of the Company for the time period ending with the Termination Date; (iii) any and allother cash earned through the Termination Date and deferred at the election of the Executiveor pursuant to any deferred compensation plan then in effect; and (iv) all other paymentsand benefits to which the Executive (or in the event of the Executive’s death, theExecutive’s surviving spouse or other beneficiary), including those provided pursuant toExhibit A, is entitled on the Termination Date under the terms of any benefit plan of theCompany, excluding severance payments under any Company severance policy, practice oragreement in effect on the Termination Date. Payment of Accrued Benefits shall be madepromptly 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 benefitplan or practice establishing such benefits.     (b) “**Base Salary**” shall mean the Executive’s annual base salary with the Company as ineffect from time to time.     (c) “**Board**” shall mean the board of directors of Orion or a committee of such Boardauthorized to act on its behalf in certain circumstances, including the CompensationCommittee 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 positionor as from time to time assigned to him (other than due to Disability); (ii) committed anywillful, intentional, or grossly negligent act having the effect of materially injuring theinterest, business, or reputation of the Company; (iii) violated or failed to comply in anymaterial respect with the Company’s published rules, regulations, or policies, as in effector amended from time to time; (iv) committed an act constituting a felony or misdemeanorinvolving moral turpitude, fraud, theft, or dishonesty; (v) misappropriated or embezzled anyproperty 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 applicableconfidentiality, non-compete, non-solicit, general release, covenant not-to-sue, or otheragreement 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) atrustee or other fiduciary holding securities under any employee benefit plan of theCompany or any of its subsidiaries, (C) an underwriter temporarily holdingsecurities pursuant to an offering of such securities or (D) a corporation owned,directly or indirectly, by the shareholders of the Company in substantially the sameproportions as their ownership of stock in the Company (“Excluded Persons”)) is orbecomes the Beneficial Owner, directly or indirectly, of securities of the Company(not including in the securities beneficially owned by such Person any securitiesacquired directly from the Company or its Affiliates after the IPO Date, pursuant toexpress authorization by the Board that refers to this exception) representingtwenty percent (20%) or more of either the then outstanding shares of common stockof the Company or the combined voting power of the Company’s then outstanding votingsecurities; or     (ii) the following individuals cease for any reason to constitute a majority ofthe number of directors of the Company then serving: (A) individuals
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who, on the IPO Date, constituted the Board and (B) any new director (otherthan a director whose initial assumption of office is in connection with an actualor 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 inRule 14a-11 of Regulation 14A under the Act) whose appointment or election by theBoard or nomination for election by the Company’s shareholders was approved by avote of at least two-thirds (2/3) of the directors then still in office who eitherwere directors on the IPO Date, or whose appointment, election or nomination forelection was previously so approved (collectively the “Continuing Directors”);*provided, however,*that individuals who are appointed to the Board pursuant to or inaccordance with the terms of an agreement relating to a merger, consolidation, orshare exchange involving the Company (or any direct or indirect subsidiary of theCompany) shall not be Continuing Directors for purposes of this Agreement untilafter such individuals are first nominated for election by a vote of at leasttwo-thirds (2/3) of the then Continuing Directors and are thereafter elected asdirectors by the shareholders of the Company at a meeting of shareholders heldfollowing consummation of such merger, consolidation, or share exchange; *and,provided further,*that in the event the failure of any such persons appointed to theBoard to be Continuing Directors results in a Change of Control, the subsequentqualification of such persons as Continuing Directors shall not alter the fact thata Change of Control occurred; or     (iii) the consummation of a merger, consolidation or share exchange of theCompany with any other corporation or the issuance of voting securities of theCompany 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 requiresapproval of the shareholders of the Company, other than (A) a merger, consolidationor share exchange which would result in the voting securities of the Companyoutstanding immediately prior to such merger, consolidation or share exchangecontinuing to represent (either by remaining outstanding or by being converted intovoting securities of the surviving entity or any parent thereof) at least fiftypercent (50%) of the combined voting power of the voting securities of the Companyor such surviving entity or any parent thereof outstanding immediately after suchmerger, consolidation or share exchange, or (B) a merger, consolidation or shareexchange effected to implement