Exhibit 10.2
POWERSECURE INTERNATIONAL, INC.
RESTRICTED STOCK AGREEMENT
1998 Stock Incentive Plan
     This RESTRICTED STOCK AGREEMENT (the “Agreement”) is made to be effective
as of the “Grant Date” set forth on the Signature Page (the “Grant Date”) by and
between PowerSecure International, Inc., a Delaware corporation (the “Company”),
and the individual named as the “Grantee” on the Signature Page (the “Grantee”).
Recitals
     WHEREAS, the Company has adopted the PowerSecure International, Inc. 1998
Stock Incentive Plan (as amended and/or restated from time to time, the “Plan”);
and
     WHEREAS, pursuant to the provisions of the Plan, the Board of Directors of
the Company, acting directly or through its Compensation Committee (the
“Board”), has authorized a grant to the Grantee of shares of common stock, par
value $.01 per share (the “Common Stock”), of the Company, subject to the
restrictions and upon the terms and conditions set forth in this Agreement;
Agreement
     NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
     1. Grant of Restricted Stock. The Company hereby grants to the Grantee the
number of shares of Common Stock (the “Restricted Stock” or the “Restricted
Shares”) set forth on the Signature Page. The Restricted Shares are subject to
the terms and conditions set forth in this Agreement and in the Plan, which is
incorporated herein by this reference. Unless otherwise defined herein, all
terms defined in the Plan and used in this Agreement shall have the same
respective meanings in this Agreement. The Grantee hereby agrees that all
Restricted Shares are subject to, and the Grantee hereby agrees to abide by, all
terms and conditions set forth in the Plan and this Agreement, including but not
limited to the restrictions on transfer set forth in Section 3 and the
forfeiture conditions set forth in Section 6.
     2. Vesting of Restricted Shares.
          (a) Except as otherwise provided in this Agreement, the Restricted
Shares shall vest, and the restrictions applicable thereto shall lapse, in
accordance with the vesting schedule attached hereto (the “Vesting Schedule”),
provided the Grantee has been employed continuously by the Company from the
Grant Date through the “Vesting Date” specified in the Vesting Schedule. The
number of Restricted Shares that shall vest on each Vesting Date shall be equal
to the number of total Restricted Shares granted hereunder multiplied by the
applicable “Vesting Percentage” set forth in the Vesting Schedule. The
Restricted Shares shall be fully vested, and this Agreement and the restrictions
hereunder applicable to the Restricted Shares shall terminate, on the last
Vesting Date set forth in the Vesting Schedule (the “Expiration Date”).

 

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           (b) Restricted Shares that have become vested in accordance with the
Vesting Schedule are referred to herein as “Vested Shares”. Restricted Shares
that have not become vested in accordance with the Vesting Schedule are referred
to herein as “Unvested Shares”.
          (c) Notwithstanding the Vesting Schedule, any and all Unvested Shares
shall become Vested Shares in the event of the Grantee’s death or Disability (as
defined below).
          (d) After any Restricted Shares become Vested Shares, the restrictions
thereon as set forth in Section 3, shall lapse, and the Grantee may Transfer (as
defined below) any of the Vested Shares in his discretion.
     3. Restrictions on Restricted Shares. The Grantee shall be treated as the
beneficial owner of all of the Restricted Shares and shall have all the rights
and privileges of a stockholder as to the Restricted Shares, including the right
to vote and to receive any dividends and other distributions with respect to the
Restricted Shares, except that the following restrictions shall apply to any
Restricted Shares that are Unvested Shares:
          (a) The Grantee shall not be entitled to delivery of any certificates
for Restricted Shares until the restrictions thereon have lapsed and such
Restricted Shares have become Vested Shares in accordance with the Vesting
Schedule without a forfeiture, and upon the satisfaction of all other applicable
conditions.
          (b) The Grantee shall not sell, assign, transfer (by gift or
otherwise), pledge, hypothecate or otherwise dispose of by operation of law or
otherwise (“Transfer”), any Restricted Shares that are Unvested Shares, except
as otherwise provided by this Agreement or the terms of the Plan. If any
Transfer of Restricted Shares is made or attempted to be made contrary to the
terms of this Agreement, such Transfer or attempted Transfer shall be null and
void and ineffectual and shall cause such Restricted Shares to be forfeited, and
the Company shall have the right to acquire for its own account, without the
payment of any consideration therefor, such Restricted Shares from the owner
thereof or his transferee, at any time before or after such prohibited Transfer.
In addition to any other legal or equitable remedies it may have, the Company
may enforce its rights to specific performance to the extent permitted by law
and may exercise such other equitable remedies then available to it. The Company
may refuse for any purpose to recognize any transferee who receives Restricted
Shares contrary to the provisions of this Agreement as a stockholder of the
Company and may retain and/or recover any and all dividends or other
distributions on such Restricted Shares that were paid or payable subsequent to
the date on which the prohibited Transfer was made or attempted.
          (c) The Grantee shall deliver to the Company any and all shares of
Common Stock or other securities distributed as a dividend or distribution with
respect to any Restricted Shares that do not become Vested Shares, upon a
forfeiture of such Restricted Shares.
     4. Change In Control. In the event of a “Change in Control” (as defined in
the Plan or as defined in the Employment and Non-Competition Agreement, of even
date herewith, between the Company and the Grantee (the “Employment
Agreement”)), subject to the applicable restrictions set forth in the Plan, all
Unvested Shares (not otherwise forfeited prior to the Change in Control) shall
vest in full and become Vested Shares upon the date of such Change in Control.
The rights of the Grantee in the event of a Change in Control shall be governed
by the provisions of Sections 9 and 11(a) of the Plan.

