Name of Executive: Erik Birkerts Position: Vice President of Strategic
Initiatives Fiscal Year 2008 Base Salary: $150,000 Fiscal Year 2009 Base Salary:
$155,000
Initial Term: Effective date through March 31, 2009 Renewal Periods are: 1 Year
Post-Change of Control Renewal Period is: 1 Year
Severance Multiplier is: 0.5x Post-Change of Control Severance Multiplier is: 1x

EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT

        This Agreement (“Agreement”) is between the Executive named above
(“Executive”), on the one hand, and Orion Energy Systems, Inc. (“Orion” and,
together with its subsidiaries, the “Company”), on the other.

        WHEREAS, the Executive is employed by Orion in a key employee capacity
and the Executive’s services are valuable to the conduct of the business of the
Company; and

        WHEREAS, Orion and Executive desire to specify the terms and conditions
on which Executive will continue employment on and after the date the Company’s
common stock is first sold to the public pursuant to an effective registration
statement filed under the Securities Act of 1933, as amended (the “IPO”), and
under which Executive will receive severance in the event that Executive
separates from service with the Company;

        NOW, THEREFORE, for good and valuable consideration, the parties agree
as follows:

        1.    Effective Date; Term. This Agreement shall become effective on the
date of the Company’s IPO and continue until the end of the initial term set
forth above. Thereafter, the Agreement shall renew automatically for successive
renewal periods as set forth above unless and until either party provides
written notice to the other party of the intent not to renew the Agreement at
least ninety (90) days prior to the end of any term. Notwithstanding the
foregoing, if a Change of Control occurs prior to the end of any term, the
Agreement shall be automatically extended for the post- Change of Control
renewal period set forth above beginning on the date of the Change of Control.
Expiration of this Agreement will not affect the rights or obligations of the
parties hereunder arising out of, or relating to, circumstances occurring prior
to the expiration of this Agreement, which rights and obligations will survive
the expiration of this Agreement.

        2.     Definitions. For purposes of this Agreement, the following terms
shall have the meanings ascribed to them:

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          (a)     “Accrued Benefits” shall mean the following amounts, payable
as described herein: (i) all base salary for the time period ending with the
Termination Date; (ii) reimbursement for any and all monies advanced in
connection with the Executive’s employment for reasonable and necessary expenses
incurred by the Executive on behalf of the Company for the time period ending
with the Termination Date; (iii) any and all other cash earned through the
Termination Date and deferred at the election of the Executive or pursuant to
any deferred compensation plan then in effect; and (iv) all other payments and
benefits to which the Executive (or in the event of the Executive’s death, the
Executive’s surviving spouse or other beneficiary), including those provided
pursuant to Exhibit A, is entitled on the Termination Date under the terms of
any benefit plan of the Company, excluding severance payments under any Company
severance policy, practice or agreement in effect on the Termination Date.
Payment of Accrued Benefits shall be made promptly in accordance with the
Company’s prevailing practice with respect to clauses (i) and (ii) or, with
respect to clauses (iii) and (iv), pursuant to the terms of the benefit plan or
practice establishing such benefits.

          (b)     “Base Salary” shall mean the Executive’s annual base salary
with the Company as in effect from time to time.

          (c)     “Board” shall mean the board of directors of Orion or a
committee of such Board authorized to act on its behalf in certain
circumstances, including the Compensation Committee of the Board.

          (d)     “Cause” shall mean a good faith finding by the Board that
Executive has (i) failed, neglected, or refused to perform the lawful employment
duties related to his or her position or as from time to time assigned to him
(other than due to Disability); (ii) committed any willful, intentional, or
grossly negligent act having the effect of materially injuring the interest,
business, or reputation of the Company; (iii) violated or failed to comply in
any material respect with the Company’s published rules, regulations, or
policies, as in effect or amended from time to time; (iv) committed an act
constituting a felony or misdemeanor involving moral turpitude, fraud, theft, or
dishonesty; (v) misappropriated or embezzled any property of the Company
(whether or not an act constituting a felony or misdemeanor); or (vi) breached
any material provision of this Agreement or any other applicable
confidentiality, non-compete, non-solicit, general release, covenant not-to-sue,
or other agreement with the Company.

          (e)     “Change of Control” shall mean and be limited to any of the
following:

          (i)     any Person (other than (A) the Company or any of its
subsidiaries, (B) a trustee or other fiduciary holding securities under any
employee benefit plan of the Company or any of its subsidiaries, (C) an
underwriter temporarily holding securities pursuant to an offering of such
securities or (D) a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of stock in the Company (“Excluded Persons”)) is or becomes the
Beneficial Owner, directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any securities
acquired directly from the Company or its Affiliates after the IPO Date,
pursuant to express authorization by the Board that refers to this exception)
representing twenty percent (20%) or more of either the then outstanding shares
of common stock of the Company or the combined voting power of the Company’s
then outstanding voting securities; or