a recapitalization of the Company (or similartransaction) in which no Person (other than an Excluded Person) is or becomes theBeneficial Owner, directly or indirectly, of securities of the Company (notincluding in the securities beneficially owned by such Person any securitiesacquired directly from the Company or its Affiliates after the IPO Date, pursuant toexpress authorization by the Board that refers to this exception) representingtwenty percent (20%) or more of either the then outstanding shares of common stockof the Company or the combined voting power of the Company’s then outstanding votingsecurities; or     (iv) the consummation of a plan of complete liquidation or dissolution of theCompany or a sale or disposition by the Company of all or substantially all of theCompany’s assets (in one transaction or a series of related transactions within anyperiod of 24 consecutive months), in each case, which requires approval of theshareholders of the Company, other than a sale or disposition by the Company of allor substantially all of the Company’s assets to an entity at
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least seventy-five percent (75%) of the combined voting power of the votingsecurities of which are owned by Persons in substantially the same proportions astheir ownership of the Company immediately prior to such sale.Notwithstanding the foregoing, no “Change of Control” shall be deemed to have occurred if there isconsummated any transaction or series of integrated transactions immediately following which therecord holders of the common stock of the Company immediately prior to such transaction or seriesof transactions continue to own, directly or indirectly, in the same proportions as their ownershipin the Company, an entity that owns all or substantially all of the assets or voting securities ofthe 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, corporationor other entity, including any successor (by merger or otherwise) of such entity, ora group of any of the foregoing acting in concert;     (ii) the terms “Affiliate” and “Associate” shall have the respective meaningsascribed to such terms in Rule 12b-2 of the General Rules and Regulations of theAct;     (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 securitieswhich:a) such Person or any of such Person’s Affiliates or Associates has theright to acquire (whether such right is exercisable immediately or onlyafter the passage of time) pursuant to any agreement, arrangement orunderstanding, or upon the exercise of conversion rights, exchange rights,rights, warrants or options, or otherwise; *provided, however,*that a Personshall not be deemed the Beneficial Owner of, or to beneficially own,securities tendered pursuant to a tender or exchange offer made by or onbehalf of such Person or any of such Person’s Affiliates or Associates untilsuch tendered securities are accepted for purchase;b) such Person or any of such Person’s Affiliates or Associates, directly orindirectly, has the right to vote or dispose of or has “beneficialownership” of (as determined pursuant to Rule l3d-3 of the General Rules andRegulations under the Act), including pursuant to any agreement, arrangementor understanding; *provided, however,*that a Person shall not be deemed theBeneficial Owner of, or to beneficially own, any security under thisclause b) as a result of an agreement, arrangement or understandingto vote such security if the agreement, arrangement or understanding:(A) arises solely from a revocable proxy or consent given to such Person inresponse to a public proxy or consent solicitation made pursuant to, and inaccordance with, the applicable rules and regulations under the Act and(B) is not also then reportable on a Schedule l3D under the Act (or anycomparable or successor report); or
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c) are beneficially owned, directly or indirectly, by any other Person withwhich such Person or any of such Person’s Affiliates or Associates has anyagreement, arrangement or understanding for the purpose of acquiring,holding, voting (except pursuant to a revocable proxy as described inclause b) above) or disposing of any voting securities of theCompany.     (f) **“COBRA”**shall mean the provisions of Code Section 4980B.     (g) **“Code”**shall mean the Internal Revenue Code of 1986, as amended, as interpreted byrules and regulations issued pursuant thereto, all as amended and in effect from time totime. Any reference to a specific provision of the Code shall be deemed to includereference to any successor provision thereto.     (h) **“Competitive Business Activity”**shall mean the design and manufacture of lightingsystems and controls for industrial, commercial and agricultural facilities.     (i) “**Disability**” shall mean, subject to applicable law, a total and permanentdisability consisting of a mental or physical disability which precludes the disabledExecutive from performing the material and substantial duties of his employment. Payment ofbenefits for total disability under a disability insurance policy shall be conclusive as tothe existence of total disability, although such payments are not required in order toestablish total disability for purposes of this Agreement. The Executive has a “total andpermanent disability” if he is precluded by mental or physical disability for 180 daysduring any twelve (12) month period. For purposes of this Agreement, an Executive shall bedeemed totally and permanently disabled at the end of such 180th day. In case ofa disagreement as to whether an Executive is totally and permanently disabled and, at therequest 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. Anycosts 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 whomay succeed to any claims of Executive, has or may have against Orion, its board ofdirectors, any of its subsidiaries or affiliates, or any of their employees, directors,officers, employees, agents, plan sponsors, administrators, successors (including theSuccessor), fiduciaries, or attorneys, including but not limited to claims arising out ofExecutive’s employment with, and termination of employment from, the Company, but excludingclaims for (i) severance payments and benefits due pursuant to this Agreement and (ii) anysalary, bonus, equity, accrued vacation, expense reimbursement and other ordinary paymentsor benefits earned or otherwise due with respect to the period prior to the date of anySeparation from Service. The General Release shall be in a form that is reasonablyacceptable to the Company or the Board.     (k) “**Good Reason**” shall mean the occurrence of any of the following without the consentof Executive: (i) a material diminution in the Executive’s Base Salary; (ii) a materialdiminution in the Executive’s authority, duties or responsibilities; (iii) a materialdiminution in the authority, duties or responsibilities of Neal Verfuerth; (iv) a materialdiminution in the budget over which the Executive retains authority; (v) a material changein the geographic location at which the Executive must perform services;
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or (vi) a material breach by Orion of any provisions of this Agreement or any optionagreement with the Company to which the Executive is a party.          (l) “**Separation from Service**” shall mean Executive’s termination of employment from Orion andeach entity that is required to be included in Orion’s controlled group of corporations within themeaning of Code Section 414(b), or that is under common control with Orion within the meaning ofCode Section 414(c); *provided*that the phrase “at least 50 percent” shall be used in place of thephrase “ 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 orother bona fide leave of absence, Executive will not be deemed to have incurred a Separationfrom Service for the first six (6) months of the leave of absence, or if longer, for so longas 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 thelevel of bona fide services provided by Executive to Orion and its 409A affiliatespermanently decreases to a level of twenty percent (20%) or less of the level of servicesrendered by Executive, on average, during the immediately preceding 12 months of employment.        (iii) If, following Executive’s termination of employment, Executive continues toprovide 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 isproviding bona fide services at a rate that is greater than twenty percent (20%) of thelevel of services rendered by Executive, on average, during the immediately preceding 12months of service.     (m) **“Severance Payment”**shall mean the Executive’s Base Salary at the time of theTermination Date plus the average of the annual bonuses earned by the Executive with respectto each of the three completed fiscal years of the Company preceding the year in which theTermination Date occurs (or such lesser number of fiscal years for which the Executive wasemployed by the Company, with any partial year’s bonus being annualized with respect to suchfiscal year) multiplied by the severance multiplier set forth above**;***provided*that ifExecutive’s Termination Date occurs on or following a Change of Control, the multiplierdescribed above shall be increased to the post-Change of Control severance multiplier setforth above and any reduction in Executive’s Base Salary since the date of the Change ofControl shall be ignored.     (n) **“Successor”**shall mean the person to which this Agreement is assigned upon a Saleof Business within the meaning of Section 10.     (o) “**Termination Date**” shall mean the date of the Executive’s termination of employmentfrom 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-timecapacity. In such position, Executive shall have such duties and authority as iscustomarily associated with such position and shall have such other titles andduties, consistent with Executive’s position, as may be assigned from time to timeby the Board.     (ii) Executive will devote Executive’s full business time and best efforts tothe performance of Executive’s duties hereunder and will not engage in any otherbusiness, profession or occupation for compensation or otherwise which wouldconflict or interfere with the rendition of such services either directly orindirectly, without the prior written consent of the Board; *provided*that nothingherein shall preclude Executive, subject to the prior approval of the Board, fromaccepting appointment to or continue to serve on any board of directors or trusteesof any business organization or any charitable organization; *further provided*ineach case, and in the aggregate, that such activities do not conflict or interferewith the performance of Executive’s duties hereunder or conflict with Section 7.     (b) **Base Salary**. Orion shall pay Executive a Base Salary at the annual rate set forthabove for Fiscal Year 2009, payable in regular installments in accordance with the Company’susual payroll practices. Executive shall be entitled to such increases in Executive’s basesalary, 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/orlong-term cash and equity incentive plans and programs of Orion as are generally provided tothe senior executives of Orion. On and after a Change of Control, to assure that Executivewill have an opportunity to earn incentive compensation, the Executive shall be included ina 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 achievingsuch financial or other goals reasonably related to the business of the Company as theCompany shall establish (the “Goals”), all of which Goals shall be attainable, prior to theend of the post-Change of Control renewal period (as set forth above), with approximatelythe same degree of probability as the most attainable goals under the Company’s bonus planor plans as in effect at any time during the 180-day period immediately prior to the Changeof Control (whether one or more, the “Company Bonus Plan”) and in view of the Company’sexisting and projected financial and business circumstances applicable at the time. Theamount of the bonus (the “Bonus Amount”) that Executive is eligible to earn under the BonusPlan shall be no less than 100% of the Executive’s target award provided in such CompanyBonus Plan (such bonus amount herein referred to as the “Targeted Bonus”), and in the eventthe Goals are not achieved such that the entire Targeted Bonus is not payable, the BonusPlan shall provide for a payment of a Bonus Amount equal to a portion of the Targeted Bonusreasonably related to that portion of the Goals which were achieved. Payment of the BonusAmount shall not be affected by any circumstance occurring subsequent to the end of thepost-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’semployee benefit plans (other than annual and/or long-term incentive programs, which areaddressed in subsection (c)) as in effect from time to time on the same basis as thosebenefits are generally made available to other senior executives of Orion. On and after aChange of Control, Executive shall be included: (i) to the extent eligible thereunder (whicheligibility shall not be conditioned on Executive’s salary grade or on any other requirementwhich excludes persons of comparable status to the Executive unless such exclusion was ineffect for such plan or an equivalent plan immediately prior to the Change in Control of theCompany), in any and all plans providing benefits for the Company’s salaried employees ingeneral (including but not limited to group life insurance, hospitalization, medical,dental, and long-term disability plans) and (ii) in plans provided to executives of theCompany of comparable status and position to Executive (including but not limited todeferred 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 theplans described in clause (i) and the plans described in clause (ii), respectively, in whichExecutive is included be less than the aggregate level of benefits under plans of theCompany of the type referred to in such clause, respectively, in which Executive wasparticipating immediately prior to the Change in Control.     (e) **Business Expenses**. The reasonable business expenses incurred by Executive in theperformance of Executive’s duties hereunder shall be reimbursed by the Company in accordancewith Company policies.     (f) **Other Perquisites.**Executive shall be entitled to receive the other benefits andperquisites set forth in Exhibit A.          4. **Termination of Employment**. Executive’s employment with the Company will terminateduring the term of the Agreement, and this Agreement will terminate on the date of suchtermination, 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 theExecutive in writing that it intends to terminate the Executive’s employment, the Executiveshall not have returned to the performance of the Executive’s duties hereunder on afull-time basis, Orion may terminate the Executive’s employment, effective immediatelyfollowing the end of such thirty-day period.     (c) Orion may terminate Executive’s employment with or without Cause (other than as aresult of Disability which is governed by subsection (b)) by providing written notice toExecutive that indicates in reasonable detail the facts and circumstances alleged to providea basis for such termination. If the termination is without Cause, Executive’s employmentwill terminate on the date specified in the written notice of termination. If thetermination is for Cause, the Executive shall have thirty (30) days from the date thewritten 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 ofExecutive’s employment for Cause. If the alleged conduct or act constituting Cause is notcurable, Executive’s employment will terminate on the date specified in the written noticeof termination. If the alleged conduct or act constituting
