the event that this Agreement or any payment or benefit paid
to the Executive hereunder is deemed to be subject to Section 409A of the
Code, Executive and the Company agree to negotiate in good faith to adopt such
amendments that are necessary to comply with Section 409A of the Code or
to exempt such payments or benefits from Section 409A of the Code.

 

IN WITNESS WHEREOF, the Parties hereto, intending to
be legally bound hereby, have executed this Agreement.

 

20

 

TALECRIS BIOTHERAPEUTICS
HOLDINGS CORP.

 

2005 STOCK OPTION AND
INCENTIVE PLAN

 

STOCK OPTION AWARD
AGREEMENT

 

This Stock Option Award
Agreement (this “Option Award Agreement”) is
effective as of                            
(the “Grant Date”), by and between Talecris Biotherapeutics Holdings Corp. a
Delaware corporation (the “Company”),
and the grantee named on the signature page hereof (the “Grantee”) pursuant to the Talecris
Biotherapeutics Holdings Corp. 2005 Stock Option and Incentive Plan (the “Plan”).  Capitalized terms not defined in this Option
Award Agreement have the meanings ascribed to them in the Plan.

 

1.                                      Grant
of Stock Option.  Pursuant to the
terms and conditions set forth in Schedule A hereto, this Option Award
Agreement and the Plan, the Company hereby grants to the Grantee an option to
purchase (“Option”) all or any part of the aggregate of the shares of the
Company’s Common Stock (the “Shares”)
set forth in Schedule A hereto at a purchase price per Share as set forth in
Schedule A hereto (the “Option Exercise Price”).  If an executed copy of
this Option Award Agreement is not returned to the Company within ten business
days after the date hereof, the grant of Options hereunder shall be null and
void, unless the Company determines, in its sole discretion, that any delay was
for good cause.  This Option
is intended to be a non-qualified stock option, and is not intended to qualify
as an Incentive Stock Option.

 

2.                                      Term
of Option.  This Option
shall expire on the tenth (10) anniversary of the Grant Date (the “Expiration Date”) and must be
exercised, if at all, on or before the earlier of the Expiration Date or the
date on which this Option is earlier terminated in accordance with the
provisions of Section 4 of this Option Award Agreement.

 

3.                                      Vesting.

 

3.1                                 Performance-Based
Vesting.  The Grantee shall vest in the
specified number of Options as set forth in Schedule A hereto subject to
performance-based objectives subject to this Section 3.1 (“Performance-Based
Options”).  The Performance-Based Options
will vest and become exercisable based on the achievement of the Company’s
annual performance objectives for each of the four years ending on April 1
following the Grant Date (“Annual Objectives”)
as established each year by the Board of Directors (“Board”) for all
optionees.  Annual Objectives shall
normally be based upon achievement of budgeted EBITDA and Free Cash Flow for
the fiscal year.

 

(a)                                  Annual
Objectives.  For a given
fiscal year, where the Annual Objectives are met: (i) the portion of the Performance-Based
Options allocated to such fiscal year shall vest on April 1st of the
subsequent fiscal year, if Grantee is Executive Chairman or Chairman and Chief
Executive Officer on such date (As used herein, all references to the position
of “EC/CEO” shall include the position of Executive Chairman and Chairman and
Chief Executive Officer.) ; (ii) in the event of the termination of
Grantee’s role as EC/CEO or employment for Cause prior to the April 1st of
the subsequent fiscal year, then the portion of the Performance-Based 

 

 