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          (ii)     the following individuals cease for any reason to constitute
a majority of the number of directors of the Company then serving: (A)
individuals who, on the IPO Date, constituted the Board and (B) any new director
(other than a director whose initial assumption of office is in connection with
an actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company, as such
terms are used in Rule 14a-11 of Regulation 14A under the Act) whose appointment
or election by the Board or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on the IPO Date, or
whose appointment, election or nomination for election was previously so
approved (collectively the “Continuing Directors”); provided, however, that
individuals who are appointed to the Board pursuant to or in accordance with the
terms of an agreement relating to a merger, consolidation, or share exchange
involving the Company (or any direct or indirect subsidiary of the Company)
shall not be Continuing Directors for purposes of this Agreement until after
such individuals are first nominated for election by a vote of at least
two-thirds (2/3) of the then Continuing Directors and are thereafter elected as
directors by the shareholders of the Company at a meeting of shareholders held
following consummation of such merger, consolidation, or share exchange; and,
provided further, that in the event the failure of any such persons appointed to
the Board to be Continuing Directors results in a Change of Control, the
subsequent qualification of such persons as Continuing Directors shall not alter
the fact that a Change of Control occurred; or

          (iii)     the consummation of a merger, consolidation or share
exchange of the Company with any other corporation or the issuance of voting
securities of the Company in connection with a merger, consolidation or share
exchange of the Company (or any direct or indirect subsidiary of the Company),
in each case, which requires approval of the shareholders of the Company, other
than (A) a merger, consolidation or share exchange which would result in the
voting securities of the Company outstanding immediately prior to such merger,
consolidation or share exchange continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
or any parent thereof) at least fifty percent (50%) of the combined voting power
of the voting securities of the Company or such surviving entity or any parent
thereof outstanding immediately after such merger, consolidation or share
exchange, or (B) a merger, consolidation or share exchange effected to implement
a recapitalization of the Company (or similar transaction) in which no Person
(other than an Excluded Person) is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its Affiliates after the IPO Date, pursuant to express authorization
by the Board that refers to this exception) representing twenty percent (20%) or
more of either the then outstanding shares of common stock of the Company or the
combined voting power of the Company’s then outstanding voting securities; or

          (iv)     the consummation of a plan of complete liquidation or
dissolution of the Company or a sale or disposition by the Company of all or
substantially all of the Company’s assets (in one transaction or a series of
related transactions within any period of 24 consecutive months), in each case,
which requires approval of the shareholders of the Company, other than a sale or
disposition by the Company of all or substantially all of the Company’s assets
to an entity at least seventy-five percent (75%) of the combined voting power of
the voting securities of which are owned by Persons in substantially the same
proportions as their ownership of the Company immediately prior to such sale.

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Notwithstanding the foregoing, no “Change of Control” shall be deemed to have
occurred if there is consummated any transaction or series of integrated
transactions immediately following which the record holders of the common stock
of the Company immediately prior to such transaction or series of transactions
continue to own, directly or indirectly, in the same proportions as their
ownership in the Company, an entity that owns all or substantially all of the
assets or voting securities of the Company immediately following such
transaction or series of transactions.

For purposes of this Section 2(e):

          (i)     the term “Person” shall mean any individual, firm,
partnership, corporation or other entity, including any successor (by merger or
otherwise) of such entity, or a group of any of the foregoing acting in concert;

          (ii)     the terms “Affiliate” and “Associate” shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations of the Act;

          (iii)     the term “Act” means the Securities Exchange Act of 1934, as
amended; and

          (iv)     a Person shall be deemed to be the “Beneficial Owner” of any
securities which:

  a) such Person or any of such Person’s Affiliates or Associates has the right
to acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding, or
upon the exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of such
Person’s Affiliates or Associates until such tendered securities are accepted
for purchase;

  b) such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has “beneficial ownership” of
(as determined pursuant to Rule l3d-3 of the General Rules and Regulations under
the Act), including pursuant to any agreement, arrangement or understanding;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security under this clause b) as a result of an
agreement, arrangement or understanding to vote such security if the agreement,
arrangement or understanding: (A) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations under the Act and (B) is not also then reportable on a Schedule l3D
under the Act (or any comparable or successor report); or

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  c) are beneficially owned, directly or indirectly, by any other Person with
which such Person or any of such Person’s Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in clause b) above) or
disposing of any voting securities of the Company.

          (f)    “COBRA”shall mean the provisions of Code Section 4980B.

          (g)    “Code” shall mean the Internal Revenue Code of 1986, as
amended, as interpreted by rules and regulations issued pursuant thereto, all as
amended and in effect from time to time. Any reference to a specific provision
of the Code shall be deemed to include reference to any successor provision
thereto.

          (h)    “Competitive Business Activity” shall mean the design and
manufacture of lighting systems and controls for industrial, commercial and
agricultural facilities.