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Cause is curable but Executive does not cure such conduct or act within the specifiedtime period, Executive’s employment will terminate on the date immediately following the endof the cure period. Notwithstanding the foregoing, a determination of Cause shall only bemade in good faith by the Board, and after a Change-of-Control, by the Board of Directors ofthe 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 andprovide rebuttal to such proposed termination, and (iii) written notice following suchappearance confirming such termination and certifying that the decision to terminateExecutive for Cause was approved in good faith by at least sixty-six percent (66%) of themembers of such board, excluding Executive. Unless otherwise directed by Orion, from andafter the date of the written notice of proposed termination, Executive shall be relieved ofhis or her duties and responsibilities and shall be considered to be on a paid leave ofabsence pending any final action by the Board or the Board of Directors of the Successorconfirming such proposed termination.     (d) Executive may terminate his or her employment for or without Good Reason byproviding written notice of termination to Orion that indicates in reasonable detail thefacts and circumstances alleged to provide a basis for such termination. If Executive isalleging a termination for Good Reason, Executive must provide written notice to Orion ofthe existence of the condition constituting Good Reason within ninety (90) days of theinitial 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 notcured by Orion within such thirty-day period, Executive’s termination of employment from theCompany 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 thisAgreement, Executive shall be entitled to the Accrued Benefits, and to the severancebenefits described in subsection (c), in either of the following circumstances while thisAgreement is in effect:     (i) Executive’s employment is terminated by Orion without Cause, except in thecase of death or Disability; or     (ii) Executive terminates his or her employment with the Company for GoodReason.If Executive dies after receiving a notice by Orion that Executive is being terminatedwithout Cause, or after providing notice of termination for Good Reason, the Executive’sestate, heirs and beneficiaries shall be entitled to the Accrued Benefits and the severancebenefits described in subsection (c) at the same time such amounts would have been paid orbenefits provided to Executive had he or she lived.     (b) **General Release Requirement.**As an additional prerequisite for receipt of theseverance 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 imposedby 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 dateon which the General Release is no longer revocable, or if later, the date on whichthe amount payable under Section 6 is determined, but in no event may be payment bemade more than 21/2 months after the year in which Executive’s Separation from Serviceoccurs;     (ii) At the same time that the Severance Payment is made, Company shall payExecutive a lump sum amount equal to the Executive’s annual target cash bonusopportunity (if any) as established by the Board or the Compensation Committee ofthe 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 haveelapsed during the annual performance period to the date of the Executive’sSeparation from Service and the denominator of which is 365; and     (iii) Executive shall be entitled to pay premiums for COBRA continuationcoverage for the length of such coverage at the same rate as is being charged toactive employees for similar coverage.All payments shall be subject to payroll taxes and other withholdings in accordance with theCompany’s (or the applicable employer of record’s) standard payroll practices and applicablelaw.     (d) **Other Termination of Employment**. If Executive’s employment terminates for anyreason other than those described in subsection (a), the Executive (or the Executive’sestate in the event of his or her death), shall be entitled to receive only the AccruedBenefits. Executive must be terminated for Cause pursuant to and in accordance with Section4(c) of this Agreement in order for the consequences of such a Cause termination to apply toExecutive under any stock option or similar equity award agreement with the Company to whichExecutive is then a party. The Company’s obligations under this Section 5 shall survive thetermination of this Agreement.          6. **Limitations on Severance Payments and Benefits****.**Notwithstanding any otherprovision of this Agreement, if any portion of the Severance Payment or any other payment underthis Agreement, or under any other agreement with or plan of the Company (in the aggregate “TotalPayments”), would constitute an “excess parachute payment,” then the Total Payments to be made toExecutive shall be reduced such that the value of the aggregate Total Payments that Executive isentitled to receive shall be One Dollar ($1) less than the maximum amount which Executive mayreceive without becoming subject to the tax imposed by Code Section 4999 or which the Company maypay without loss of deduction under Code Section 280G(a); *provided*that the foregoing reduction inthe amount of Total Payments shall not apply if the After-Tax Value to Executive of the TotalPayments prior to reduction in accordance herewith is greater than the After-Tax Value to Executiveif 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 inCode Section 280G, and such “parachute payments” shall be valued as provided therein. Presentvalue for purposes of this Agreement shall be calculated in accordance with Code Section1274(b)(2). Within twenty (20) business days following delivery of the notice of termination ornotice by Orion to Executive of its belief that there is a payment or benefit due Executive thatwill result in an excess parachute payment as defined in Code Section 280G, Executive and Orion, atOrion’s