Options allocated to the
fiscal year in which such termination occurs shall vest on a pro-rata basis for
such part of that year that the Grantee was EC/CEO (based upon the number of
days Grantee was employed by the Company as EC/CEO during such calendar year
divided by 365); (iii) in the event of the termination of Grantee’s role
as EC/CEO other than for Cause, then all Performance-Based Options scheduled to
vest on the first April 1 following such termination shall vest on such April 1
if Grantee remains a Key Person as of such date or if such termination was by
reason of death or disability and in addition a pro-rata share of the
Performance-Based Options scheduled to vest on the second April 1
following such termination shall vest on the date that is one year following
such termination (“Termination Anniversary”) if Grantee remains a Key Person as
of such date or if such termination was by reason of death or disability (based
upon the number of days from the second April 1 to the Termination
Anniversary) but no Options scheduled to vest more than one year after such
termination shall vest even if Grantee maintains his status as a Key Person
through the scheduled vesting date. 
Where the Annual Objectives for such fiscal year are not met, the
portion of the Performance-Based Options allocated to such fiscal year shall be
forfeited, unless the Board in its sole discretion determines that all or a
portion of the Performance-Based Option allocated to such fiscal year shall
vest upon meeting further conditions as defined by the Board.  (As used herein, all references to the
position of “EC/CEO” shall include the position of Executive Chairman and
Chairman and Chief Executive Officer.)

 

(b)                                 Determination
by Board.  The Board
shall, in its sole discretion, determine whether the Annual Objectives have
been met or exceeded.

 

(c)                                  Adjustments to
Annual Objectives.  The Board
may, in its sole discretion, make appropriate adjustments to Annual Objectives
for changes in, or in the timing of, major capital growth projects,
acquisitions, mergers and joint ventures, and quality of earnings adjustments,
or other such factors as determined in good faith by the Board.

 

3.2                                 Time-Based
Vesting.  The Grantee shall vest in the
specified number of Options as set forth in Schedule A hereto subject to this Section 3.1
(“Time-Based Options”).  If Grantee is
EC/CEO on such dates, Time-Based Options shall vest and become exercisable in
four equal installments on April 1, 2008 and the subsequent three
anniversaries of that date.  In the event
of the termination of Grantee’s role as EC/CEO or employment for Cause as
defined in Grantee’s employment agreement with the Company renewed as of April 1,
2007, then a pro-rata share of the Time-Based Options scheduled to vest on the April 1
following such termination shall vest on the termination date (based upon the
number of days Grantee was employed by the Company as EC/CEO since the previous
April 1 divided by 365).  In the
event of the termination of Grantee’s role as EC/CEO or employment is
terminated by reason of death or disability, then all Time-Based Options
scheduled to vest on the first April 1 following such termination and in
addition a pro-rata share of the Time-Based Options scheduled to vest on the
second April 1 following such termination (based upon the number of days
from the second April 1 to the Termination Anniversary) shall vest
immediately.  In the event of the
termination of Grantee’s role as EC/CEO other than for Cause, death or
disability, then all Time-Based 

 

23

 

Options
scheduled to vest on the first April 1 following such termination shall
vest on such April 1 if Grantee remains a Key Person as of such date and
in addition a pro-rata share of the Time-Based Options scheduled to vest on the
second April 1 following such termination shall vest on the Termination
Anniversary if Grantee remains a Key Person as of such date (based upon the
number of days from the second April 1 to the Termination Anniversary) but
no Options scheduled to vest more than one year after such termination shall
vest even if Grantee maintains his status as a Key Person through the scheduled
vesting date.

 

3.3                                 Change in
Control.  Provided that no Termination
of Grantee’s status as a Key Person has taken place prior to the effective
date, upon a Change in Control as provided in Section 3.6 of the Plan, any
unvested Time Based Options shall become fully vested but only if such Change
in Control occurs after March 31, 2008.

 

3.4                                 Non-Vested
Options.  This Option shall be
exercisable to the extent (and only to the extent) that it has vested.  Except as provided above, this Option shall
cease to vest if either Grantee ceases to hold the role of EC/CEO or upon
Grantee’s Termination of Key Person status, and may be exercised after Grantee’s
Termination of Grantee’s Key Person status only as set forth in Section 4
below.  Any portion of this Option that
does not vest, whether due to change in role from EC/CEO, termination of Key
Person status, or otherwise, will not be exercisable and will be forfeited.