          (i)     “Disability” shall mean, subject to applicable law, a total
and permanent disability consisting of a mental or physical disability which
precludes the disabled Executive from performing the material and substantial
duties of his employment. Payment of benefits for total disability under a
disability insurance policy shall be conclusive as to the existence of total
disability, although such payments are not required in order to establish total
disability for purposes of this Agreement. The Executive has a “total and
permanent disability” if he is precluded by mental or physical disability for
180 days during any twelve (12) month period. For purposes of this Agreement, an
Executive shall be deemed totally and permanently disabled at the end of such
180th day. In case of a disagreement as to whether an Executive is totally and
permanently disabled and, at the request of any party, the matter shall be
submitted to arbitration as provided for herein, and judgment upon the award may
be entered in any court having jurisdiction thereof. Any costs of such
proceedings (including the reasonable legal fees of the prevailing party) shall
be borne by the non-prevailing party to such arbitration.

          (j)    “General Release” shall mean a release of all claims that
Executive, and anyone who may succeed to any claims of Executive, has or may
have against Orion, its board of directors, any of its subsidiaries or
affiliates, or any of their employees, directors, officers, employees, agents,
plan sponsors, administrators, successors (including the Successor),
fiduciaries, or attorneys, including but not limited to claims arising out of
Executive’s employment with, and termination of employment from, the Company,
but excluding claims for (i) severance payments and benefits due pursuant to
this Agreement and (ii) any salary, bonus, equity, accrued vacation, expense
reimbursement and other ordinary payments or benefits earned or otherwise due
with respect to the period prior to the date of any Separation from Service. The
General Release shall be in a form that is reasonably acceptable to the Company
or the Board.

          (k)     “Good Reason” shall mean the occurrence of any of the
following without the consent of Executive: (i) a material diminution in the
Executive’s Base Salary; (ii) a material diminution in the Executive’s
authority, duties or responsibilities; (iii) a material diminution in the
authority, duties or responsibilities of Neal Verfuerth; (iv) a material
diminution in the budget over which the Executive retains authority; (v) a
material change in the geographic location at which the Executive must perform
services; or (vi) a material breach by Orion of any provisions of this Agreement
or any option agreement with the Company to which the Executive is a party.

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          (l)     “Separation from Service” shall mean Executive’s termination
of employment from Orion and each entity that is required to be included in
Orion’s controlled group of corporations within the meaning of Code Section
414(b), or that is under common control with Orion within the meaning of Code
Section 414(c); provided that the phrase “at least 50 percent” shall be used in
place of the phrase ” at least 80 percent” each place it appears therein or in
the regulations thereunder (collectively, “409A affiliates”). Notwithstanding
the foregoing:

          (i)     If Executive takes a leave of absence for purposes of military
leave, sick leave or other bona fide leave of absence, Executive will not be
deemed to have incurred a Separation from Service for the first six (6) months
of the leave of absence, or if longer, for so long as Executive’s right to
reemployment is provided either by statute or by contract.

          (ii)     Subject to paragraph (i), Executive shall incur a Separation
from Service when the level of bona fide services provided by Executive to Orion
and its 409A affiliates permanently decreases to a level of twenty percent (20%)
or less of the level of services rendered by Executive, on average, during the
immediately preceding 12 months of employment.

          (iii)     If, following Executive’s termination of employment,
Executive continues to provide services to the Company or a 409A Affiliate in a
capacity other than as an employee, Executive will not be deemed to have
Separated from Service as long as Executive is providing bona fide services at a
rate that is greater than twenty percent (20%) of the level of services rendered
by Executive, on average, during the immediately preceding 12 months of service.

          (m)    “Severance Payment” shall mean the Executive’s Base Salary at
the time of the Termination Date plus the average of the annual bonuses earned
by the Executive with respect to each of the three completed fiscal years of the
Company preceding the year in which the Termination Date occurs (or such lesser
number of fiscal years for which the Executive was employed by the Company, with
any partial year’s bonus being annualized with respect to such fiscal year)
multiplied by the severance multiplier set forth above; provided thatif
Executive’s Termination Date occurs on or following a Change of Control, the
multiplier described above shall be increased to the post-Change of Control
severance multiplier set forth above and any reduction in Executive’s Base
Salary since the date of the Change of Control shall be ignored.

          (n)    “Successor” shall mean the person to which this Agreement is
assigned upon a Sale of Business within the meaning of Section 10.

          (o)     “Termination Date” shall mean the date of the Executive’s
termination of employment from the Company, as further described in Section 4.

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        3.    Employment of Executive

          (a)    Position.

          (i)     Executive shall serve in the position set forth above in a
full-time capacity. In such position, Executive shall have such duties and
authority as is customarily associated with such position and shall have such
other titles and duties, consistent with Executive’s position, as may be
assigned from time to time by the Board.

          (ii)     Executive will devote Executive’s full business time and best
efforts to the performance of Executive’s duties hereunder and will not engage
in any other business, profession or occupation for compensation or otherwise
which would conflict or interfere with the rendition of such services either
directly or indirectly, without the prior written consent of the Board; provided
that nothing herein shall preclude Executive, subject to the prior approval of
the Board, from accepting appointment to or continue to serve on any board of
directors or trustees of any business organization or any charitable
organization; further provided in each case, and in the aggregate, that such
activities do not conflict or interfere with the performance of Executive’s
duties hereunder or conflict with Section 7.

