Exhibit 10.3

 

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Real Goods Solar, Inc. 2019 Incentive Compensation Plan

 

PURPOSE & OBJECTIVE

 

The objective of this Real Goods Solar, Inc. 2019 Incentive Compensation Plan
(the “Plan”) is to incentivize employees of Real Goods Solar, Inc. (the
“Company” or “RGSE”) to work well together and individually to meet and exceed
the RGSE Operating Plan and Budget for 2019. This document (i) sets forth the
terms and conditions of the Plan and (ii) explains how RGSE will calculate and
distribute the incentive compensation payable hereunder to employees.

 

INCENTIVE COMPENSATION PLAN DESCRIPTION

 

RGSE has an Operating Plan and Budget for 2019 (the “2019 Plan”). Included in
the 2019 Plan is an incentive compensation pool rewarding eligible employees, on
a quarterly basis, for achieving certain division and overall income targets.
The incentive compensation pool for each quarter will be based on a percentage
of the Company’s “cash-like income”. As it relates to the Plan, “cash-like
income” for a quarter is income of RGSE for the quarter before certain items are
taken into account, including but not limited to: (i) items of complex non-cash
derivative accounting; (ii) non-cash stock option expense; (iii) the results of
discontinued operations; (iv) any one-time discretionary bonuses; as well as (v)
income tax payments.

 

The “Incentive Compensation Pool Percentage” for a quarter will be determined by
the Company in accordance with the applicable percentage from the table below
based on the Company’s quarterly consolidated results and the Company’s
achievement of various levels of the 2019 Plan for the quarter. As provided in
the table below, the Company must achieve at least 50% of the 2019 Plan for a
quarter in order for there to be any incentive compensation pool for the quarter
and for any incentive compensation to be payable to eligible employees for the
quarter.

 

Percent of 2019 Plan Achieved Incentive Compensation Pool Percentage  ≥ 130%
20.0% ≥ 120% and ≤ 129% 15.0% ≥ 100% and ≤ 119% 12.5% ≥ 50% and ≤ 99% 10.0% Less
than 50% 00.0%

 

ELIGIBILITY

 

Subject to the other terms and conditions of the Plan, for each quarter, all
regular full-time and part-time employees who have been continuously employed by
the Company for at least six months, as of the beginning of the quarter, are
eligible to participate in the Plan (each an “Eligible Employee” and
collectively, “Eligible Employees”). Seasonal employees, interns and temporary
employees are not eligible to participate in the Plan or to receive any
incentive compensation payable hereunder. In order to receive incentive
compensation under the Plan for a quarter, (i) an Eligible Employee must be (A)
in good standing (i.e., not on a performance improvement plan) at the end of the
quarter and on the date the incentive compensation is paid, and (B) must be an
active employee of the Company on the date the incentive compensation is paid,
and (ii) the Eligible Employee’s operating segment must achieve at least 50% of
the 2019 Plan for the quarter. If any of the conditions in the preceding
sentence are not satisfied for a quarter, the Eligible Employee shall not have
earned and shall not be entitled to receive, and the Company shall not be
obligated to pay, any incentive compensation pursuant to the Plan for that
quarter.

 

110 16th Street, Suite 300, Denver, CO 80202 | PH: 888.567.6527

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CALCULATIONS

 

The incentive compensation payable under the Plan will be calculated using the
quarterly consolidated and segment results. Each Eligible Employee will have an
annual incentive target percentage of base pay and that annual incentive target
will be divided by four to calculate the quarterly targets for the Eligible
Employee. An aggregate incentive compensation pool will be calculated based on
the Company’s percentage of the 2019 Plan achieved.

 

The incentive compensation for a quarter is determined as follows:

 

1)Identification of all Eligible Employees for the quarter

2)Aggregate the base pay of all Eligible Employees for the quarter

3)Determine the size of the incentive compensation pool (the “Quarterly
Incentive Pool”)

4)Determine the incentive compensation payable to each Eligible Employee as
follows:

 

a.Eligible Employee’s base pay × one-fourth of the Eligible Employee’s annual
incentive target percentage (the “Dollar Incentive Target”)

b.Aggregate the Dollar Incentive Targets of all Eligible Employees (the “Total
Incentive Targets”)

c.Quarterly Incentive Pool ÷ Total Incentive Targets = Payout Ratio

d.An Eligible Employee’s “Tentative Award” is the Eligible Employee’s Dollar
Incentive Target × the Payout Ratio

i.The total incentive compensation payable for a quarter shall not exceed the
Quarterly Incentive Pool for that quarter, provided that, the Company, in its
sole discretion may, but is not obligated to, scale up or down the Tentative
Awards for a quarter to match the size of the Quarterly Incentive Pool.

 

TAXATION OF INCENTIVE COMPENSATION

 

All incentive compensation payable under the Plan is subject to withholdings and
deductions as required by applicable law.