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expense, shall obtain the opinion (which need not be unqualified) of nationally recognized taxcounsel selected by Orion’s independent auditors and acceptable to Executive in Executive’s solediscretion, which opinion sets forth: (A) the amount of the Base Period Income, (B) the amount andpresent value of Total Payments, (C) the amount and present value of any excess parachute paymentswithout regard to the limitations of this Section 6, (D) the After-Tax Value of the Total Paymentsif the reduction in Total Payments contemplated under this Section 6 did not apply, and (E) theAfter-Tax Value of the Total Payments taking into account the reduction in Total Paymentscontemplated under this Section 6. As used in this Section 6, the term “Base Period Income” meansan amount equal to Executive’s “annualized includible compensation for the base period” as definedin Code Section 280G(d)(1). For purposes of such opinion, the value of any noncash benefits or anydeferred payment or benefit shall be determined by Orion’s independent auditors in accordance withthe principles of Code Sections 280G(d)(3) and (4), which determination shall be evidenced in acertificate of such auditors addressed to Orion and Executive. For purposes of determining theAfter-Tax Value of Total Payments, Executive shall be deemed to pay federal income taxes andemployment taxes at the highest marginal rate of federal income and employment taxation in thecalendar year in which the Termination Payment is to be made and state and local income taxes atthe highest marginal rates of taxation in the state and locality of Executive’s domicile for incometax purposes on the date the Termination Payment is to be made, net of the maximum reduction infederal income taxes that may be obtained from deduction of such state and local taxes. Suchopinion shall be dated as of the Termination Date and addressed to Orion and Executive and shall bebinding upon the Company and Executive. If such opinion determines that there would be an excessparachute payment and that the After-Tax Value of the Total Payments taking into account thereduction contemplated under this Section is greater than the After-Tax Value of the Total Paymentsif the reduction in Total Payments contemplated under this Section did not apply, then theTermination Payment hereunder or any other payment determined by such counsel to be includible inTotal Payments shall be reduced or eliminated as specified by Executive in writing delivered toOrion within five business days of Executive’s receipt of such opinion or, if Executive fails to sonotify Orion, then as Orion shall reasonably determine, so that under the bases of calculations setforth in such opinion there will be no excess parachute payment. If such legal counsel so requestsin connection with the opinion required by this Section, Executive and Orion shall obtain, atOrion’s expense, and the legal counsel may rely on in providing the opinion, the advice of a firmof recognized executive compensation consultants as to the reasonableness of any item ofcompensation to be received by Executive. Notwithstanding the foregoing, the provisions of thisSection 6, including the calculations, notices and opinions provided for herein, shall be basedupon the conclusive presumption that the following are reasonable: (1) the compensation andbenefits provided for in Section 3 and (2) any other compensation, including but not limited to theAccrued Benefits, earned prior to the date of Executive’s Separation from Service by the Executivepursuant to the Company’s compensation programs if such payments would have been made in the futurein any event, even though the timing of such payment is triggered by the Change in Control or theExecutive’s Separation from Service. If the provisions of Code Sections 280G and 4999 are repealedwithout succession, then this Section 6 shall be of no further force or effect.          7. **Covenants by Executive****.**     (a) **Confidentiality and Non-Disclosure**. During Executive’s employment with the Companyand for a period of two years following Executive’s Separation from Service, he or sheagrees 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
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himself or herself or any other person any confidential or proprietary information ordata of the Company including, but not limited to, trade secrets, customer and supplierlists, pricing policies, operational methods, marketing plans or strategies, productdevelopment techniques or plans, business acquisition or disposition plans, new personnelemployment plans, methods of manufacture, technical process, and formulae, designs anddesign 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 knownto 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 agencyor by any administrative, legislative or regulatory body; *provided*that in this instanceExecutive shall make reasonable efforts to inform the Company of any such request prior toany disclosure so as to permit the Company a meaningful opportunity to seek a protectiveorder or similar adjudication. Upon termination of his or her employment with the Company,Executive will immediately return to the Company all written or electronically storedconfidential 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 twoyears following Executive’s Separation from Service, Executive agrees not todirectly or indirectly engage, or assist any business or entity, in CompetitiveBusiness Activity in any