          (b)    Base Salary. Orion shall pay Executive a Base Salary at the
respective annual rates set forth above for Fiscal Year 2008 and Fiscal Year
2009, payable in regular installments in accordance with the Company’s usual
payroll practices. Executive shall be entitled to such increases in Executive’s
base salary, if any, as may be determined from time to time by the Board.

          (c)    Bonus Incentives. Executive shall be entitled to participate in
such annual and/or long-term cash and equity incentive plans and programs of
Orion as are generally provided to the senior executives of Orion. On and after
a Change of Control, to assure that Executive will have an opportunity to earn
incentive compensation, the Executive shall be included in a bonus plan of the
Employer which shall satisfy the standards described below (such plan, the
“Bonus Plan”). Bonuses under the Bonus Plan shall be payable with respect to
achieving such financial or other goals reasonably related to the business of
the Company as the Company shall establish (the “Goals”), all of which Goals
shall be attainable, prior to the end of the post-Change of Control renewal
period (as set forth above), with approximately the same degree of probability
as the most attainable goals under the Company’s bonus plan or plans as in
effect at any time during the 180-day period immediately prior to the Change of
Control (whether one or more, the “Company Bonus Plan”) and in view of the
Company’s existing and projected financial and business circumstances applicable
at the time. The amount of the bonus (the “Bonus Amount”) that Executive is
eligible to earn under the Bonus Plan shall be no less than 100% of the
Executive’s target award provided in such Company Bonus Plan (such bonus amount
herein referred to as the “Targeted Bonus”), and in the event the Goals are not
achieved such that the entire Targeted Bonus is not payable, the Bonus Plan
shall provide for a payment of a Bonus Amount equal to a portion of the Targeted
Bonus reasonably related to that portion of the Goals which were achieved.
Payment of the Bonus Amount shall not be affected by any circumstance occurring
subsequent to the end of the post-Change of Control renewal period, including
termination of Executive’s employment.

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          (d)    Employee Benefits. Executive shall be entitled to participate
in the Company’s employee benefit plans (other than annual and/or long-term
incentive programs, which are addressed in subsection (c)) as in effect from
time to time on the same basis as those benefits are generally made available to
other senior executives of Orion. On and after a Change of Control, Executive
shall be included: (i) to the extent eligible thereunder (which eligibility
shall not be conditioned on Executive’s salary grade or on any other requirement
which excludes persons of comparable status to the Executive unless such
exclusion was in effect for such plan or an equivalent plan immediately prior to
the Change in Control of the Company), in any and all plans providing benefits
for the Company’s salaried employees in general (including but not limited to
group life insurance, hospitalization, medical, dental, and long-term disability
plans) and (ii) in plans provided to executives of the Company of comparable
status and position to Executive (including but not limited to deferred
compensation, split-dollar life insurance, supplemental retirement, stock
option, stock appreciation, stock bonus, cash bonus and similar or comparable
plans); provided, that, in no event shall the aggregate level of benefits under
the plans described in clause (i) and the plans described in clause (ii),
respectively, in which Executive is included be less than the aggregate level of
benefits under plans of the Company of the type referred to in such clause,
respectively, in which Executive was participating immediately prior to the
Change in Control.

          (e)    Business Expenses. The reasonable business expenses incurred by
Executive in the performance of Executive’s duties hereunder shall be reimbursed
by the Company in accordance with Company policies.

          (f)    Other Perquisites. Executive shall be entitled to receive the
other benefits and perquisites set forth in Exhibit A.

        4.    Termination of Employment. Executive’s employment with the Company
will terminate during the term of the Agreement, and this Agreement will
terminate on the date of such termination, as follows:

          (a)     Executive’s employment will terminate upon Executive’s death.

          (b)     If Executive is Disabled, and if within thirty (30) days after
Orion notifies the Executive in writing that it intends to terminate the
Executive’s employment, the Executive shall not have returned to the performance
of the Executive’s duties hereunder on a full-time basis, Orion may terminate
the Executive’s employment, effective immediately following the end of such
thirty-day period.