 

4.                                      Exercise
of Options Following Termination of Grantee’s Key Person Status.

 

4.1                                 Termination of
Grantee’s Key Person Status as a Result of Voluntary Resignation or for Any
Reason Other than Death, Disability, or Retirement.  Upon Grantee’s Termination of Grantee’s Key
Person status as a result of voluntary resignation or for any reason other than
death, Disability, or Retirement (including for Cause), this Option, to the
extent (and only to the extent) that it is vested on the date of Termination of
Grantee’s Key Person status, may be exercised by Grantee no later than 90 days
after the date of such Termination of Grantee’s Key Person status, but in no
event later than the Expiration Date.

 

4.2                                 Termination of
Grantee’s Key Person Status Because of Death, Disability or Retirement.  Upon Grantee’s Termination of Key Person
status because of death, Disability or Retirement (or upon Grantee’s death
within ninety (90) days after Termination of Grantee’s Key Person status
because of Disability or Retirement), this Option, to the extent (and only to
the extent) that it is vested on the date of Termination of Grantee’s Key
Person status, may be exercised by Grantee (or Grantee’s legal representative
or authorized assignee) no later than eighteen (18) months after the date of
such Termination of Grantee’s Key Person status, but in no event later than the
Expiration Date.

 

5.                                      Exercise
and Restriction.

 

5.1                                 Stock Option
Exercise Agreement.  To exercise
this Option, Grantee (or in the case of exercise after Grantee’s death, Grantee’s
executor, administrator, heir or legatee, as the case may be) must deliver to
the Company an executed stock option exercise agreement in the form attached
hereto as Exhibit A, or in such other form as may be required by 

 

24

 

the
Company from time to time (the “Exercise Agreement”),
which shall set forth, inter  alia, Grantee’s election to exercise
this Option, the number of Shares being purchased, any restrictions imposed on
the Shares and any representations, warranties and agreements regarding Grantee’s
investment intent and access to information as may be required by the Company
to comply with applicable securities laws. 
If a person other than Grantee exercises this Option, then such person
must submit documentation reasonably acceptable to the Company that such person
has the right to exercise this Option.

 

5.2                                 Limitations on
Exercise.  This Option
may not be exercised unless such exercise is in compliance, to the reasonable
satisfaction of the Committee, with all applicable federal and state securities
laws, as they are in effect on the date of exercise.  This Option may not be exercised as to fewer
than 100 Shares unless it is exercised as to all Shares as to which this Option
is then exercisable.

 

5.3                                 Payment.  The Exercise Agreement shall be accompanied
by full payment for the Shares being purchased (the “Exercise
Price”) in cash (by check), or, if authorized by the Committee in
its sole discretion, the Company may accept payment (i) in outstanding
shares of stock, or (ii) by delivery of an unconditional and irrevocable
undertaking by a broker to deliver promptly to the Company sufficient funds to
pay the exercise price.

 

5.4                                 Tax Withholding.  Prior to the issuance of the Shares upon
exercise of this Option, Grantee must pay any applicable federal or state
withholding obligations of the Company.

 

5.5                                 Issuance of
Shares.  As promptly as is practicable
after the receipt of the Exercise Agreement, in form and substance satisfactory
to counsel for the Company, payment of the Exercise Price and satisfaction of
applicable withholding requirements, and execution by the Grantee of the
Stockholders Agreement applicable to all Grantees if requested by the Company,
the Company shall issue the Shares registered in the name of Grantee, Grantee’s
authorized assignee, or Grantee’s legal representative, and shall deliver
certificates representing the Shares with the appropriate legends affixed thereto.  The Company may postpone such delivery until
it receives satisfactory proof that the issuance of such Shares will not
violate any of the provisions of the Securities Act of 1933, as amended (the “Securities Act”), or the Securities
Exchange Act of 1934, as amended, any rules or regulations of the
Securities and Exchange Commission promulgated thereunder, or the requirements
of applicable state law relating to authorization, issuance or sale of
securities, or until there has been compliance with the provisions of such acts
or rules.  Grantee understands that the
Company is under no obligation to register or qualify the Shares with the SEC,
any state securities commission or any stock exchange to effect such compliance.