capacity, including without limitation as an employee,officer, or director of, or consultant or advisor to, any person or entity engageddirectly 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 timeof 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 twoyears following Executive’s Separation from Service, Executive agrees not to, in anyform or manner, directly or indirectly, on his or her own behalf or in combinationwith others (1) solicit, induce or influence any customer, supplier, lender, lessoror any other person with a business relationship with the Company to discontinue orreduce the extent of such business relationship, or (2) recruit, solicit orotherwise induce or influence any employee of the Company to discontinue theiremployment 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’sexclusive property, all inventions and technical or business innovations, includingbut not limited to all patentable and copyrightable subject matter (collectively,the “Innovations”) developed, authored or conceived by Executive solely or jointlywith others during the period of Executive’s employment, including duringExecutive’s employment prior to the date of this Agreement, (1) that are along thelines of the business, work or investigations of the Company to which Executive’semployment relates or as to which Executive may receive information due toExecutive’s employment with the Company, or
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(2) that result from or are suggested by any work which Executive may do forthe 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.”     (ii) Executive agrees to execute all necessary papers and otherwise provideproper assistance (at the Company’s expense), during and subsequent to Executive’semployment, to enable the Company to obtain for itself or its nominees, all right,title, and interest in and to patents, copyrights, trademarks or other legalprotection for such Innovations in any and all countries.     (iii) Executive agrees to make and maintain for the Company adequate andcurrent written records of all such Innovations;     (iv) Upon any termination of Executive’s employment, employee agrees to deliverto the Company promptly all items which belong to the Company or which by theirnature are for the use of Company employees only, including, without limitation, allwritten and other materials which are of a secret or confidential nature relating tothe business of the Company.     (v) In the event Company is unable for any reason whatsoever to secureExecutive’s signature to any lawful and necessary documents required, includingthose necessary for the assignment of, application for, or prosecution of any UnitedStates or foreign application for letters patent or copyright for any Innovation,Executive hereby irrevocably designates and appoints Company and its duly authorizedofficers and agents as Executive’s agent and attorney-in-fact, to act for and inExecutive’s behalf and stead to execute and file any such applications and to do allother lawfully permitted acts to further the assignment, prosecution, and issuanceof letters patent or registration of copyright thereon with the same legal force andeffect as if executed by Executive. Executive hereby waives and quitclaims toCompany any and all claims, of any nature whatsoever, which Executive may now haveor may hereafter have for infringement of any patent or copyright resulting from anysuch application.     (d) **Remedies Not Exclusive**. In the event that Executive breaches any terms of thisSection 7, Executive acknowledges and agrees that said breach may result in the immediateand 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, uponExecutive’s breach of this Section 7, shall therefore be entitled (in addition to andwithout limiting any other remedies that the Company may seek under this Agreement orotherwise at law or in equity) to (1) seek from any court of competent jurisdictionequitable relief by way of temporary or permanent injunction and without being required topost a bond, to restrain any violation of this Section 7, and for such further relief as thecourt may deem just or proper in law or equity, and (2) in the event that the Company shallprevail, its reasonable attorneys fees and costs and other expenses in enforcing its rightsunder this Section 7.     (e) **Severability of Provisions**. If any restriction, limitation, or provision of thisSection 7 is deemed to be unreasonable, onerous, or unduly restrictive by a court ofcompetent jurisdiction, it shall not be stricken in its entirety and held totally void and
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unenforceable, but shall remain effective to the maximum extent possible within thebounds of the law. If any phrase, clause or provision of this Section 7 is declared invalidor unenforceable by a court of competent jurisdiction, such phrase, clause, or provisionshall be deemed severed from this Section 7, but will not affect any other provision of thisSection 7, which shall otherwise remain in full force and effect. The provisions of thisSection 7 are each declared to be separate and distinct covenants by Executive.          8. **Notice**. Any notice, request, demand or other communication required or permittedherein will be deemed to be properly given when personally served in writing or when deposited inthe United States mail, postage prepaid, addressed to Executive at the address appearing at the endof this Agreement and to the Company with attention to the Chief Executive Officer of Orion and theGeneral Counsel of Orion. Either party may change its address by written notice in accordance withthis paragraph.          