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     5. Adjustments in Common Stock.
          (a) In the event that any dividend or other distribution (whether in
the form of cash, Common Stock, other securities or other property),
recapitalization, forward or reverse stock split, reorganization, merger,
consolidation, split-up, combination, spin-off, combination, repurchase,
liquidation, dissolution, exchange of shares of Common Stock or other securities
of the Company, or other similar corporate transaction or event affects the
shares of Common Stock such that an adjustment is necessary or determined by the
Board to be appropriate in order to prevent dilution or enlargement of the
Grantee’s rights under this Agreement, then the Board shall proportionately
adjust the number and kind of Restricted Shares. Any new, additional or
different securities to which the Grantee shall be entitled in respect of
Restricted Shares by reason of such adjustment shall be deemed to be Restricted
Shares and shall be subject to the same terms, conditions and restrictions as
the Restricted Shares so adjusted.
          (b) The grant of Restricted Shares shall not affect in any way the
right of the Company to adjust, reclassify, reorganize, or otherwise change its
capital stock or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or assets.
     6. Termination of Employment; Forfeiture of Unvested Shares.
          (a) Except as provided in Section 6(e) below, in the event the
Grantee’s employment with the Company is terminated for any reason, other than
due to his death or Disability, all rights of the Grantee with respect to
Restricted Shares that are Unvested Shares shall terminate and be forfeited in
their entirety as of the date of such termination of employment, and the Grantee
shall immediately transfer and assign to the Company, without the requirement of
consideration, all such Restricted Shares that are Unvested Shares, which shall
be promptly tendered to the Company by the delivery of the certificates, if any,
for such Unvested Shares, endorsed in blank by the Grantee or the Grantee’s
representative or with stock powers attached thereto duly endorsed, at the
Company’s principal executive offices, all in form suitable for the transfer of
such Unvested Shares to the Company without the payment of any consideration
therefor by the Company. After the time at which any such Unvested Shares are
required to be delivered to the Company for transfer to the Company, the Company
shall not pay any dividends to the Grantee on account of such Unvested Shares or
permit the Grantee to exercise any of the privileges or rights of a stockholder
with respect to such Unvested Shares, but shall, insofar as permitted by law,
treat the Company as the owner of such Unvested Shares. However, the forfeiture
of any Restricted Shares shall not create any obligation to repay dividends
received as to such Restricted Shares, nor shall such forfeiture invalidate any
votes previously given by Grantee with respect to such Restricted Shares.
          (b) For purposes of this Agreement, the Grantee shall be deemed to be
employed by the Company so long as the Grantee is an employee, director,
officer, consultant or advisor of the Company or any Subsidiary (as defined in
the Plan) of the Company. In the event the Grantee ceases to be an employee of
the Company in order to become an employee of any subsidiary of the Company, or
the Grantee ceases to be an employee of any such subsidiary in order to become
an employee of the Company or of another subsidiary of the Company, then the
Grantee shall be deemed to continue as an employee of the Company for all
purposes of this Agreement.
          (c) For purposes hereof, “Disability” shall have the meaning given to
such term in the Employment Agreement.