          (c)     Orion may terminate Executive’s employment with or without
Cause (other than as a result of Disability which is governed by subsection (b))
by providing written notice to Executive that indicates in reasonable detail the
facts and circumstances alleged to provide a basis for such termination. If the
termination is without Cause, Executive’s employment will terminate on the date
specified in the written notice of termination. If the termination is for Cause,
the Executive shall have thirty (30) days from the date the written notice is
provided, or such longer period as Orion may determine to be appropriate, to
cure any conduct or act, if curable, alleged to provide grounds for termination
of Executive’s employment for Cause. If the alleged conduct or act constituting
Cause is not curable, Executive’s employment will terminate on the date
specified in the written notice of termination. If the alleged conduct or act
constituting Cause is curable but Executive does not cure such conduct or act
within the specified time period, Executive’s employment will terminate on the
date immediately following the end of the cure period. Notwithstanding the
foregoing, a determination of Cause shall only be made in good faith by the
Board, and after a Change of Control, by the Board of Directors of the
Successor, which may terminate Executive for Cause only after providing
Executive (i) written notice as set forth above, (ii) the opportunity to appear
before such board and provide rebuttal to such proposed termination, and (iii)
written notice following such appearance confirming such termination and
certifying that the decision to terminate Executive for Cause was approved in
good faith by at least sixty-six percent (66%) of the members of such board,
excluding Executive. Unless otherwise directed by Orion, from and after the date
of the written notice of proposed termination, Executive shall be relieved of
his or her duties and responsibilities and shall be considered to be on a paid
leave of absence pending any final action by the Board or the Board of Directors
of the Successor confirming such proposed termination.

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          (d)     Executive may terminate his or her employment for or without
Good Reason by providing written notice of termination to Orion that indicates
in reasonable detail the facts and circumstances alleged to provide a basis for
such termination. If Executive is alleging a termination for Good Reason,
Executive must provide written notice to Orion of the existence of the condition
constituting Good Reason within ninety (90) days of the initial existence of
such condition, and Orion must have a period of at least thirty (30) days
following receipt of such notice to cure such condition. If such condition is
not cured by Orion within such thirty-day period, Executive’s termination of
employment from the Company shall be effective on the date immediately following
the end of such cure period.

        5.    Payments upon Termination.

          (a)    Entitlement to Severance. Subject to the other terms and
conditions of this Agreement, Executive shall be entitled to the Accrued
Benefits, and to the severance benefits described in subsection (c), in either
of the following circumstances while this Agreement is in effect:

          (i)     Executive’s employment is terminated by Orion without Cause,
except in the case of death or Disability; or

          (ii)     Executive terminates his or her employment with the Company
for Good Reason.

  If Executive dies after receiving a notice by Orion that Executive is being
terminated without Cause, or after providing notice of termination for Good
Reason, the Executive’s estate, heirs and beneficiaries shall be entitled to the
Accrued Benefits and the severance benefits described in subsection (c) at the
same time such amounts would have been paid or benefits provided to Executive
had he or she lived.

          (b)    General Release Requirement. As an additional prerequisite for
receipt of the severance benefits described in subsection (c), Executive must
execute, deliver to Orion, and not revoke (to the extent Executive is allowed to
do so) a General Release.

          (c)    Severance Benefits; Timing and Form of Payment. Subject to the
limitations imposed by Section 6, if Executive is entitled to severance
benefits, then:

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          (i)     Company shall pay Executive the Severance Payment in a lump
sum within ten (10) days following the Executive’s Separation from Service, or
if later, the date on which the General Release is no longer revocable, or if
later, the date on which the amount payable under Section 6 is determined, but
in no event may be payment be made more than 2½ months after the year in which
Executive’s Separation from Service occurs;

          (ii)     At the same time that the Severance Payment is made, Company
shall pay Executive a lump sum amount equal to the Executive’s annual target
cash bonus opportunity (if any) as established by the Board or the Compensation
Committee of the Board for the fiscal year in which the Separation from Service
occurs, multiplied by a fraction, the numerator of which is the number of days
that have elapsed during the annual performance period to the date of the
Executive’s Separation from Service and the denominator of which is 365; and

          (iii)     Executive shall be entitled to pay premiums for COBRA
continuation coverage for the length of such coverage at the same rate as is
being charged to active employees for similar coverage.

  All payments shall be subject to payroll taxes and other withholdings in
accordance with the Company’s (or the applicable employer of record’s) standard
payroll practices and applicable law.

          (d)    Other Termination of Employment. If Executive’s employment
terminates for any reason other than those described in subsection (a), the
Executive (or the Executive’s estate in the event of his or her death), shall be
entitled to receive only the Accrued Benefits. Executive must be terminated for
Cause pursuant to and in accordance with Section 4(c) of this Agreement in order
for the consequences of such a Cause termination to apply to Executive under any
stock option or similar equity award agreement with the Company to which
Executive is then a party. The Company’s obligations under this Section 5 shall
survive the termination of this Agreement.