 

5.6                                 Competitive or
Detrimental Activity.  If at any
time within eighteen months after the date on which the Grantee exercises the
Option Grantee engages in any activity determined in the sole discretion of the
Company to be in violation of any non-competition agreement or covenant between
the Grantee and the Company (or any Related Entity), then any gain realized by
Grantee from the exercise of the Option (“Gain”)
shall be paid by Grantee to the Company upon notice from the Company.  Such Gain shall be determined as of the date
of the Option exercise as the difference between the aggregate exercise price
of such 

 

25

 

Shares
and the Fair Market Value of such Shares on their respective Option exercise
dates without regard to any subsequent change in the Fair Market Value of a
Share.

 

6.                                      Nontransferability
of Option.  This Option may
not be sold, assigned, pledged, hypothecated, loaned or otherwise transferred
in any manner other than by will or by the laws of descent and distribution and
may be exercised during the lifetime of Grantee only by Grantee.

 

7.                                      Purchase
for Purpose of Investment.

 

In the event Grantee exercises the Option prior to
an initial public offering by the Company or counsel to the Company otherwise
determines that such representations and legends are required by law:

 

7.1                                 Investment
Intent at Grant.  Grantee
represents and agrees that at the time of grant the Shares to be acquired upon
exercising this Option will be acquired for investment, and not with a view to
the sale or distribution thereof.

 

7.2                                 Investment
Intent at Exercise.  In the
event that the sale of Shares under the Plan is not registered under the
Securities Act but an exemption is available which requires an investment
representation or other representation, the Grantee shall represent and agree
at the time of exercise that the Shares being acquired upon exercising this
Option are being acquired for investment, and not with a view to the sale or
distribution thereof, and shall make such other representations as are deemed
necessary or appropriate by the Company and its counsel.

 

7.3                                 Legends.  If the Company chooses to deliver
certificates to evidence the Shares purchased under this Agreement in an
unregistered transaction all such certificates shall bear the following legend
(and such other restrictive legends as are required or deemed advisable under
the provisions of any applicable law):

 

“THE
SHARES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT’), OR THE SECURITIES
LAWS OF ANY OTHER JURISDICTION, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL (A) REGISTERED UNDER
THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION, OR (B) IN
THE OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO TALECRIS
BIOTHERAPEUTICS HOLDINGS CORP., SUCH OFFER, SALE, TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.

 

THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A REPURCHASE RIGHT IN
FAVOR OF THE 

 

26

 

COMPANY
OR ITS ASSIGNEE AS SET FORTH IN THE STOCK OPTION AWARD AGREEMENT, DATED
                                       BETWEEN                                          AND
TALECRIS BIOTHERAPEUTICS HOLDINGS CORP. SUCH REPURCHASE RIGHT IS BINDING ON
TRANSFEREES OF THE SHARES REPRESENTED BY THIS CERTIFICATE.”

 

7.4                                 Removal of
Legends.  If, in the opinion of the
Company and its counsel, any legend placed on a stock certificate representing
Shares sold under this Agreement is no longer required, the holder of such
certificate shall be entitled to exchange such certificate for a certificate
representing the same number of Shares but without such legend.

 

7.5                                 Administration.  Any determination by the Company and its
counsel in connection with any of the matters set forth in this Section 7
shall be conclusive and binding on the Employee and all other persons.

 

8.                                      Right
of Offset.  The Company
shall have the right to offset against the obligation to deliver Shares in
respect of any exercise of an Option, any outstanding amounts then owed by
Grantee to the Company.

 

9.                                      Privileges
of Stock Ownership.  Grantee shall
not have any of the rights of a stockholder of the Company with respect to any
Shares until the Shares are issued to Grantee and no adjustment shall be made
for cash distribution in respect of such Shares for which the distribution date
(or record date, in the event the Company becomes a corporation) is prior to the
date upon which such Grantee or permitted transferee shall become the holder of
record thereof.