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          (d) The Board, in its discretion, may determine whether any leave of
absence constitutes a termination of employment for purposes of this Agreement.
          (e) Notwithstanding any other provision of this Agreement to the
contrary, in the event the Grantee’s employment with the Company is terminated
by the Company without “Cause” (as “Cause” is defined in the Employment
Agreement), before all the Restricted Shares have vested, then (i) the Service
Shares (as defined in the Vesting Schedule) shall immediately vest on the date
of such termination, and (ii) the unvested Performance Shares (as defined in the
Vesting Schedule) applicable for the fiscal year in which such termination
occurs (or applicable to the prior fiscal year if the Form 10-K for that prior
fiscal year has not yet been filed) shall vest in the event the Company attains
the applicable Restricted Share Performance Goal for that fiscal year (and, if
applicable, the prior fiscal year).
     7. Certificates for Restricted Shares.
          (a) Reasonably promptly after the Grant Date, the Company shall cause
one or more certificates representing the Restricted Shares to be registered in
the name of, and issued to, the Grantee.
          (b) Each certificate for Restricted Shares shall bear a legend to
substantially the following effect:
     “THE OWNERSHIP AND TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES
REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING
FORFEITURE) OF A RESTRICTED STOCK AGREEMENT BETWEEN POWERSECURE INTERNATIONAL,
INC. AND THE REGISTERED OWNER OF THIS CERTIFICATE AND TO THE TERMS AND
CONDITIONS OF THE POWERSECURE INTERNATIONAL, INC. 1998 STOCK INCENTIVE PLAN, AS
AMENDED. COPIES OF THE RESTRICTED STOCK AGREEMENT AND THE PLAN ARE ON FILE AT
THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY AND MAY BE OBTAINED UPON WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF
POWERSECURE INTERNATIONAL, INC. AT ITS PRINCIPAL EXECUTIVE OFFICES. ANY TRANSFER
OF THIS CERTIFICATE OR THE SHARES REPRESENTED HEREBY IN CONTRAVENTION OF SUCH
PLAN OR THE RESTRICTED STOCK AGREEMENT SHALL BE INVALID AND INEFFECTIVE”.
In addition, the certificate or certificates for the Restricted Shares shall be
subject to such stop transfer orders and other restrictions as the Company may
deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange or stock market upon
which the Common Stock is from time to time listed or traded, and any applicable
federal or states securities laws, and the Company may cause a legend or legends
to be placed on such certificates or certificates to make appropriate references
to such restrictions.
          (c) The Company may, in its sole discretion, require the Grantee to
keep any certificates representing Restricted Shares in the custody of the
Company, so long as such Restricted Shares are subject to the restrictions set
forth in Section 3 and are Unvested Shares. In