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        6.    Limitations on Severance Payments and Benefits. Notwithstanding
any other provision of this Agreement, if any portion of the Severance Payment
or any other payment under this Agreement, or under any other agreement with or
plan of the Company (in the aggregate “Total Payments”), would constitute an
“excess parachute payment,” then the Total Payments to be made to Executive
shall be reduced such that the value of the aggregate Total Payments that
Executive is entitled to receive shall be One Dollar ($1) less than the maximum
amount which Executive may receive without becoming subject to the tax imposed
by Code Section 4999 or which the Company may pay without loss of deduction
under Code Section 280G(a); provided that the foregoing reduction in the amount
of Total Payments shall not apply if the After-Tax Value to Executive of the
Total Payments prior to reduction in accordance herewith is greater than the
After-Tax Value to Executive if Total Payments are reduced in accordance
herewith. For purposes of this Agreement, the terms “excess parachute payment”
and “parachute payments” shall have the meanings assigned to them in Code
Section 280G, and such “parachute payments” shall be valued as provided therein.
Present value for purposes of this Agreement shall be calculated in accordance
with Code Section 1274(b)(2). Within twenty (20) business days following
delivery of the notice of termination or notice by Orion to Executive of its
belief that there is a payment or benefit due Executive that will result in an
excess parachute payment as defined in Code Section 280G, Executive and Orion,
at Orion’s expense, shall obtain the opinion (which need not be unqualified) of
nationally recognized tax counsel selected by Orion’s independent auditors and
acceptable to Executive in Executive’s sole discretion, which opinion sets
forth: (A) the amount of the Base Period Income, (B) the amount and present
value of Total Payments, (C) the amount and present value of any excess
parachute payments without regard to the limitations of this Section 6, (D) the
After-Tax Value of the Total Payments if the reduction in Total Payments
contemplated under this Section 6 did not apply, and (E) the After-Tax Value of
the Total Payments taking into account the reduction in Total Payments
contemplated under this Section 6. As used in this Section 6, the term “Base
Period Income” means an amount equal to Executive’s “annualized includible
compensation for the base period” as defined in Code Section 280G(d)(1). For
purposes of such opinion, the value of any noncash benefits or any deferred
payment or benefit shall be determined by Orion’s independent auditors in
accordance with the principles of Code Sections 280G(d)(3) and (4), which
determination shall be evidenced in a certificate of such auditors addressed to
Orion and Executive. For purposes of determining the After-Tax Value of Total
Payments, Executive shall be deemed to pay federal income taxes and employment
taxes at the highest marginal rate of federal income and employment taxation in
the calendar year in which the Termination Payment is to be made and state and
local income taxes at the highest marginal rates of taxation in the state and
locality of Executive’s domicile for income tax purposes on the date the
Termination Payment is to be made, net of the maximum reduction in federal
income taxes that may be obtained from deduction of such state and local taxes.
Such opinion shall be dated as of the Termination Date and addressed to Orion
and Executive and shall be binding upon the Company and Executive. If such
opinion determines that there would be an excess parachute payment and that the
After-Tax Value of the Total Payments taking into account the reduction
contemplated under this Section is greater than the After-Tax Value of the Total
Payments if the reduction in Total Payments contemplated under this Section did
not apply, then the Termination Payment hereunder or any other payment
determined by such counsel to be includible in Total Payments shall be reduced
or eliminated as specified by Executive in writing delivered to Orion within
five business days of Executive’s receipt of such opinion or, if Executive fails
to so notify Orion, then as Orion shall reasonably determine, so that under the
bases of calculations set forth in such opinion there will be no excess
parachute payment. If such legal counsel so requests in connection with the
opinion required by this Section, Executive and Orion shall obtain, at Orion’s
expense, and the legal counsel may rely on in providing the opinion, the advice
of a firm of recognized executive compensation consultants as to the
reasonableness of any item of compensation to be received by Executive.
Notwithstanding the foregoing, the provisions of this Section 6, including the
calculations, notices and opinions provided for herein, shall be based upon the
conclusive presumption that the following are reasonable: (1) the compensation
and benefits provided for in Section 3 and (2) any other compensation, including
but not limited to the Accrued Benefits, earned prior to the date of Executive’s
Separation from Service by the Executive pursuant to the Company’s compensation
programs if such payments would have been made in the future in any event, even
though the timing of such payment is triggered by the Change in Control or the
Executive’s Separation from Service. If the provisions of Code Sections 280G and
4999 are repealed without succession, then this Section 6 shall be of no further
force or effect.

        7.    Covenants by Executive.

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          (a)    Confidentiality and Non-Disclosure. During Executive’s
employment with the Company and for a period of two years following Executive’s
Separation from Service, he or she agrees that he or she will not, except in
furtherance of the business of the Company, disclose, furnish, or make available
to any person or use for the benefit of himself or herself or any other person
any confidential or proprietary information or data of the Company including,
but not limited to, trade secrets, customer and supplier lists, pricing
policies, operational methods, marketing plans or strategies, product
development techniques or plans, business acquisition or disposition plans, new
personnel employment plans, methods of manufacture, technical process, and
formulae, designs and design projects, inventions and research projects and
financial budgets and forecasts except (i) information which at the time is
available to others in the business or generally known to the public other than
as a result of disclosure by Executive not permitted hereunder, and (ii) when
required to do so by a court of competent jurisdiction, by any governmental
agency or by any administrative, legislative or regulatory body; provided that
in this instance Executive shall make reasonable efforts to inform the Company
of any such request prior to any disclosure so as to permit the Company a
meaningful opportunity to seek a protective order or similar adjudication. Upon
termination of his or her employment with the Company, Executive will
immediately return to the Company all written or electronically stored
confidential or proprietary information in whatever format it is contained.