9. **Set Off; Mitigation**. The Company’s obligation to pay Executive the amounts and toprovide the benefits hereunder shall be subject to set-off, counterclaim or recoupment of amountsowed by Executive to the Company. However, Executive shall not be required to mitigate the amountof 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 bindingupon the parties hereto and their respective executors, administrators, successors and assigns. IfOrion experiences a Change of Control, or otherwise sells, assigns or transfers all orsubstantially all of its business and assets to any person or if Orion merges into or consolidatesor otherwise combines (where Orion does not survive such combination) with any person (any suchevent, a “Sale of Business”), then Orion shall assign all of its right, title and interest in thisAgreement as of the date of such event to such person, and Orion shall cause such person, bywritten agreement in form and substance reasonably satisfactory to Executive, to expressly assumeand agree to perform from and after the date of such assignment all of the terms, conditions andprovisions imposed by this Agreement upon the Company. Failure of Orion to obtain such agreementprior to the effective date of such Sale of Business shall be a breach of this Agreementconstituting “Good Reason” hereunder, except that for purposes of implementing the foregoing thedate upon which such Sale of Business becomes effective shall be the Termination Date. In case ofsuch 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 inthis Section 10 or which otherwise becomes bound by all the terms and provisions of this Agreementby operation of law, and this Agreement shall inure to the benefit of, and be enforceable by, suchperson. Executive shall, in his or her discretion, be entitled to proceed against any or all ofsuch 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 thevoluntary or involuntary dissolution of Orion.          11. **Arbitration**. Any controversy or claim arising out of or relating to thisAgreement or the breach of this Agreement that cannot be mutually resolved by the Executive and theCompany, 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. Thedetermination of the arbitrator shall be conclusive and binding on the
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Company and the Executive, and judgment may be entered on the arbitrator’s award in any courthaving jurisdiction.          12. **Applicable Law and Jurisdiction**. This Agreement is to be governed by andconstrued under the laws of the United States and of the State of Wisconsin without resort toWisconsin’s choice of law rules. Each party hereby agrees that the forum and venue for any legalor equitable action or proceeding arising out of, or in connection with, this Agreement will lie inthe appropriate federal or state courts in the State of Wisconsin and specifically waives any andall objections to such jurisdiction and venue.          13. **Captions and Paragraph Headings**. Captions and paragraph headings used herein arefor 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 thisAgreement for any reason be declared invalid, void, or unenforceable by a court of competentjurisdiction, the validity and binding effect of any remaining portion will not be affected, andthe remaining portions of this Agreement will remain in full force and effect as if this Agreementhad been executed with said provision eliminated.          15. **No Waiver**. The failure of a party to insist upon strict adherence to any term ofthis Agreement on any occasion shall not be considered a waiver of such party’s rights or deprivesuch party of the right thereafter to insist upon strict adherence to that term or any other termof this Agreement.          16. **Entire Agreement**. This Agreement contains the entire agreement of the partieswith respect to the subject matter of this Agreement except where other agreements are specificallynoted, adopted, or incorporated by reference. This Agreement otherwise supersedes any and allother agreements (including with respect to the definition of Cause and the process for Causetermination, any stock option or similar equity awards agreements with the Company to whichExecutive may now or hereafter be a party), either oral or in writing, between the parties heretowith respect to the employment of Executive by Company, and all such agreements shall be void andof 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 behalfof any party, which are not embodied herein, and that no other agreement, statement, or promise notcontained 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.          18. **Counterparts**. This Agreement may be signed in counterparts, each of which shallbe an original, with the same effect as if the signatures thereto and hereto were upon the sameinstrument.
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          **WHEREAS**, this Agreement is effective as of the effective date hereof first set forth above.**EXECUTIVE**   /s/ Daniel J. Waibel     Signature     Name: Daniel J. Waibel     Date: August 12, 2008       **ORION ENERGY SYSTEMS, INC.**       By: /s/ Neal R. Verfuerth            Name: Neal R. Verfuerth       Title: President and CEO  
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