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such event, the Grantee agrees to deliver to the Company one or more stock
powers duly endorsed in blank relating to the Restricted Shares.
          (d) After any Restricted Shares become Vested Shares in accordance
with the Vesting Schedule, and upon the satisfaction of all other applicable
conditions to the Restricted Shares, including, but not limited to, the payment
by the Grantee of all applicable withholding taxes, the Company shall deliver or
cause to be delivered to the Grantee (or his successor) one or more certificates
representing such Restricted Shares without the legend referenced in Section
6(b) hereof, reasonably promptly after receiving a request by the Grantee (or
his successor).
     8. Taxes. Upon the vesting of any portion of the Restricted Shares, or
earlier if applicable due to tax elections by the Grantee, the Grantee shall
make arrangements satisfactory to the Company to make payment of the amount
required under applicable federal, state and local income and other tax laws
(collectively, “Taxes”). If the Grantee has not made arrangements satisfactory
to the Company to pay the Taxes, the Company shall withhold from the Vested
Shares a number of Restricted Shares having a fair market value equal to the
amount required to pay the minimum required Withholding Taxes. The fair market
value of the Restricted Shares to be withheld shall be calculated in accordance
with the Plan.
     9. Transferability of Unvested Shares. Notwithstanding the restrictions on
Transfer set forth in Section 3, the Grantee may Transfer any Unvested Shares in
whole or in part as follows:
          (a) By will or the laws of descent and distribution; or
          (b) Pursuant to a Qualified Domestic Relations Order as defined under
the Code or Title I of the Employee Retirement Income Security Act of 1974.
     10. Plan As Controlling. The Restricted Shares are granted pursuant to, and
this Agreement shall be interpreted in a manner consistent with, the Plan. Any
provision of this Agreement that is inconsistent or in conflict with any
provision of the Plan shall be deemed to be superseded and governed by the
provision of the Plan. All terms and conditions of the Plan applicable to the
Restricted Shares which are not set forth in this Agreement shall be deemed to
be incorporated herein by this reference. Grantee acknowledges that he has
received a copy of the Plan prior to executing this Agreement.
     11. No Right to Continued Employment. Nothing contained in the Plan or this
Agreement shall confer, and the grant of the Restricted Shares shall not be
construed as conferring, upon the Grantee, any right to continue in the employ
or service of the Company or any Subsidiary, or as interfering in any way with
the right of the Company or any Subsidiary of the Company to (a) terminate the
Grantee’s employment or service at any time, or (b) increase or decrease the
compensation of the Grantee from the rate in existence on the Grant Date.
     12. Compliance with Legal and Other Requirements. The Company may, to the
extent deemed necessary or advisable by the Board, postpone the issuance or
delivery of Restricted Shares or other payment of other benefits under the
Restricted Shares until completion of the registration or qualification of such
Restricted Shares or other required action under any federal or state law, rule
or regulation, listing or other required action with respect to any national
securities exchange, automated quotation system or any other stock exchange or
stock market upon which the Common Stock or other securities of the Company are
listed or quoted, or compliance with any other obligation of the Company, as the
Board may consider appropriate,

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and may require the Grantee to make such representations, furnish such
information and comply with or be subject to such other conditions as it may
consider appropriate in connection with the issuance or delivery of the
Restricted Shares or payment of other benefits in compliance with applicable
laws, rules, regulations, listing requirements, or other applicable obligations.
     13. Miscellaneous.
          (a) Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed given when sent by first class
certified or registered mail, postage prepaid, return receipt requested, or by
personal delivery, addressed as follows:

  (i)   If to the Company, at its principal executive offices; or     (ii)   If
to the Grantee, at the address set forth on the Signature Page.

The addresses for such notices may be changed from time to time by written
notice given in the manner provided for herein.
          (b) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to
provisions governing conflicts of laws.
          (c) Entire Agreement. This Agreement (along with the Plan) constitutes
the entire agreement and understanding between the parties hereto regarding the
subject matter hereof, and supersedes all prior written or oral agreements,
understandings and communications between the parties related to the subject
matter of this Agreement.
          (d) Amendment. This Agreement may be modified, amended or rescinded
only by a written Agreement executed by all parties hereto.
          (e) Severability. If any provision of the Plan, this Agreement or the
Restricted Shares is or becomes or is deemed to be invalid, illegal or
unenforceable in any jurisdiction, or would disqualify the Plan, this Agreement
or the Restricted Shares under any law, this Agreement and the Restricted Shares
shall be deemed amended to conform to applicable laws or, if it cannot be
construed or deemed without, in the determination of the Board, materially
altering the intent of the Agreement and the Restricted Shares, it shall be
deleted and the remainder of the Agreement shall remain in full force and
effect. If any of the terms or provisions of this Agreement or the Restricted
Shares conflict with the requirements of applicable law or applicable rules and
regulations thereunder, including the requirements of Rule 16b-3, then such
terms or provisions shall be deemed inoperative to the extent necessary to avoid
the conflict with applicable law, or applicable rules and regulations, without
invalidating new remaining provisions hereof.
          (f) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, subject to the limitations set forth in Sections 3 and 9 hereof.