          (b)    Non-Competition/Non-Solicitation.

          (i)     During Executive’s employment with the Company and for a
period of two years following Executive’s Separation from Service, Executive
agrees not to directly or indirectly engage, or assist any business or entity,
in Competitive Business Activity in any capacity, including without limitation
as an employee, officer, or director of, or consultant or advisor to, any person
or entity engaged directly or indirectly in a business which engages in
Competitive Business Activity, in North America or anywhere that Orion or its
Successor does business at the time of Executive’s termination of employment,
without the written consent of the Board.

          (ii)     During Executive’s employment with the Company and for a
period of two years following Executive’s Separation from Service, Executive
agrees not to, in any form or manner, directly or indirectly, on his or her own
behalf or in combination with others (1) solicit, induce or influence any
customer, supplier, lender, lessor or any other person with a business
relationship with the Company to discontinue or reduce the extent of such
business relationship, or (2) recruit, solicit or otherwise induce or influence
any employee of the Company to discontinue their employment with the Company.

          (c)    Disclosure and Assignment to the Company of Inventions and
Innovations.

          (i)     Executive agrees to disclose and assign to the Company as the
Company’s exclusive property, all inventions and technical or business
innovations, including but not limited to all patentable and copyrightable
subject matter (collectively, the “Innovations”) developed, authored or
conceived by Executive solely or jointly with others during the period of
Executive’s employment, including during Executive’s employment prior to the
date of this Agreement, (1) that are along the lines of the business, work or
investigations of the Company to which Executive’s employment relates or as to
which Executive may receive information due to Executive’s employment with the
Company, or (2) that result from or are suggested by any work which Executive
may do for the Company or (3) that are otherwise made through the use of Company
time, facilities or materials. To the extent any of the Innovations is
copyrightable, each such Innovation shall be considered a “work for hire.”

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          (ii)     Executive agrees to execute all necessary papers and
otherwise provide proper assistance (at the Company’s expense), during and
subsequent to Executive’s employment, to enable the Company to obtain for itself
or its nominees, all right, title, and interest in and to patents, copyrights,
trademarks or other legal protection for such Innovations in any and all
countries.

          (iii)     Executive agrees to make and maintain for the Company
adequate and current written records of all such Innovations;

          (iv)     Upon any termination of Executive’s employment, employee
agrees to deliver to the Company promptly all items which belong to the Company
or which by their nature are for the use of Company employees only, including,
without limitation, all written and other materials which are of a secret or
confidential nature relating to the business of the Company.

          (v)     In the event Company is unable for any reason whatsoever to
secure Executive’s signature to any lawful and necessary documents required,
including those necessary for the assignment of, application for, or prosecution
of any United States or foreign application for letters patent or copyright for
any Innovation, Executive hereby irrevocably designates and appoints Company and
its duly authorized officers and agents as Executive’s agent and
attorney-in-fact, to act for and in Executive’s behalf and stead to execute and
file any such applications and to do all other lawfully permitted acts to
further the assignment, prosecution, and issuance of letters patent or
registration of copyright thereon with the same legal force and effect as if
executed by Executive. Executive hereby waives and quitclaims to Company any and
all claims, of any nature whatsoever, which Executive may now have or may
hereafter have for infringement of any patent or copyright resulting from any
such application.

          (d)    Remedies Not Exclusive. In the event that Executive breaches
any terms of this Section 7, Executive acknowledges and agrees that said breach
may result in the immediate and irreparable harm to the business and goodwill of
the Company and that damages, if any, and remedies of law for such breach may be
inadequate and indeterminable. The Company, upon Executive’s breach of this
Section 7, shall therefore be entitled (in addition to and without limiting any
other remedies that the Company may seek under this Agreement or otherwise at
law or in equity) to (1) seek from any court of competent jurisdiction equitable
relief by way of temporary or permanent injunction and without being required to
post a bond, to restrain any violation of this Section 7, and for such further
relief as the court may deem just or proper in law or equity, and (2) in the
event that the Company shall prevail, its reasonable attorneys fees and costs
and other expenses in enforcing its rights under this Section 7.

          (e)    Severability of Provisions. If any restriction, limitation, or
provision of this Section 7 is deemed to be unreasonable, onerous, or unduly
restrictive by a court of competent jurisdiction, it shall not be stricken in
its entirety and held totally void and unenforceable, but shall remain effective
to the maximum extent possible within the bounds of the law. If any phrase,
clause or provision of this Section 7 is declared invalid or unenforceable by a
court of competent jurisdiction, such phrase, clause, or provision shall be
deemed severed from this Section 7, but will not affect any other provision of
this Section 7, which shall otherwise remain in full force and effect. The
provisions of this Section 7 are each declared to be separate and distinct
covenants by Executive.