 

10.                               Entire
Agreement.  The Plan is
incorporated herein by reference.  This
Agreement, the Plan, the Exercise Agreement, the Stockholders’ Agreement and
such other documents as may be executed in connection with the exercise of this
Option constitute the entire agreement and understanding of the parties hereto
with respect to the subject matter hereof and supersede all prior
understandings and agreements with respect to such subject matter.  Any action taken or decision made by the
Committee arising out of or in connection with the construction,
administration, interpretation or effect of this Agreement shall lie within its
sole discretion, as the case may be, and shall be final, conclusive and binding
on the Grantee and all persons claiming under or through the Grantee.

 

11.                               No
Obligation to Employ.  Nothing in the
Plan or this Agreement shall confer on Grantee any right to continue in the
employ of, or other relationship with, the Company or any Related Entity,
including Grantee’s Key Person status, or limit in any way the right of the
Company or any Related Entity to terminate Grantee’s employment, Key Person
status, or other relationship at any time, with or without Cause.

 

27

 

12.                               Notices.  Any notice required to be
given or delivered to the Company under the terms of this Agreement shall be in
writing and addressed to the Corporate Secretary of the Company at its
principal corporate offices.  Any notice
required to be given or delivered to Grantee shall be in writing and addressed
to Grantee at the address indicated below or to such other address as such
party may designate in writing from time to time to the Company.  All notices shall be deemed to have been
given or delivered upon: personal delivery; three (3) days after deposit
in the United States mail by certified or registered mail (return receipt
requested); one (1) business day after deposit with any return receipt
express courier (prepaid); or one (1) business day after transmission by
facsimile.

 

13.                               Successors
and Assigns.  The Company may
assign any of its rights under this Agreement. 
This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Company. 
Subject to the restrictions on transfer set forth herein, this Agreement
shall be binding upon Grantee and Grantee’s heirs, executors, administrators,
legal representatives, successors and assigns.

 

14.                               Governing
Law.  This Agreement
shall be governed by and construed in accordance with the internal laws of the
State of New York without regard to that body of law pertaining to choice of
law or conflict of law.

 

IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the date noted above.

 

TALECRIS
BIOTHERAPEUTICS HOLDINGS CORP.

 

	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
      [Grantee]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Grantee’s
  Address]

  	
   

  
				

 

28

 

Schedule A

 

TERMS OF OPTION GRANT

 

Grantee Name:  Lawrence D. Stern

 

Grant Date:         

 

Total Number of Shares Underlying
the Option:          

 

Option Exercise Price: $

 

Number of shares underlying
Performance Based Options (65%)          

 

Number of shares underlying Time Based Options (35%)                 

 

29

 

Exhibit A

 

TALECRIS BIOTHERAPEUTICS HOLDINGS
CORP.

2005 STOCK OPTION AND INCENTIVE PLAN (the “Plan”)

STOCK OPTION EXERCISE AGREEMENT

 

I hereby elect to purchase the number of shares of
Common Stock of Talecris Biotherapeutics Holdings Corp (the “Company”) as set forth below:

 

	
  Grantee:                                                        

  	
  Number of Shares
  Purchased:                       

  
	
   

  	
   

  
	
  Social Security Number:                              

  	
  Purchase Price per Share:                              

  
	
   

  	
   

  
	
  Address:                                                       

  	
  Aggregate Purchase Price:                             

  
	
   

  	
   

  
	
                                                                       

  	
  Date of Option Award
  Agreement:               

  
	
   

  	
   

  
	
                                                                       

  	
   

  
	
   

  	
   

  
	
  Type of Option:
  Nonqualified Stock Option

  	
  Exact Name of Title to
  Shares:                      

  
	
   

  	
   

  
	
   

  	
                                                                         

  

 

1.                                      Delivery
of Purchase Price.  Grantee hereby
delivers to the Company the Exercise Price, either in cash (by check) in the
amount of $            receipt
of which is acknowledged by the Company, or by some other method as approved by
the Company in its sole discretion;

 

2.                                      Payment
of Withholding Tax.  Grantee hereby
delivers to the Company the amount necessary to satisfy any withholding tax
obligations of the Company in cash (by check) in the amount of $               ,
receipt of which is acknowledged by the Company, or by some other method as
approved by the Company in its sole discretion.

