Document:

EX-10.2

 

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”).

 

 

           (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

10EX-10.3

 

Exhibit 10.3

AMENDMENT NO. 1

TO

EMPLOYMENT AND NON-COMPETITION AGREEMENT

     THIS AMENDMENT NO. 1 TO EMPLOYMENT AND NON-COMPETITION AGREEMENT (this “Amendment”) is made
and entered into as of December 10, 2007, by and between POWERSECURE INTERNATIONAL, INC., a
Delaware corporation (the “Company”), and Gary J. Zuiderveen (“Officer”).

Recitals

     WHEREAS, the Company and Officer have previously entered into that certain Employment and
Non-Competition Agreement, dated as of April 16, 2007 (as the same may hereafter be amended or
otherwise modified from time to time, the “Employment Agreement”); and

     WHEREAS, the offices and duties of Officer have changed; and

     WHEREAS, the Company and Officer now desire to amend the Employment Agreement in order to
modify the compensation of Officer, upon the terms and subject to the conditions set forth herein;

Agreement

     NOW, THEREFORE, in consideration of the premises and 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:

     Section 1. Amendments to Employment Agreement. Effective as of the date hereof, the
Employment Agreement shall be amended as provided in this Section 1.

          (a) Amendment to Section 2: “Term”. Section 2 of the Employment Agreement is hereby
amended to replace the phrase “December 31, 2009” in the first sentence in reference to the
expiration of Employee’s employment under the Employment Agreement with the phrase “December 10,
2012.”

          (b) Amendment to Section 3(a): “Duties of Employee”. Section 3(a) of the Employment
Agreement is hereby amended to read in its entirety as follows:

“(a) General Duties and Responsibilities. During and throughout the
Employment Term, Employee shall faithfully and diligently, to the best of his
ability, serve as the Vice President of Financial Reporting, Principal Accounting
Officer and Controller of the Company, and in such additional management offices and
capacities and with such additional titles and duties as shall be designated by the
Company’s Board of Directors (the “Board”) during the Employment Term, shall have
the authority and perform the duties and responsibilities customary for such

 

 

offices, and shall have such other duties as may be assigned to him from time to
time by the Board, by the Chief Executive Officer of the Company (the “CEO”) or by
the Chief Financial Officer of the Company (the “CFO”). Employee shall perform his
duties hereunder in accordance with the policies from time to time established and
amended by the Company and in accordance with all applicable laws and regulations.
Employee shall use his best efforts to promote the best interests of the Company.
Employee shall always be subject to the direction, approval and control of the
Board, the CEO and the CFO in the performance of his duties. Employee acknowledges
and agrees that he may be required by the Company, without additional compensation,
to perform services for any other entity controlling, controlled by, under common
control with or otherwise affiliated with, the Company (any such entity hereinafter
referred to as an “Affiliate”), and to accept such office or position with any
Affiliate as the Board may reasonably require, including but not limited to service
as an officer and/or director of an Affiliate.”

          (c) Amendment to Section 4(a): “Compensation — Base Salary”. Section 4(a) of the
Employment Agreement is hereby amended to replace the amount “$175,000” in the first sentence in
reference to Employee’s Base Salary under the Employment Agreement with the amount “$195,000.”

          (d) Amendment to Section 4(b): “Compensation — Bonuses”. Section 4(b) of the
Employment Agreement is hereby amended to read in its entirety as follows:

“(b) Bonuses. So long as he remains employed with the Company, Officer
shall be entitled to receive the following bonuses:

     (i) Annual Performance Bonus. Officer shall be eligible to receive a
bonus in a target amount of 25% of his Base Salary, as from time to time in effect,
for excellent service to the Company, based upon the achievement of such performance
goals as shall be established annually by the Compensation Committee of the Board
based in part upon the recommendation of the CEO.

     (ii) General Bonus Program. Officer’s eligibility to participate in
any other bonus program or any other form of profit-sharing participation for senior
executive officers of the Company not expressly provided for in this Agreement shall
be in the sole discretion of the Board or the Compensation Committee.”

          (e) Amendment to Section 5(c): “Termination of Employment — By the Company for Cause”.
Section (c) of the Employment Agreement is hereby amended to add the following sentence at the end
thereof:

“Notwithstanding any other provision of this Section 5(c) to the contrary, for
purposes of this Agreement “Cause” does not mean or include a bona fide dispute over
accounting principles or policy that does not involve fraud, other intentional
misconduct, or a material violation of any law, rule or regulation applicable to the
Company or Officer.”

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          (f) Amendment to Section 5(f)(i)(C): “Termination of Employment: Change in Control”.
Section 5(f)(i)(C) of the Employment Agreement is hereby amended to replace the phrase “12 months”
in the first sentence in reference to Officer’s continued participation in insurance plans of the
Company under the specified circumstance with the phrase “two (2) years.”

          (g) Amendment to Section 5(j): “Termination of Employment — Computation and Payment of
Severance Amount”. Section 5(j) of the Employment Agreement is hereby amended to (i) replace
the phrase “one (1) times” in the first sentence in reference to the computation of the Severance
Amount with the phrase “two (2) times”, and (ii) replace the phrase “12 months” in the last
sentence in reference to the payment of the Severance Amount with the phrase “two (2) years.”

          (h) Amendment to Section 6(a): “Covenants: Covenant Not to Compete”. Section 6(a) of
the Employment Agreement is hereby amended to replace the phrase “12 months” in the first sentence
in reference to Officer’s post-employment Restricted Period with the phrase “two (2) years.”

     Section 2. Effect of Amendment. Except as and to the extent expressly modified by
this Amendment, the Employment Agreement shall remain in full force and effect in all respects in
accordance with its terms, and any reference to the Employment Agreement from and after the date
hereof shall be deemed to be a reference to the Employment Agreement as modified by this Amendment.

     Section 3. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Delaware.

     Section 4. Counterparts. This Amendment may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which taken together shall constitute
one and the same instrument.

[Remainder of Page Intentionally Left Blank—Next Page is the Signature Page]

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     IN WITNESS WHEREOF, this Amendment No. 1 to Employment and Non-Competition Agreement has been
duly executed and delivered by or on behalf of the undersigned as of the date first written above.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	POWERSECURE INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Sidney Hinton 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Sidney Hinton, President and

Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	Attest:	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Basil M. Briggs	 	 
	 	 	 	 	 
	 	 	Basil M. Briggs,
Chairman, Compensation

          Committee of the Board of Directors	 	 
	 
	 	 	 	 	 	 
	 	 	OFFICER:	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Gary J. Zuiderveen	 	 
	 	 	 	 	 
	 	 	Gary J. Zuiderveen, Individually	 	 

4

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