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        8.    Notice. Any notice, request, demand or other communication
required or permitted herein will be deemed to be properly given when personally
served in writing or when deposited in the United States mail, postage prepaid,
addressed to Executive at the address appearing at the end of this Agreement and
to the Company with attention to the Chief Executive Officer of Orion and the
General Counsel of Orion. Either party may change its address by written notice
in accordance with this paragraph.

        9.    Set Off; Mitigation. The Company’s obligation to pay Executive the
amounts and to provide the benefits hereunder shall be subject to set-off,
counterclaim or recoupment of amounts owed by Executive to the Company. However,
Executive shall not be required to mitigate the amount of any payment provided
for pursuant to this Agreement by seeking other employment or otherwise.

        10.    Benefit of Agreement. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective executors,
administrators, successors and assigns. If Orion experiences a Change of
Control, or otherwise sells, assigns or transfers all or substantially all of
its business and assets to any person or if Orion merges into or consolidates or
otherwise combines (where Orion does not survive such combination) with any
person (any such event, a “Sale of Business”), then Orion shall assign all of
its right, title and interest in this Agreement as of the date of such event to
such person, and Orion shall cause such person, by written agreement in form and
substance reasonably satisfactory to Executive, to expressly assume and agree to
perform from and after the date of such assignment all of the terms, conditions
and provisions imposed by this Agreement upon the Company. Failure of Orion to
obtain such agreement prior to the effective date of such Sale of Business shall
be a breach of this Agreement constituting “Good Reason” hereunder, except that
for purposes of implementing the foregoing the date upon which such Sale of
Business becomes effective shall be the Termination Date. In case of such
assignment by Orion and of assumption and agreement by such person, as used in
this Agreement, “Orion” shall thereafter mean the person which executes and
delivers the agreement provided for in this Section 10 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law, and this Agreement shall inure to the benefit of, and be enforceable by,
such person. Executive shall, in his or her discretion, be entitled to proceed
against any or all of such persons, any person which theretofore was such a
successor to Orion, and Orion (as so defined) in any action to enforce any
rights of Executive hereunder. Except as provided in this Section 10, this
Agreement shall not be assignable by Orion. This Agreement shall not be
terminated by the voluntary or involuntary dissolution of Orion.

        11.    Arbitration. Any controversy or claim arising out of or relating
to this Agreement or the breach of this Agreement that cannot be mutually
resolved by the Executive and the Company, including any dispute as to the
calculation of the Executive’s Benefits, Base Salary, Bonus Amount or any
Severance Payment hereunder, shall be submitted to arbitration in Milwaukee,
Wisconsin, in accordance with the procedures of the American Arbitration
Association. The determination of the arbitrator shall be conclusive and binding
on the Company and the Executive, and judgment may be entered on the
arbitrator’s award in any court having jurisdiction.

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        12.    Applicable Law and Jurisdiction. This Agreement is to be governed
by and construed under the laws of the United States and of the State of
Wisconsin without resort to Wisconsin’s choice of law rules. Each party hereby
agrees that the forum and venue for any legal or equitable action or proceeding
arising out of, or in connection with, this Agreement will lie in the
appropriate federal or state courts in the State of Wisconsin and specifically
waives any and all objections to such jurisdiction and venue.

        13.    Captions and Paragraph Headings. Captions and paragraph headings
used herein are for convenience only and are not a part of this Agreement and
will not be used in construing it.

        14.    Invalid Provisions. Subject to Section 7(e), should any provision
of this Agreement for any reason be declared invalid, void, or unenforceable by
a court of competent jurisdiction, the validity and binding effect of any
remaining portion will not be affected, and the remaining portions of this
Agreement will remain in full force and effect as if this Agreement had been
executed with said provision eliminated.

        15.    No Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
of such party’s rights or deprive such party of the right thereafter to insist
upon strict adherence to that term or any other term of this Agreement.

        16.    Entire Agreement. This Agreement contains the entire agreement of
the parties with respect to the subject matter of this Agreement except where
other agreements are specifically noted, adopted, or incorporated by reference.
This Agreement otherwise supersedes any and all other agreements (including with
respect to the definition of Cause and the process for Cause termination, any
stock option or similar equity award agreements with the Company to which
Executive may now or hereafter be a party), either oral or in writing, between
the parties hereto with respect to the employment of Executive by Company, and
all such agreements shall be void and of no effect. Each party to this Agreement
acknowledges that no representations, inducements, promises, or agreements, oral
or otherwise, have been made by any party, or anyone acting on behalf of any
party, which are not embodied herein, and that no other agreement, statement, or
promise not contained in this Agreement will be valid or binding.

        17.    Modification. This Agreement may not be modified or amended by
oral agreement, but only by an agreement in writing signed by Orion and
Executive.

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        18.    Counterparts. This Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

EXECUTIVE

/s/ Erik Birkerts
Signature

Erik Birkerts
Printed Name

February 21, 2008
Date

________________________________
Address

ORION ENERGY SYSTEMS, INC.

By: /s/ Neal R. Verfuerth

Name: Neal R. Verfuerth

Title: President and Chief Executive Officer

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