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          (g) Specific Performance and Remedies. The rights of the parties under
this Agreement are unique and, accordingly, the parties shall have the right to,
in addition to any other remedies as may be available to any of them at law or
in equity, to enforce their rights hereunder by actions for specific performance
in addition to any other legal or equitable remedies that they might have to the
extent permitted by law. All rights and remedies of the Company and of the
Grantee enumerated in this Agreement shall be accumulative, and, except as
expressly provided otherwise in this Agreement, none shall exclude any other
rights or remedies allowed by law or in equity, and each of said rights or
remedies may be exercised and enforced concurrently.
          (h) Waivers. Any of the provisions of this Agreement may be waived by
an instrument in writing with the consent of the party or parties whose rights
are being waived. Any waiver of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach of that
provision or of any other provision hereof.
          (i) Captions. The captions contained in this Agreement are included
for convenience of reference only and do not define, limit, explain or modify
this Agreement or its interpretation, construction or meaning and are in no way
to be construed as a part of this Agreement.
          (j) Construction. For purposes of this Agreement, the following rules
of construction shall apply: (i) the word “or” is disjunctive but not
necessarily exclusive; and (ii) the number and gender of each pronoun shall be
construed to be such number and gender as the context, circumstances or its
antecedent may require.
* * * * * * * * *

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SIGNATURE PAGE
     IN WITNESS WHEREOF, the undersigned have caused this Restricted Stock
Agreement to be executed as of the date first above written.
Grant Date: December 10, 2007
Restricted Shares: 25,000

         
 
        POWERSECURE INTERNATIONAL, INC.    
 
       
By:
  /s/ Sidney Hinton     
 
         
Its:
  President and CEO     
 
       
 
        GRANTEE:    
 
        /s/ Christopher T. Hutter           Christopher T. Hutter    

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Vesting Schedule

          Vesting Percentage         (Number of Shares)   Vesting Date   Vesting
Condition
Immediate Vesting Shares
         
10% (2,500)
  December 10, 2007   Vested Upon Grant
 
       
Service Shares
         
50% (12,500)
  December 10, 2012   Continuous Employment
 
       
Performance Shares
         
10% (2,500)
  Day Form 10-K for
Fiscal Year 2008 is filed   Company achieves Restricted Share
Performance Goal for Fiscal Year 2008*
 
       
10% (2,500)
  Day Form 10-K for Fiscal Year 2009 is filed   Company achieves Restricted
Share
Performance Goal for Fiscal Year 2009*
 
       
10% (2,500)
  Day Form 10-K for Fiscal Year 2010 is filed   Company achieves Restricted
Share Performance
Goal for Fiscal Year 2010*
 
       
10% (2,500)
  Day Form 10-K for Fiscal Year 2011 is filed   Company achieves Restricted
Share Performance
Goal for Fiscal Year 2011*

 

*   In the event that the Company fails to achieve the Restricted Share
Performance Goal for any Fiscal Year, the Performance Restricted Shares that did
not vest for that Fiscal Year shall vest in the subsequent Fiscal Year but only
if the Company exceeds by 10% the Restricted Share Performance Goal for that
subsequent fiscal year.

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Restricted Share Performance Goal
The “Restricted Share Performance Goal” for Fiscal Year 2008 shall be equal to a
20% increase above 90% of the lower end of the range of the Company’s
consolidated net income forecast for the Company’s fiscal year ending
December 31, 2007 (“Fiscal Year 2007”) as included in its guidance issued
publicly on August 8, 2007. For Fiscal Year 2009 and each Fiscal Year
thereafter, the Restricted Share Performance Goal shall be increased by 20% over
the prior Fiscal Year’s Restricted Share Performance Goal, as follows:

              Fiscal Year   No. Performance Shares   Restricted Share
Performance Goal
2008
    2,500     20% increase over 90% of the lower end of the range of the
Company’s
consolidated net income forecast for Fiscal Year 2007 as included in its
guidance issued publicly on August 8, 2007
 
           
2009
    2,500     20% increase over Restricted Share Performance Goal for Fiscal
Year 2008
 
           
2010
    2,500     20% increase over Restricted Share Performance Goal for Fiscal
Year 2009
 
           
2011
    2,500     20% increase over Restricted Share Performance Goal for Fiscal
Year 2010

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