 

TIMING OF PAYMENTS

Subject to the other terms and conditions of the Plan, incentive compensation
for a quarter will be paid during the quarter immediately following the quarter
to which the incentive compensation relates and within 30 days after the
Company’s quarterly report is filed with the Securities and Exchange Commission.

 

110 16th Street, Suite 300, Denver, CO 80202 | PH: 888.567.6527

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ADDITIONAL TERMS

 

1.Receipt of any incentive compensation under the Plan for one quarter does not
provide any right to any Eligible Employee to receive incentive compensation, of
any amount, for any other quarter or ever again.

 

2.The Company reserves the right to amend or terminate the Plan, in its sole
discretion, at any time without the consent of any Eligible Employee or
potential Eligible Employee.

 

3.In no event does the establishment of the Plan, the provisions of the Plan, or
any action of the Company or any Company officer with respect to the Plan confer
upon any Eligible Employee the right to continued employment with the Company or
limit the right of the Company to terminate the Eligible Employee’s employment
for any reason or no reason.

 

4.The incentive compensation payable under the Plan is intended to either comply
with the applicable requirements of the statutory provisions of Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”) and any Treasury
Regulations and other interpretive guidance issued thereunder (collectively
“Code Section 409A”) or to satisfy the requirements of an applicable exception
thereto, and the Plan shall be construed and administered in accordance with
such intent. No provision of the Plan shall be interpreted or construed to
transfer any liability imposed on any Eligible Employee under the Code,
including any liability due to a failure to comply with the requirements of Code
Section 409A, from any Eligible Employee or any other individual to the Company
or its subsidiaries, affiliates or successors. In the event the Company
determines that any incentive compensation payable hereunder may violate the
applicable requirements of Code Section 409A, the Company (without any
obligation to do so or obligation to indemnify any Eligible Employee for any
failure to do so) may adopt, without the consent of any Eligible Employee, such
amendments to the Plan or take any other actions that the Company in its sole
discretion determines are necessary or appropriate for such compensation to
either (a) be exempt from the requirements of Code Section 409A or (b) comply
with the applicable requirements of Code Section 409A. Each payment payable
hereunder shall be deemed to be a separate payment for purposes of Code Section
409A. Whenever a payment under the Plan specifies a payment period, the actual
date of payment within such specified period shall be within the sole discretion
of the Company, and no Eligible Employee shall have any right (directly or
indirectly) to determine the year in which such payment is made. With respect to
incentive compensation that is subject to the requirements of Code Section 409A,
in the event a payment period straddles two consecutive calendar years, the
payment shall be made in the later of such calendar years.

 

5.The Company shall have the sole authority and discretion to construe and
interpret the Plan, to correct any defect, omission or inconsistency in the
Plan, and to make all determinations, decisions with respect to any incentive
compensation payable hereunder, and all such interpretations, corrections,
determinations, and decisions shall be final and binding on all parties.

 

110 16th Street, Suite 300, Denver, CO 80202 | PH: 888.567.6527

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6.Any incentive compensation payable hereunder is personal to the Eligible
Employee. Any incentive compensation payable hereunder and the Eligible
Employee’s rights hereunder may not be transferred by gift or otherwise, or
pledged, hypothecated, or otherwise disposed of, by operation of law or
otherwise, and are subject to forfeiture pursuant to the terms of the Plan. Any
attempted disposition of any rights under the Plan in violation of this
provision shall be null and void and of no legal effect, and the Company shall
not recognize any purported transferee as the owner of any rights granted
hereunder.

 

7.In no event shall the Company set aside all or any portion of any incentive
compensation payable hereunder in trust for the exclusive benefit of any
Eligible Employee. Any Eligible Employee’s rights to any payment hereunder shall
be solely that of an unsecured general creditor of the Company.

 

8.Employees who are, or could be, terminated for not meeting performance
standards or violating business policy are not eligible for any incentive
compensation payable hereunder, including, without limitation, employees who
are, or could be, terminated for poor performance, disclosure of confidential
information, violation of the duty of loyalty, violation of business policy,
off-duty misconduct that affects the operation of the business, or any other
misconduct.

 

9.If any provision of the Plan (or portion thereof) is held to be invalid,
illegal or unenforceable by any court or arbitrator of competent jurisdiction,
then solely as to such jurisdiction and subject to this provision, that
provision shall be limited (“blue-penciled”) to the minimum extent necessary so
that the Plan shall otherwise remain enforceable in full force and effect in
such jurisdiction and without affecting in any way the enforceability of the
Plan in other jurisdictions. To the extent such provision cannot be so modified,
the offending provision shall, solely as to such jurisdiction, be deemed
severable from the remainder of the Plan, and the remaining provisions contained
in the Plan shall be construed to preserve to the maximum permissible extent the
intent and purposes of the Plan in such jurisdiction and without affecting in
any way the enforceability of the Plan in other jurisdictions.

 

10.The laws of the State of Colorado, without regard to any conflicts of law
provisions, shall govern the enforcement and interpretation of Plan.

 

110 16th Street, Suite 300, Denver, CO 80202 | PH: 888.567.6527

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