 

3.                                      Representations.  In the event Grantee
exercises the Option prior to an initial public offering by the Company or
counsel to the Company otherwise determines that such representations and
legends are required by law in connection with the exercise of the Option,
Grantee hereby represents to the Company as follows:

 

(a)                                  Grantee is
acquiring the Shares solely for investment purposes, with no present intention
of distributing or reselling any of the Shares or any interest therein. Grantee
acknowledges that the Shares have not been registered under the Securities Act
of 1933, as amended (the “Securities Act”).

 

(b)                                 Grantee is
aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Shares.

 

30

 

(c)                                  Grantee
understands that the Shares are “restricted securities” under applicable U.S.
federal and state securities laws and that, pursuant to these laws, he or she
must hold the Shares indefinitely unless they are registered with the
Securities and Exchange Commission and qualified by state authorities, or
unless an exemption from such registration and qualification requirements is
available.  Grantee acknowledges that the
Company has no obligation to register or qualify the Shares for resale.  Grantee further acknowledges that if an
exemption from registration or qualification is available, it may be
conditioned on various requirements including, but not limited to, the time and
manner of sale, the holding period for the Shares and requirements relating to
the Company which are outside of Grantee’s control, and which the Company is
under no obligation to and may not be able to satisfy.

 

(d)                                 Grantee
understands that there is no public market for the Shares, that no market may
ever develop for them and that the Shares have not been approved or disapproved
by the Securities and Exchange Commission or any other federal, state or other
governmental agency.

 

(e)                                  Grantee
understands that the Shares are subject to certain restrictions on transfer set
forth in the Plan.  Both the Plan and the
applicable Award Agreement pursuant to which the Option has been granted are
incorporated herein by reference.

 

(f)                                    Grantee
understands that the certificate (if any) representing the Shares will be
imprinted with the following legends:

 

THE SHARES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SHARES OR THE COMPANY RECEIVES AN OPINION OF
COUNSEL FOR THE HOLDER OF THE SHARES, REASONABLY SATISFACTORY TO THE COMPANY,
STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS.

 

THE SHARES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO A REPURCHASE RIGHT IN FAVOR OF THE COMPANY OR
ITS ASSIGNEE AS SET FORTH IN THE STOCK OPTION AWARD AGREEMENT, DATED                       BETWEEN                                   AND
TALECRIS BIOTHERAPEUTICS 

 

31

 

HOLDINGS CORP. SUCH
REPURCHASE RIGHT IS BINDING ON TRANSFEREES OF THE SHARES REPRESENTED BY THIS
CERTIFICATE.”

 

(g)                                 Grantee has
consulted his or her own tax advisors in connection with the exercise of this
Option and is not relying upon the Company for any tax advice.

 

(h)                                 Grantee is
presently an employee of the Company or was an employee within 90 days prior to
exercise (one year if Grantee is no longer an employee due to death or
Disability).

 

4.                                      Legal
Representatives of Grantee.  If Options are
being exercised on behalf of a Grantee, then this Notice must be signed by such
Grantee’s legal representative and must be accompanied by a certificate issued
by an appropriate authority evidencing that the individual signing this Notice
has been duly appointed and is currently serving as the Grantee’s legal
representative under applicable local law governing decedents’ estates.

 

	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature of Grantee

  

 

32

 

Spousal Consent

 

I acknowledge that I have read the foregoing Stock
Option Exercise Agreement (the “Exercise Agreement”),
the Stock Option Award Agreement and the Plan (the “Option
Documents”) and that I know their contents.  I hereby consent to and approve of the
exercise of the Option by my spouse in accordance with the provisions of the
Option Documents, and agree that the shares of the Common Stock of Talecris
Biotherapeutics Holdings Corp. purchased thereunder (the “Shares”) and any
interest I may have in such Shares are subject to all the provisions of the
Option Documents.  I will take no action
at any time to hinder operation of the Exercise Agreement on these Shares or
any interest I may have in or to them.

 

	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
  Signature of Grantee’s Spouse

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Spouse’s Name - Typed or
  Printed

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Grantee’s Name - Typed or Printed

  	
   

  	
   

  

 

33

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